StockWatch (May 15-19,2006) PHISIX and LC/LCB

PHISIX (Chart:Daily ** Support :2510-2515** Resistance: 2550 )

Phisix has had a very profitable bull run. But upon seeing last week’s chart, the Phisix has now started to consolidate inside a symmetrical triangle. The MACD and the 3 MA’s are still looking very good but the RSI is still above the overbought level. I expect that by this week, the Phisix would either consolidate for the week or would break above the symmetrical triangle that has formed. My bet on the Phisix is that it would still consolidate this week and then try to break the symm triangle’s resistance by end of this week or next week. Aside from the symmetrical triangle resistance we also have an immediate resistance of 2600, the highest since last week and a major resistance of 2635, which is the previous high since 1999. If the bulls become successful in breaking the symmetrical triangle’s resistance, we could expect another bull run to the 2600 level and maybe test the resistance of 2630 level before going into consolidation phase once again.

LCB (Chart:Daily ** Support: 0.40-0.41 Resistance: 0.47)

LCB as well as LC are candidates for range trading. At current it has reached the resistance at 0.47. I expect it to start its down movement this week as its RSI has reached the overbought level. If you’re going to range trade this stock, try to catch it near the support of 0.40-0.42. This stock also looks like its either forming an ascending triangle or a rising wedge.

The Trend is your Friend, but a Trailing Stop is your Best Friend!

I had a mixed feeling on the current bull run. I was definitely happy that my stock went up(of course who wouldn’t be?), but at the same time I was apprehensive of the movement.

Generally, I was apprehensive on the whole market as from my last analysis, the market was overbought, with lots of stocks already breaking their resistance and reaching the RSI overbought line a week ago. I expected that any upward movement for the week that passed might just be some form of a last salvo from the bulls. I was expecting a correction, and I was expecting it to hit hard and fast just as the bull run did, that’s why I am very apprehensive. I was afraid that the profit I now have might just be snatched away by a sudden correction. I had two options, sell once my target price has been reached or try to maximize my profit but with the risk of being caught in a selling stampede during the correction.

But last Saturday night’s EB took my worries away. I got reminded of the phrase, the “Trend is your Friend”. A stock movement that is trending upward is your friend, and you just would have to ride the trend.

The next question I had was, how would I be able to confirm if the Trend is really my friend? As what Danny has emphasized time and again, look at the volume!. The volume would tell you how true your friend is to you. Commenting a line from Wilson, “if there is volume there is a commitment”. If the upward trend is accompanied by large volume, it confirms that the upward trend is not likely to return to the take off level. Because there is a large volume accompanying the trend, there is a large confirmed commitment from the new owners that they are not likely to sell the stock at a price lower than their buying level.

But…even friends become worst of enemies… I wouldn’t discount the possibility of a trend encountering a correction; of course it’s not a perpetual upward trend. If the Trend is your friend, then a Trailing Stop is a Trader’s best friend! If you’re a Maverick trader who likes to maximize profits way beyond a target price, then I suggest that you start to be-friend the Trailing Stop. A trailing stop saves you from a back stabbing Trend friend by protecting your profit. Too bad my current broker, a Broker Persistently Inaccessible, doesn’t have a Trailing stop facility. If it did, I wouldn’t be apprehensive of maximizing my profit. But come to think of it do other online trading systems have a trailing stop?

Hurrah to the Trader Central EB Organizers!!!

I attended the Trader Central EB last Saturday night and it was definitely a great success. On the moment I stepped in the EB area, I was welcomed with a great smile from no other than the First Lady of Accord Capital, Madame President Shirley and of course the friendly pipol from Accord (I think they were the marketing officers). I was able to catch only half part of the program coz I came in late (sagabal talaga sa gimik ang trabaho!). But even though I was late, the half part of the program was still very much informative.

The night continued with the analysis of PHISIX and some stocks, by request from the attendees. The veteran traders Danny, Bonner, and Miko were there to give their personal analysis on the stocks.

The night was also the launching night of Accord Capital’s online trading platform www.philstocks.ph and this was introduced by no other than the main Techie man from Accord, Rapi.

At the end of the night I got to chat with my fellow El Dorado batchmates and we got to conclude “na Sulit yun pag attend ng EB”. Of course sulit na sulit, El Dorado Members got to pay only P100, courtesy of Accord. And for that amount we got, a dinner, plus lots of freebies like personalized cap, mouse pad, snacks from Stateline Foods (courtesy of an El Dorado member from Batch 5 or 6? sorry sir wasn’t able to take down you name) and cardboard fans from Inquirer courtesy of “Guyito” and “Morrissey” (it was one of the freebies that I got to immediately use, that night was a little bit humid, so the cardboard fans were definitely handy). The greatest freebies of all…were the analysis and personal recommendations from the Masters of TA.

Thanks and congratulations to Accord Capital and to the organizers of Trader Central for a great EB. Definitely looking forward to the next EB. Boss Bonner, sa hotel na ba yun susunod na EB? Sagot mo? hehehehehehe….. =)

Inretrospect (April 23-27,2006) PHISIX,DMC,PX/PXB

PHISIX

On my last analysis, I expected PHISIX to correct and it did the past week. It plunged to the support level of 2225. What I did not expect was for it to bounce back and break the resistance at 2260, the previous week’s high. I guess a lot are still bullish.

DMC

In my last analysis, I expected a correction and it did happen for only a day with a significant expansion on the downward movement. But a lot are still bullish with this stock that it had 2 consecutive gap up on the middle of the week accompanied by large volume. I’d like to conclude that the highest level can be considered as an island reversal, but the volume suggests otherwise. I still maintain a cautious stance on this stock, as it is still very much overbought.

PX/PXB

Looks like this stock is now confirmed to be on its way down. RSI still confirms an overbought level and MACD has started to move down the signal line. I still would like to maintain a cautious stance on this stock.