Daily PACS Jan. 5, 2012
Author’s additional notes:
The market opened stronger yesterday and went up by 65.55 or +1.44 percent. All sectors now are almost trending up except for mining which needs to close higher than 24,739 or have to gain 259 points in order to join the other sectors. If it does then we can probably assume that the index is in a mini bull run as long as all sectors’ continue to trend higher.
Of course, let us not forget that the problem in EUROPE is still there and that the world market is just trying to ignore them for now. How long this will last? I don’t know. In fact, today the Euro currency is seen trading lower than 1.30 level. Note that every time EURO currency trades lower than 1.30, it means that there are EURO problems that investors are worrying about. It can probably be the news about “Greece warns on Euro Exit” reported by BBC or because of Spain’s Expansion newspaper “reported that Spain is seeking IMF and EFSF loans to help them recap their banks. Spanish bonds are trading lower on the story even though it was denied by the Spanish government,” as written in marketwatch.com. Whatever it is, I wouldn’t worry about it at the moment. I’ll start worrying when our local market’s upward trend starts to falter.
Over on stock issues we cover on PACS, the following stocks just started to trend up. They are RLC, EDC, SMC and FLI. BEL’s trend turned south which worries me a lot given that the general market is strong and yet, it is trading and trending lower.
Overall, I advise everyone to remain cautiously optimistic for the trading days to come and watch correction for an opportunity to buy for as long as the general trend of the market continues to be up.
*Please note that PACS’ price alert level will always supersede any opinion coming from the author.*
LC Chart Jan. 05, 2012
I’ve been hearing and reading a lot of opinion regarding LC/b’s price movement. Since this stock issue has become one of the market’s favorite, I thought of sharing and giving my views as well. So far almost all analysis I’ve had read are right. Everything just depends on the time horizon one is looking at.
Scenario A: Uptrending Triangle Formation
Bull Camp is saying that LC is in Uptrend Channel and that we will soon see a break above 1.81 and that price will initially be targeting levels between 2.18 to 2.26. Time frame of wait will be shorter.
Note that under this theory, LC is still expected to retrace back to “Minor Descending Triangle” previous breakout point level seen at 1.57. Normally healthy retracement doesn’t lead to touching 1.57 but instead price is seen to hover above it before resuming an upward movement.
Scenario B: Ascending Triangle Formation
Bear Camp on the other hand is saying that LC is completing an Ascending Triangle formation and that price is seen to break below 1.58-1.54 (Point A) and move lower, towards the lower boundary of the pattern which is between 1.40-1.40 levels. Once pattern is completed, LC is seen to resume its uptrend move and will initially retest 1.74 resistance level. It probably will then eventually break above the 1.81 upper boundary of the ascending triangle formation in due time but this will really take a longer time to complete.
Personally am neither pro-bear nor pro-bull. I am pro PRICE ACTION. The deciding factor will be the 1.58-1.54 support line. THIS WILL BE THE FINAL ARBITER POINT WHICH WILL DECIDE WHO IS RIGHT OR WRONG. As long as price moves above this level, the 2.18 to 2.26 short term target will remain viable. On the other hand, if 1.58-1.54 level breakdown, then my holding time analysis target will change from shorter to much longer wait period with possible testing of support seen between 1.44-1.40 levels.
ALL BETS ARE OFF IF 1.38 LEVEL BREAKS.
Layman’s Definition:
Retrace/Retracement means pull back.
Resistance means a level or a price point where majority of sellers are seen to converge.
Support means a level or a price point where majority of buyers are seen to converge.
Breakout/Break above means a price move above a resistance.
Breakdown means a price move below support.
Bullish/Bull means to have an optimistic, positive view on price action. (Anticipating further rise)
Bearish/Bear means to have a pessimistic, negative view on price action. (Anticipating further decline)
Daily PACS Jan. 3, 2012
Author’s additional notes:
Market was up 25 points yesterday but volume remained tepid. Most of the Asian market was closed and so is the Dow. I guess foreign investors and locals were still in holiday mode and that is why the volume remained low. Hopefully today we may see some improvement in volume as our Asian neighbors resume their trading.
Over on PACS, market has resumed trending up again although property and mining sectors still remain down. Between the two sectors that are still down, property sector showed more strength than mining. In fact just like the Phisix yesterday, the property sector just needs a one (1) point gain in order to turn its trend from down to up again. We may also see mining sector catch up soon. LC’s trend which weighs heavily in the mining sector has started to trend up. Others that started to trend up as well are MER, SMPH and TA. If FLI can close above 1.02, its trend will also turn around from down to up.
*Please note that PACS’ price alert level will always supersede any opinion coming from the author.*
Daily PACS Jan. 2, 2012
Author’s additional notes:
Happy New Year everyone! I hope you all enjoyed your holidays. Well it’s 2012 and it’s the start of the new trading year, let’s now go back and focus our attention to the market.
Let me do a little recap. On my previous newsletter, I mentioned that all sector’s trend/sentiments are pointing to the upside. Apparently after Christmas, the Phisix experienced some profit taking which changed the overall picture of the market. We now have a mixed market wherein some sectors like property and mining are reflecting weakness. Although the overall biased of the index remains to the downside as the trend remains down, the good news is that the market is just 1 point away from trending up again in the short term.
Looking at the medium term, I must say it will not be an easy market for all of us as EURO concerns will continue to weigh into the market. Checkout the “EURO Crisis (dates to watch closely)” that I have republished courtesy of DC Tripwire. Each date will bring extra-volatility to our local market and its outcome will dictate if I am right to assume that we have seen the the peak of European crisis which I wrote on my newsletter last December 21, 2011 (click here). They are like time-bombs that we have to watch closely.
Today, I expect the market to move in tight range as majority of investors are still in holiday mode and will also be watching for developments in Europe.
For stocks to buy and sell….see my new “Trade Ideas” section that I have put up as part of format changes I previously mentioned.
*Please note that PACS’ price alert level will always supersede any opinion coming from the author.*
Daily PACS Dec. 22, 2011
Author’s additional notes:
In line with our expectations, we saw the Dow traded higher last night and up by 62 points. Today, we will see if Dow’s bullish sentiment will translate into local gains. With the Phisix trend’s still up and well supported by different sectors except mining, our bias will remain in the bull’s side.
Among the stock that I previously mentioned to monitor, SCC has joined the others in posting gains yesterday. PACS also reflected change of trend on ICT which just started to trend upward. I hope PACS followers were able sell WIN and PHES during the surge in momentum yesterday. As I have stated, they are only good for short term trades. Lastly, note that PACS has stopped out our buying order for LR. It started to trend downward yesterday. LR will be out of the list of stocks we will monitor until upward trend resumes and PACS gives a bullish signal again.
My next update on PACS will most likely be next before the start of the trading day but I’ll try my best to squeeze it on my schedule if I will have the time. I have also started to make some format changes on our PACS and I plan to add some section to further help readers to take full advantage of the market. Hopefully I can execute all of them before the start of next year.
I wish you all a very Merry Christmas and a Happy New Year! On this season, remember to focus on your love ones and thank God for the blessings that we have received this year. Hopefully, He continues to shower us with more blessings for the year to come. Enjoy!
– Alpha –
*For new readers check out “How to use” PACS page found at the sidebar or click this message.
*Please note that PACS’ price alert level will always supersede any opinion coming from the author.
*Try not to chase stock and always try to buy or sell near PACS given level.
Daily PACS Dec. 22, 2011
DOW closed marginally higher which is 4 points higher from its previous closing. Not much but if we look at how it performed during the whole session, one can say that momentum is still relatively strong. It started to trade in the morning on weaker tone but in the second half of trading, it trended higher. That price action to me is a vote of confidence. It’s probably a sign that the worry over Europe is starting to decrease or at least for now is being set aside. (For further explanation…check out what I have written yesterday.)
Below is the intraday trading chart of the Dow:
Yesterday, I also wrote a couple of stocks to monitor. They are: WIN up by 26%, PHES +12%, BEL +5.96%, MEG +2.96%, PCOR +1.41%, LR+.82% and MIC +1.79%. Only three were in the red, namely: AAA, FAF and PXP while SCC closed at the same price. Not bad since majority of the stocks I just mentioned yesterday, right away turned into winners. Note that WIN and PHES were intended for short term plays and so start to look for sell window starting today. Also continue to look for possible entry level for stocks like BEL, LR and MEG especially if they pullback.
Here is what I wrote:
On today’s PACS, sentiments continue to improve. Property sector has joined the party and now is trending up along with banking sector and the general market, the Phisix. The only sector that is still down on our PACS is the mining sector. As such, our biased for today will remain bullish and we will continue to look for buying opportunities.
I also like to bring your attention on how effective PACS is. Remember yesterday that PACS signaled a trend reversal on Property sector wherein I wrote that the trend has changed from down to up thus a bullish reversal. Guess what is the title of today’s article on Business World? (the article was written after trading whereas PACS already gave a signal a day before trading begun…)
Check below:
Author’s additional notes:
*For new readers check out “How to use” PACS page found at the sidebar or click this message.
*Please note that PACS’ price alert level will always supersede any opinion coming from the author.
*Try not to chase stock and always try to buy or sell near PACS given level.
Daily PACS Dec. 21, 2011
Author’s additional notes:
Today I got some good news to share to you readers..I think we may have seen the peak of European crisis. Am not saying this just because Dow was up by 339 points last night but one good sign made me think and reevaluate my position over on EU sovereign debt problem.
Here it is:
I am a firm believer that bonds project a better forecast of what lies ahead compared to currencies and equities. Last night, the yield of 10 year note Spanish bond fell to 5.07% (bullish sign) which moved further away from the dreaded 7% threshold that troubled EU nation are avoiding. Not only that the yields fell, the targeted amount offer was above from what was originally targeted.
Remember that with regards to EU problem, we are not looking for a solution but rather a stability of the financial system. Investor are more interested in knowing whether liquidity (money supply) will dry up or not. Well the success of Spanish auction somewhat gave us an assurance that the pipe is not yet broken and that money is still flowing. That to me is the initial step in bringing back confidence to the market.
Note that when US had a financial crisis back in ’08-’09, the market started to rally not because the housing problem was solved but because of the steps that FED had done to ensure the money will still flow into the financial system. US still facing the same problem now and yet DOW Jones is at better level compared to the first it appeared back then.
Another EU data is also set to be release tomorrow. This is the statistics about a new, 3-year bank funding operation (LTRO) of the ECB (European Central Bank) which is meant to ease liquidity for the banks. In a way, it is like a bailout type program intended to flood banks with more money. Their hope is that the money they pump in will somehow find its way to buy sovereign bonds. I just think that eventually money will spillover to help fund government that are in dire need of money. More money into the system to me means more investor confidence.
This is why I am starting to think that the peak of EU crises may have already passed. Some will argue, how about the credit rating agency downgrade threat? Look back and review how the market reacted to each downgrade made. This may cause some hiccups but investors tend to look at this as a buying opportunity. Why? Most of the time before a downgrade is issued, the price have already factored in its effect already. It’s probably because credit agencies are always late in issuing report. I may be wrong but try to review how the market reacted when US lost its triple A rating in order to have an idea of what I am saying.
Over on PACS, we now have a mixed picture of the market. Property sector’s trend have turned up and became bullish. Market sentiments have somehow improved. I have also include PCOR, FLI, FAF, WIN and PHES into our list because I feel that they are starting to become active along with SCC, MEG, CYBR, MIC, AAA, PXP, LR, and BEL which are already in the list. I will monitor them closely in the coming days…starting today.
I am not saying to go out there and become reckless in buying stocks. Of course our stock purchase should still be bounded by the signals that PACS is giving. A prudent way to test the idea I presented is to do a test buy. That is the only way we may know if we are right or wrong. If we are right, price will continue to go up and then we can increase our exposure by adding into our position. If we are wrong..PACS will signal a trend change from bull to bear which will automatically take us out of the trade.
*For new readers check out “How to use” PACS page found at the sidebar or click this message.
*Please note that PACS’ price alert level will always supersede any opinion coming from the author.
*Try not to chase stock and always try to buy or sell near PACS given level.
Trading Education: Question regarding AAA trade – Dec. 21, 2011
sorry for the late reply….good question.
i failed to elaborate further on this. i forgot to point out regarding gap open which i was anticipating.
apparently i gave the first resistance at 3.57. i was thinking that if AAA opens higher and first resistance breaks,there is a chance that 3.68 will be tested. of course, there will are traders who will try to buy at the at the gap open.
the line that states “to cut if 3.68 don’t break” are addressed to those who are aggressive in buying and might have bought higher at the open. to be specific, these are buyers who bought at the break above 3.57. remember yun mga bumili ang iniisip eh ma-break ang 3.68 resistance. yun ang expectation nila nun bumili sila.
what happened was that this expectation didn’t materialize and therefore because the plan did not go as intended…the right thing to do is to get out of the position. lets not forget, when we trade…we always have to have a plan. the plan are your basis whether ang ginagawa mo ay tama or mali. kapag ang plano di natutupad alinsunod sa inaasahan then masasabi natin na mali na ang trade.
it doesn’t mean that once you exited trade eh wag ng balikan. pwedeng bumalik but we have to re-evaluate and come up with a new plan again. that plan will again serve as your basis if tama or mali again ang ginagawa.
how do we know that the plan didn’t materialize?
1) very obvious price didn’t go above 3.68
2) remember resistance becomes support and vice versa. after breaking resistance at 3.57, it automatically became a support. ang expectation was for 3.57 to hold after breaking kase it now became a support. if 3.57 holds then meron pang chance that 3.68 may be retested again and probably be broken. ang kaso, it didn’t. when the price pulled back, it went straight below it and therefore became a resistance. ngayon instead of one, naging dalawa na resistance…3.57 and 3.68. mas mahirap na sila ma-break.
*always remember that aggressive buying will always require aggressive cut loss mechanism. that is the only way we can insure that we don’t get burn on our trades.
on the other line which states sell if “3.32-3.30 breaks”…they are meant for those who will buy at the bounce from the support which are from 3.35-3.37.
why cut at 3.32-3.30 not immediately below 3.35 (the support)? the logic behind it is that…we want to give some room for the price to maneuver. kung baga, we are giving our trade the chance to prove its worthiness. like a parent, mahirap masyadong stricto sa anak natin. dapat bigyan din natin sila ng room to grow but at the same time we can’t also be too lenient at baka tayo sawayin naman.
*conservative buying must be given some room to wiggle in order to let it grow and develop but never get to lenient that it will hurt our capital.
there are smc backdoor rumors that are circulating around on this stock but i don’t want to go into that zone. once we start to dip our hands and trade on rumors, am afraid we can never go back to a safer way of trading which is following a method that works.
we can get lucky once or twice but when you get hit….it really hits hard that it tends to wipe out all the hardship and effort one have put into trading. there are those who can’t get back anymore because they loss a lot of capital. if you don’t believe me, ask those who traded BHI and IP at the top based on rumors and are now stuck. you will know what i mean. 
REMEMBER A TRADER CAN BE WRONG 80% OF THE TIME BUT CAN STILL MANAGE TO HAVE 50% OVERALL GAIN.
HOW? by minimizing the losses on 80% losing trade and maximizing profit on the 20% winning trades.
THIS IS THE HOLY GRAIL OF TRADING…its all about money management and the system/method that one employs. 
Daily PACS Dec. 20, 2011
Author’s additional notes:
The general market’s trend turned up yesterday. Although it is up, other sectors like banks, property and mining continue to weigh on the market and are still down. Note that TEL has a big influence on the composition of the index. It is safe to conclude that the gains that we experience yesterday can mostly be attributed to TEL which was also up and not the broader market.
As a trader, we can’t afford to have so much biased and so we will continue to give the market a chance to prove itself further by waiting if other sectors mentioned above will follow and will also turn bullish. If that happens then we can slowly increase our exposure by increasing the amount of money we invest in the market. But for now, we will remain cautious and be vigilant in watching our sell points closely.
For trade ideas today, watch AAA. The following are its resistances for today only…they are 3.57, 3.68 followed by 3.85. Hold if 3.85 break above but keep a stop loss just underneath it just to play safe. Once 3.85 breaks, the next resistances to watch are 4.23 followed by 4.48.
Initial support can be seen at 3.37-3.35. Cut if after buying, 3.32-3.30 breaks or 3.68 fails to break.
Remember to buy not going down but on the way up at the bounce near support or at the break of resistance. Also note that once resistance is broken, it automatically becomes support (Normally just below the resistance turned support is where a trader will usually place a trailing stops to protect profits once they appear).
*For new readers check out “How to use” PACS page found at the sidebar or click this message.
*Please note that PACS’ price alert level will always supersede any opinion coming from the author.
*Try not to chase stock and always try to buy or sell near PACS given level.
Daily PACS Dec. 19, 2011
Author’s additional notes:
With the bearish effect of Europe continues to overshadow the market, I took time out from trading last week. I just felt that the risk outweighs the reward and that even if am away I won’t miss a lot.
Today, I notice that the general trend is still down including all sectors. However, sentiments seems to have improved. Majority of the blue chips’ trend have started to trend upward. I guess we can attribute this to the positive news regarding S&P’s Philippine credit rating upgrade from stable to positive.
The question now is…will blue chips’ uptrend continue to become sustainable or short-lived? I really don’t know but I do believe that Europe’s crisis will continue to haunt the market from time and again until we see a more positive resolution of the problem. As such, I remain cautious and have reduced the amount I trade in the market. I just think that this is not the right environment to be long in the market. In the meantime, I advise everyone to take trading one day at a time and to follow PACS signal especially when signal given is to sell.
Lastly before the year-end, I’ll be posting my thoughts for 2012 trading. I’ll also be discussing my strategy early next year and the stocks I am looking forward to invest.
*For new readers check out “How to use” PACS page found at the sidebar or click this message.
*Please note that PACS’ price alert level will always supersede any opinion coming from the author.
*Try not to chase stock and always try to buy or sell near PACS given level.
Price Action Cheat Sheet 
