Stocks are bought on expectations, not facts.

May Extra Regalo pa!

My amibroker has been bugging me to buy MER!! but I promised myself not to buy anything anymore for the year. I'm not really sure if the recent move of MER is a real one or just a dress up. Anyway, I will probably take this trade coz super kulit na ni amibroker.. screaming with 4 buy signals! Will just have my stop ready in case of a false move. In case it moves in my favor, I'm looking to have a new high and will just let it run!

Have a prosperous new year to all of you! :)

"When I buy stocks for a rise I like to pay top prices and when I sell I must sell low or not at all."

~Jesse Livermore


In my first year of trading (last year), I didn't experience a Christmas rally. So, come Christmas week, I was expecting a rather sleepy Christmas and even a sleepier last week of the year. (Also due to the fact that prices have been going up for several months. So, I hardly think fund managers or what not need to raise prices to make their portfolios look good.) To my surprise, the index was up the whole week last week. Oh, Santa does exist!! I am now a believer! Hohoho!

Because Santa showed some muscle last week, I will give the last week of the year the benefit of the doubt. Given the excitement we had the past couple of days, I think it's possible for some of the plays to continue this week. I got my eye on our recent high fliers namely, PCOR, PNX, and BEL. They recently corrected back down. I'll give them a few days to bottom out then on the bounce, it's hello again, old friends. :) 

I have a confession to make. I said I was on a vacation already right? Well, I didn't completely isolate myself from trading last week. Just partially. Hihihi! Remember I said I was bullish on CMT and PX and I was willing to hold on to my position until next year? I also said that if they did breakout I was willing to buy more. And buy more I did on PX (I boxed the part where I averaged up). At the end of December 22's trading day, my client asked me if I would have bought PX that day. I told him I bought and he was like, "Akala ko ba you're on vacation?!" Hahaha!! Oops! Couldn't help it!! Cheers, Melvin! :)) 

I also bought something else. Yes, this is me position-ing for the new year. I'm not trading as actively as I used to so I decided to position. I bought DMC. I like the failed head and shoulder formation, then the inverse head and shoulder that formed soon after. My only concern now is volume. Since it's Christmas (and not everyone is trading), I'll give it the benefit of the doubt. When I saw the chart of SCC though, I couldn't help but feel like I bought the wrong stock. DMC has a good chart, yes, but SCC is much stronger as it didn't correct as much as DMC. That is the kind of chart that I like because tendency is, it will move faster once it breaks its previous all time high. Anyway, I started with DMC already and I'm willing to stick with it. Yeees, conviction! Is this the new me?? Hohoho!

LND and LC Trend Following

LND closes yesterday at its recent high of .87. It gapped up today and retraced intraday to its support at .87. But closed at .91. Now doing a new 52-week high which I love to play.

LC just broke the 'mustache' of Lolo Santa. Target .47. Just using my signals.

Both signals are generated by the system. No emotions, just following them. Please trade with caution and always use proper money management. :)

Trend Following PCOR, ICT, and PX

PCOR continues to be strong despite a weak PSEi. PCOR first gave a buy signal Nov 23 which I didn't follow, unfortunately. So I waited for a second buy setup. Today it gave its third buy signal after breaking a bull flag. I'll continue to hold and trail my stops. One big lesson again for me is to always follow my signals. I don't know what's with me but when I follow a certain signal, that is when I get a whipsaw. And then the signal that I didn't follow, is the one doing a strong trend! :(

ICT also continues to trend in the short term so I nibbled some this week. Looks like it is good to accumulate around the 41.50 to 42 area.

Meanwhile, PX is also trending up in the short term and is consolidating in a Darvas Box. My plan is to add more if 15 is broken. As always, nothing beats good money management in this kind of market.


Yesterday, it looked like prices have found a bottom. Today though, it seems that Mark (Nickname: Mark, First name: Stock, Last Name: Market) was just toying with our emotions. I can already hear him say, “Kala mo ha!”.  Such a player, that one! :)) This is exactly why I decided to take my vacation --->

Honestly, I was so itchy to buy something yesterday. But like I said the other day, I’m on vacation already so I hesitated. And I’m glad I did! I still have some open positions on PX and CMT though. I’m pretty comfortable with them so I decided to keep them. My CMT is a bit below cost and PX, breakeven but I still like the chart so I decided to make an exception. I’m still on the lookout for their support levels but I think I can hold them until next year if nothing exciting happens. Should something exciting happen though, I’m ready to sell or buy more. :P (Some vacation, this is! :P)

I made another exception yesterday. I bought PCOR. I actually hesitated near the open because I was hoping for a more dried up kind of move. When it suddenly broke out, I bought my first line, then another, then another. PNX, kahit nabenta kita ng 10.20, masaya parin ako dahil meron naman akong PCOR. And aha! PNX was toppish today. PCOR is just beginning! (I hope). Bukas ulit, please? Haha!

I have a theory. Remember the all time high plays before on AP, AEV, DMC, URC, SMDC, etc? I think the all time high play is still here but it just shifted elsewhere. The others have become too high and are now a bit choppy. The new all time high plays are in PNX, HLCM, SMC, SMB and soon, on PCOR. 

Speaking of HLCM, a client of mine was talking to me about the cements: CMT, HLCM, RCM. Interesting! HLCM and RCM moved today. RCM has been going up for four days now and with a sideways resistance at 7.20, it may either consolidate first before breaking out or suddenly spiking up. HLCM finally showed some spunk today by breaking its current downswing. Given the draggy move the past few weeks, I think HLCM may move in a sideways to up kind of behavior rather than spiking up. Well, I have a certain bias to chart setups right? I like consolidations at the highs. So far, HLCM or RCM doesn't have that. Guess which stock does. That's the reason why I'm so comfortable with it. :) 

Gold Fields Update on Lepanto Deal

I got the chance to exchange emails with Ms. Nikki Catrakilis-Wagner, Investor Relations from Gold Fields, a gold exploration company that struck a deal with locally listed miner, Lepanto (LC). I requested for an explanation/update on the deal they made last September. Please check her reply to my email below.

Dear Mr. Evangelista,

Holiday Greetings

From Christina Hunt and The Gang

Silent Night

I think it will be a very sleepy Stock Market Christmas this year. Nothing seems to have momentum. I noticed out of 5 stocks that I bought recently, only 1 gave me a profit. I had this kind of win-loss ratio for two rounds. It was on the second round that I decided it wasn't worth it anymore. Vacation time! :) I'll still be watching the market because...I have to (haha!) but I doubt I'll be trading any time soon. 

BTW, I might go to the Absolute Traders Reunion and Chart Analysis party tonight. Who's coming?! :) Tara! 

Chasing LND

Three days ago, I bought LND at 0.74 and 0.75. It looked like it wanted to break above its resistance already but, lo and behold, the day I bought, LND formed an inverted hammer... I held on. Tuesday was promising. LND gapped down at the opening but was able to close unchanged. Yesterday, I just found myself shaking my head. It hit resistance once again! Ayyy nako! I sold at 0.74. Today, I bought back at 0.8 and 0.81. =))

Let's try this. Short EURUSD 1H.

Shorted EURUSD for a potential double top and EMA crossover sell in the 1H chart. Let's see where it goes.

In the local market, I started to nibble some JFC as it respected 50% fibonacci. It then formed bullish candles right after and is now about to give a EMA crossover buy. :) I also got some PX with me for a breakout trade.


Do I seem fickle to you? Why? Because I'm bullish again. :P But wait, don't get me wrong, I'm still going with my "very selective market" line but my list of stocks I am bullish about has expanded a bit. It's still a bit experimental though. It's experimental because it has a different chart setup from my tsupita trades. So, I'm thinking it would be more of a position-ish trade. Here are the stocks I like:

1. AGI - Finally, after three straight days, it is correcting back down from a high of 13.12. It looks like AGI is resuming its uptrend after a month long consolidation. A (buying) window is currently open. Support may be found at 12.30. I will remain confident that the current uptrend is intact as long as prices hold above this level. 

2. AT - Failed head and shoulder top indicates a continuation of the prior uptrend. With this, I think it's possible for AT to retest its previous high of 19.98. Be mindful of resistances at 17.74 and 18.4. Buy the dips.

3. PX - Appears to be taking its cue from AT. Immediate resistance may be found at 15. 

4. DMC - Formed a bear trap by falling bellow support at 33. It is now retesting its down trend line resistance. Now, we will see if the bounce is of the dead cat variety or if it had some strength behind it. Resistances to watch: 35.5 and 37.85.

5. BPI - Looks poised to retest its recent high of 61.50. Note that 61.25 was the 2007 triple top high. A convincing break above these levels will make BPI look bullish in the long term. 

6. EDC - Last Friday, EDC looked like it hit resistance and was ready to go lower again. Today though, instead of doing just that, it even went above last Friday's high of 5.86. Also, notice that EDC has been forming bullish higher lows (L1= 5.33; L2= 5.54). This tells me that EDC is, indeed, trying to form a bottom. To confirm, EDC will have to convincingly break its resistance of 5.97. 

(Save the best for last)
7. CMT - My pick for tomorrow. I'm almost sure that momentum is coming for this stock. Don't you find it curious why CMT hasn't touched its psychological support of 2 pesos in a while? It has been consolidating above its higher support of 2.07 the past few days. 

Philex Mining Corporation

PX has been consolidating for the loooooongest time. And because of that, I like it more! In the medium term perspective, it's trying to break its downtrend. In the short-term, it is moving sideways with support at 13.8 and resistance at 14.20. There is actually, a lower support level at 12.90 but see how fast PX bounced from this low? That indicates PX can no longer fall any further. So now, I am waiting for a convincing break above 14.20. But still be mindful of resistance at 15 pesos. The inability to break 15 would make it look like PX is merely moving within a 2 peso range from 12.90 to 15. It is only upon breaking the 15 level that PX has a chance of retesting 17.

Cebu Air, Inc.

I've been waiting for CEB to form something...anything! I've been on the lookout for CEB for a few weeks now ever since I saw the symmetrical triangle it was trying to form. Since it has no prior trend to continue or reverse, I'm taking my cue on short-term trends. A symmetrical triangle is a neutral pattern anyway so it can go either way. See the 50 cent consolidation it made last week? When it broke above this last Thursday and even made a follow through last Friday, I was more confident that it can break its resistance at 127. If it does, then we are looking at a target of 144.6 but still be mindful of its horizontal resistances at 129.4 and 133.5. 

My Featherweight Champion

Wow! Up 146 points. We'ere starting to move like the Dow ha, in the absolute change kind of way. I don't think I've experienced +/-100 points before last month.

The index broke its downtrend line. I think the question we all want to ask is, "Will we be able to trend up from here?" I think that's possible but the index will still encounter some difficulty going back up so don't expect the index to shoot up. There must still be some people who didn't sell as the market fell and are hoping to sell in this current rally. But there also other people who got spooked with our month long correction and must have sold most of their positions and are currently looking to buy something. (I'm part of this group.) 

My game plan remains the same: Buy the strongest stocks. They will be ones with the smoothest uptrends. I'm still a bit jittery and lacking confidence in other stocks that have corrected a lot. But I'm also rather curious with AT and DMC. They formed a head and shoulder top with no confirmed breakdown yet. Just in case, I am on the lookout for these stocks, in the event they continue their uptrend rather than reverse it. I won't keep my hopes up but that doesn't mean I won't watch out for it. I'm also curious about MPI, EDC and PX...what will they do after they break above their respective downtrend lines. 

A few days ago, I mentioned I was also curious with SMC, BEL, LR and CMT. BEL and LR broke out today. I think SMC and CMT aren't far behind. 

I officially love HLCM. Haha! It's my very own "featherweight champion". Anyway, I allocated a small account for my tsupita trades. I opened this account just last November. I am proud to report a realized 17% return as of today. :-> 9% of which was from HLCM. I bought yesterday at 13.41 and sold today at 16. :) 

Abitrade's "Caveman System" backtested!

One of our readers, Abi, requested to have his system backtested. He called it the "Caveman System" as it can be executed by anyone.

Simply buy on a 60-day (3-month) high breakout and sell on a 40-day (2 month) low breakdown. The system was simple but results were profitable on a 10-yr period. Note that the testing is long biased same with the PSE.