The Trend is our friend but he is a fickle friend  

Posted by Book Eater in , , , ,

PCOMP is in a short term uptrend. We finally moved with the 32 day moving average. As can be seen from the PCOMP daily chart, the volume is just okay but at least our MACD is higher than the 0 line. We are in positive territory. Also, unlike the RSI and price being divergent in the short term rally last February 2008, the price and the RSI right now have went in the same direction and is higher than 50.

Intermarkets analysis also confirm this uptrend. The US indices right now are higher than the 50day moving averages. The corrections have been healthy pullbacks and should be seen as window opportunities to enter instead of fear. Maintain your risk/account ratio of 2% and risk reward ratio greater than 3 for higher batting averages. already has it in his blog if you are lazy to look for yourself.

If you also look at commodities, they're all making a sell signal giving us a more sustainable rally this time. Try checking the charts to confirm this for yourself:)

The trend right now is with the bulls. However, he's a fickle friend. He may give a few pullbacks here and there. Just stay on top of your noses.

Here's my stock picks and pricks (those I chose which were wrong):
Stock Picks

1.) AC - Looks like a possible breakout that will test next resistance at 450

Volume - Greater than average by 100%
Price Line-Big White Candle closing near the highs of 420
MACD- made a cross signal and is above zero line
Stochastics - Made a cross signal

Preferred entries: Hope there's a chance to hop in this train at below 420 (any pullbacks) but if not, then 422.50 will be the cheapest play around here.

Target price: 450
Cutloss price: 397.50 (A break of 400).

2.) MWC - Doji pattern, above moving averages of 32,65,124. Volume is greater than average by about 30%, MACD cross buy signal, STS cross buy signal.

Entry: 17.75/18
Target price: 19/19.25
Cutloss: 17

3.) ICT - Just read A bull in a bear market's analysis. It's there already.

Stock Pricks (They hurt like cactus.)

1.) NI - The stock seemed to have been toppish. The volume surge the past days werent warranted. As you can see, the stock cannot go higher than 14.75 pesos anymore. Volumes have declined tremendously, stochastics also gave a sell signal. Even if MACD is at the positive zero line. There's no reason to cling to this stock when there's so much action elsewhere.

Recommendation: Cut your loss if you have any shares. Sell it down if need be.

2.) CMT - this stock is also toppish. The resistance comes at Php1.00, volumes are very low despite the 72 point surge of the PSEI. Stochastics also tell us a sell signal.

Cut your losses

- Nix

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