Anecdote: You've had too much of stock trading when....

...you start to unknowingly use stock tickers to replace the real names of the companies during a conversation with your wife.

It did happen to me a few nights ago. I rendered OT work, and ate dinner at Jollibee. When I got home, my wife and I had a little conversation. She asked me "saan ka na nag dinner?" and I unknowingly answered her back, "sa JFC! ". And ofcourse I got a blank stare from her and she replied "saan? sa KFC?". =)

If you have your own anecdote to tell or if you have any other ideas on "You've had too much of stock trading when..." or "You've had too much of technical analysis when..." , do leave a comment to share. I'll post those stories or ideas next week, just for fun. =). Thanks!

StockWatch (Dec 17-21, 2007): PSEi, SMC, MWC, SMPH

PSEi (Chart: Daily Resistance: 3630 Support: 3500/3450)

After a great upward move breaking the resistance line, the index was unable to hold its position above the resistance line and fell below the line. The gains that was made the previous week was wiped out last week. The bearish move by the index was a surprise for me as I was very much expecting that the index would probably move sideways and consolidate further before moving upward considering the bullish signs that is has manifested. Looks like the general expectation that the index will reach 4000 level before the year end will not happen. We only have this week to consider as a normal trading week as the trading action on the last week of the year will probably be lethargic as some may be on holiday mode already. So it will be impossible for the index to rally 500 points in just 1 week. The index may still reach the 3520 level next week before moving either sideways or upward in between 3600-3700

SMC(Chart: Daily Resistance: 60.50/62 Support: 58/55)

SMC and SMCB had a very bullish move last week breaking several resistance lines with large volume. The stock went as high as 60.50 and may still continue to move probably reaching up to 62. However, looking at the 3 consecutive trading days where it made a wild run upwards, it has formed a “Three advancing white soldier” candle stick pattern, with the third candle stick showing signs of weakness as the body of the candle stick is smaller relative to the first and second candle sticks. I believe that the recent upward move is already a sufficient gain for those who have this stock, so it would be best to start cashing in on those gains. The stock is still bullish, so we can just buy back at later time, probably with in the level of 50-55. Don’t forget the ex-div date on Dec 18, if you get too complacent with the recent bullishness of the stock, you just might find yourself loosing some gains come ex-div date.

MWC( Chart: Daily Resistance: 18.50 Support: 17)

MWC is showing signs of divergence of MACD movement against price. Price has formed a higher high, while MACD seems to be having a hard time to establish a higher high. Price as seen on past movement, after a run up, the price action goes on sideways, so expect that price may move sideways with support at 17. Watch out if price moves below 17 with volume. If it does, we may see price to move towards 13.

SMPH (Chart: Daily Resistance: 10.75 Support: 10/9.30)

SMPH broke down from a support line of around 10.50 and with large volume. As of current the area pattern seems to be a head and shoulder or a symmetrical triangle. Either way, its downward target price is around 6.00. However, RSI is currently oversold, so there is a chance that a bounce may happen and hopefully that bounce would have volume that may counter the effects of the breakdown. If that bounce is able to counter the breakdown, then that is a very bullish action and may be considered as a failed head and shoulder. Assuming this becomes a failed head and shoulder, a good volume to support the action would be around 30M shares. Otherwise it’s just a futile attempt by the bulls to re-instate the price above the resistance line.

In Retrospect: COL, BPC, MIC

COL

COL retraced 60% of its recent short upward move placing the stock near the resistance line of the symmetrical triangle. As of current even with the recent downward move, the stock still displays some bullish signs. The MACD is still above the signal line, the MA’s are still in the proper order, and the volume on the downward move were not accompanied by volume as there was more volume on the days when it was bought up, than when it was sold down. If this stock is still bullish, it may be able to pull up above the 65day MA and hopefully consolidate and hold its position above the MA. Otherwise, if the stock has really turned bearish, we can confirm it if it breaks the 10.75 support.

BPC

BPC was unable to hold its position above the resistance-turned-support line and went back in the triangle on the last trading day. This stock may still move further downwards probably reaching 3.80.

MIC

MIC did not break out from the symmetrical triangle last week. Instead it consolidated further. The price action is now near the apex of the symmetrical triangle, there is a higher possibility that we may have to redraw our triangle. What this stock currently needs is for it to consolidate in between 7.30 -7.80, the price levels of the previous gap down last October so as to eliminate resistance coming from those still holding position at those levels. For the coming week, this stock will probably move down to sideways. Watch out for support at 6.10

StockWatch (Dec 10-14, 2007): PSEi, COL, BPC, MIC

PSEi (Chart: Daily Resistance : 3770/3810/3890 Support: 3680)

The index showed further bullishness as it was able to open higher on the first trading day last week. This bullishness was further supported by the 4 other actions by the index. First is the gap up that happened on Thursday, which led to the second action which is the breaking of resistance line established from the recent downward trend. The third is the closing of the gap from the first week of November and fourth is the MACD crossing above the signal line. The breakout from the resistance line is just a confirmation of the recent upward move, however it is still not a breakout from an area pattern as we do not have a valid area pattern for now. For the coming week, we may see the index consolidate in a sideward movement and may also re-test the resistance-turned-support line. The sideways consolidation is what is best for the index as it has now recovered 60% of the recent downward move from October and it still has not consolidated. Any further upward move might place the index in levels where the bulls might not be able to support.

COL (Chart: Daily Resistance: 14.50 Support: 10.50)

This stock was featured by Bonner at the Absolute Traders website. It has formed a symmetrical triangle with resistance at 14.50. Possible upside target price of 22. For those doing range trading, you can buy at 12.50, sell at 14.50, cutloss at 11.75. As of current the stock is now bullish as it has gone past the 65 day MA and MACD is now above the signal line. Average volume is around 1M, a good break out volume should be above 4M

BPC (Chart: Daily Resistance: 4.65/4.85 Support: 4.35)

BPC seems to have broken out of a symmetrical triangle formation, however I am not quite sure about the volume on breakout. It was accompanied by large volume, but I am not sure whether it is sufficient. The stock is currently re-testing the support line. What we need to see is for the volume to pickup for the coming days. Also what is noticeable in the chart is a head and shoulder formation that did not push thru. However it cannot be considered as a failed head and shoulder as it did not break down, so it is currently more of a symmetrical triangle. Target price for the triangle is around 7. MACD is bullish, but RSI is near overbought, so there might be some further re-testing of support for the coming days.

MIC (Chart: Daily Resistance: 7.50 Support: 6.80/ 5.60)

MIC is also a candidate for a symmetrical triangle. Breakout point is 7.50 Target price is 15. MACD is currently bullish and RSI is just halfway from being oversold. Average volume is around 4M, a good breakout volume is around 20M shares.

In Retrospect: SMC, JFC

SMC

SMC had tough time last week. The bears were successful last week of preventing the price from moving further as trading was always closing lower than the opening price. During the bearish trading last week, it was somehow able to form a support at 50. However, a resistance was also formed at 51.50. So we could say that it is currently consolidating and moving side ways. Checking on the indicators, the MACD has crossed above the signal line, which is bullish. The RSI on the other hand still looks good as it is still below the centerline of 50, which means the recent bearish week is not yet the end for this stock and that it is just taking a breather from the recent upward move.

JFC

JFC had a very bullish start last week with the stock opening higher than its previous week’s close, reaching 52 before closing at 51.50. The rest of the week was characterized by bearish action topping with a sign of indecision on the last day as price opened and closed on the same level. The stock may further consolidate next week, as it is currently in between the 65 and 130 day MA. Sideways consolidation is actually good for the stock at this point as a breather from the recent upward move. Still watch out for the possible inverse head and shoulder formation with resistance at 54.

StockWatch (Dec 03-07, 2007): PSEi, SMC, JFC

PSEi (Chart :Daily Resistance: 3620/3670/3730 Support: 3500)

The index had a very bullish action last week and recovered 30% of the recent downward move. There was an unusually large volume traded last Tuesday and we can probably consider this as a support. One good thing that can be observed in the chart is that the gap up that happened on the first trading day last week created an island reversal, now how high can the index go is still anybody’s guess. Last week also, the incident at the Manila Peninsula did not have much of a negative effect on the index, but it somehow has shown a little bit of indecision on where it will move next as it closed just below the opening level creating a doji. The doji that formed I think definitely reflected the current situation for the index. We have the recently formed island reversal and a 20% recovery from the downward move which are bullish actions, however, due to last Thursday’s incident at Makati, there definitely occurred some hesitations and bearish reactions that prevented the index from closing higher, thus forming a doji. This coming Monday’s trading would be a critical indication of how the market will turnout for the rest of the week. There might be some selling happening when the index opens and that might be associated with the uncertainty and cautious trading. But observe the index closely, if the sentiment is still bullish, the index can immediately pull up from the selling pressure, or probably immediately open higher. Now looking at the DJIA last week, it formed a stalled candle stick pattern (3 successive white candle with the first 2 candle sticks being long and the 3rd a small bodied candle stick) and last Friday's trading had a higher close, but it formed a black candle with large volume, so there might be some bearish sentiment that could affect our local market for the coming week. Watch out for support at 3500, breaking this level might be an indication of a return to downward move. An MACD cross above the signal line is also poised to happen, if it does, then it is a bullish confirmation of the recent upward move that we are experiencing.

Erratum: I earlier posted a wrong info on the DJIA having gained 300pts, it actually gained only around 60 pts last Friday, forming a black candle.

SMC Daily Chart

SMC Weekly Chart

SMC (Resistance: 51.50/54/56.50 Support: 46.50/42.50)

SMC now has an island reversal formed with an exceptionally large volume as shown in the daily chart. Looking at the weekly chart we can see that it fell short of being a bullish engulfing formation, however, the volume says a lot about the bullishness of this stock as it had an exceptionally large volume for last week. On the daily chart we can also see the bullishness as the stock was sold down with low volume, but was bought up the next day with more than double volume when it was sold down. Another bullish indicator is the MACD which is now poised to cross above the signal line. There is no price target for this since we do not have an area pattern formed. The only guide we have for selling are the different resistance levels and also our risk-to-reward ratio. The upcoming resistance for this stock are a.) 51.50, the highest the stock went last week, b.) 54 which is a long standing support that turned resistance when the stock broke down last November, and c.) 56.50, the 38.2% Fib retracement. Watchout for the 54-56.50 levels, those that were able to buy at 45 and below may start cashing in on the stock at those levels. Average volume for this stock is around 300T shares traded, a sell down near or above the average volume may indicate that some have started cashing in on the stock. If the stock was able to go past the 54-56.50 levels with low volume on sell downs, then there is a higher chance that the stock may reach the 65 level which is the 61.8% Fib retracement.

JFC (Chart: Daily Resistance: 51/55 Support: 48.50/45)

JFC showed a bullish movement last Thursday when it closed the gap formed last Nov 20 accompanied with a large volume of about 2.9M shares. The MACD has currently crossed above the signal line indicating a buy. The only hesitation that I have with the stock is that it formed a large upper shadow, which indicated that there was not enough bullish sentiment that could hold the stock at those price levels. However even though it was not able to hold price at those levels, it was able to close the gap formed last Nov 20 which can also be interpreted as a bullish move. We need to watch the succeeding trading days though. Watch out for signs of diminishing bullishness such as high volume on selling days and being unable to close above the 260 day MA. Also watch out for the inverse head and shoulder formation and possible resistance at 54-55 levels.

In Retrospect: GLO

GLO

The support at 1390 was able to hold for GLO, after which the price gapped up on the first trading day. Price went up to as high as 1560 before closing at 1520 last Friday. The gap up formed an island reversal, however a word of caution though, the upward movements were accompanied with below average volume. Watchout for resistance at 1570 (Fib 50%), 1610 (Fib 61.8%). I expect further resistance in between 1610 -1700 levels as those price levels are areas where the price consolidated before moving down. Even with the recent upward movement MACD is still below the centerline and also below signal line, so playing with this stock should be a hit and run approach.