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.

Daiwa Strikes Again

Remember a few months back when Daiwa forced the market to close higher by suddenly posting heavy buying on selected index issues during pre-close? Today, I was rather surprised that we closed 99 points down. Before pre-closing, there was actually some aggressive foreign buying on issues like AP and AGI. I thought there would be some buying support by the close on other issues as well so I assumed the market will close less than -49 points. To my surprise, we closed -99 points. This isn't good...the forced closings, I mean. I checked the first transaction that struck at 12nn and I saw mostly selling from Daiwa. These are from stocks like SM, TEL, BPI, MBT, AGI. 

If I recall correctly, the pre-close period was made in order to dissuade forced closings. Here, you can't just hit one board lot and if that's the last transaction, that would be the close for the day. In theory, that sounded good. But in actuality and experience, we've seen far more radical forced closings after the pre-close period was implemented. Hmmm... 

PCOR is still the name of the game! I hesitated to buy this. I had two buying windows. I missed them both. I hesitate a lot these days. :P 

I sold several stocks today. Hehe. Some, a bit too late. But I'm more convinced I need to clean my portfolio so I can start fresh again. This is the only way I can "play". You can't play when you've got a lot of baggage right? I'm particularly interested in HLCM. I wonder if it can breakout atbove 13.50 tomorrow. Looks promising. I think I'll buy a little. 

I'm also rather curious with BEL, LR and CMT. They moved in their typical toppish formation. I saw the same thing in SMC before but SMC didn't correct back down as I expected. I'm looking at a possible similarity to emerge with SMC, BEL, LR and CMT. SMC is currently consolidating at its high after supposedly peaking. BEL and CMT are doing the same. Will LR follow? Next question is, can they breakout from here? 

The Only Game In Town

The market is not doing so well. I think our bleeding portfolios is enough proof of that. If we take a look at the index, it is dangerously courting support at 4,050. Remember last Wednesday, the index formed a bullish looking hammer? I took that as a sign that prices no longer want to go down further. The Dow went up big time that night and apparently, people took this as an opportunity to sell. We closed the week near the lows at 4,053. The index's potential downtrend line seems to be holding. All we need now to confirm the downtrend is a convincing breakdown below 4,050. Yikes!  

Given our market conditions, I don't even bother bottom picking because low is relative. Oh wait, actually, I tried in MPI last Thursday. It was an experiment that failed! I bought near support at 3.71 but MPI closed the next day below support at 3.56. I cut loss at 3.65 and 3.59. :P If you think about it, we haven't really corrected that much. We just think the correction is so deep already because we bought at higher prices. So, if you think you're wounded and bleeding now, I think the market will give you more reasons to think again. 

If you look closely though, there are actually a handful of counter trend stocks. The more obvious one is PCOR, followed by SMC, PNX, CMT and BEL. That is in the order of strength.

LPZ Trend Following

Here's a good chart to remind us all to always follow stops, never average down and never go against the trend.

"But if after a long steady rise a stock turns and gradually begins to go down, with only occasionally small rallies, it is obvious that the line of least resistance has changed from upward to downward. Such being the case why should anyone ask for explanations? There are probably very good reasons why it should go down." -Jesse Livermore

What to Buy

Today was an interesting day. We were down as much as 85 points but we were still able to close the day up by 22 points. We formed a cool looking hammer today. If you remember, the index has support at 4,050. Today's low was at 4,062. So, the market fell close to support but we were still able to push higher. This confirms that there are, indeed, buyers down there and we won't just breakdown easily (or so, I hope). The inability of prices to fall further as seen through the hammer formation makes me think that we might just move sideways for now with support at 4050 and resistance at last Monday's high of 4,220. 

I had a funny experience with SMB. I said yesterday that I found SMB toppish but it still continued to go higher during most part of the today's trading. Ah, I told myself this morning, SMB is finally taking a breather by consolidating at its highs above 30 pesos. I bought some shares at 30.40. Since my initial analysis on SMB is that it's toppish, I was extra careful so I had to watch it most of the time. I watched it consolidate for so long that I decided it wasn't worth it. I sold even before my cut loss was hit. Later on, it spiked to 31.90! That was the spike I was waiting for! Anyway, I wasn't idle after I've sold SMB so it wasn't such a loss that I shifted my attention elsewhere. I was very much preoccupied with CMT and AP. Come closing, I was very pleased to see SMB at 125. :P (Sorry, I don't mean to sound mean. :P) SMC was infected with SMB's weakness too. 

Hmm... I'm still trying to figure out what else I can buy. Right now, I'm limiting myself to trending stocks. Normally, I would already bet on a stock that's consolidating in anticipation of a breakout but stocks like MPI, PNB, RFM, VLL, UBP are stuck in a range near their support. Right now, I can't tell where we're headed so I'm staying out and waiting for a breakout. There's another problem with this kind of strategy though...it's the occurrence of false breakouts, which occurs more often in a stock that has recently corrected. I'm over thinking, aren't I? In so many words, I guess, all I want to say is, "UGH! I'm so liquid. What should I buy?!" :P Haha!

Let's Play!

So, is that it? The bounce, I mean.

Yoikes!

Well, I've sold most of my positions. Haha! I'm 70% cash. I have GMAP, VLL and PNX. I'm not comfortable with the market so I don't think I'll be going back to my favorites soon. These are...suddenly, I forgot what they are. Haha! I have a new project though. As I said, Tsupita, ON! I bought PNX today. Not on breakout, at first. I bought it because it was consolidating at its highs and looked ready to breakout. And breakout, it did! Hello, very selective market! 

I was reviewing charts this afternoon. Out of so many issues, I only found around 6 that looked interesting, namely, SMC, SMB, GSMI, PCOR, TBGI, and PNX. The thing is, they've already gone up. So I'm muling over possible entry strategies. Out of the 6, I'm interested in SMC, GSMI, TBGI, and PNX, of course. ATS was a top gainer a few days ago. It is taking a breather right now. I'm very interested to know if that's it for ATS or if it is just resting before continuing higher. 

BTW, namamalikmata lang ba ako or is ALPHA gearing up? Hahaha! 

To sum it all up, I'm basically repositioning... Wait, I'm not sure if it's apt to say "repositioning" because I'm not really gonna position. Just tsupita. Haha! I still haven't given up hope on selected issues though. As of today, MPI, UBP, and CMT are just courting their resistances. I wonder if they have enough spirit to win them over and breakout. On the other hand, DMC is doing its best to hold above support. 

In times like these, only buy the strongest stocks, momentum/swing/short-term traders! :) 


BTW, SMB is a monster!! I have a theory though. It is near the top. I can't say for sure about medium term but in the short-term, I think it's gonna get tired after spiking up that much today. I think, a spike on top is indicative of the end of the uptrend in the short-term. We'll see. :) I don't have SMB anyway so let's see how my unbiased opinion will fare. 

JGS to new high?

I started the week with a pledge to donate 10% of my profits this year to our company sponsored school in the south. We aim to reach 1.5m in donations and I hope we make it. If you are very profitable this year, please do share your blessings too this Christmas. :)

I've been holding AP and ACR since October, so it has been a very good week for me. I actually more than tripled my ACR shares because the price action tells me I'm right with my earlier trades. I cut loss my MBT coz the price action last Friday was not looking good. I don't know the reason for the sell-off but the ticker as indicator is good enough. I also made a bad trade of buying HLCM at 12.54 only to sell at 12.48. I was not really comfortable with its volume.

Anyway, I'd like to share a buy signal I got for JGS. It may breakout to new highs or not. Only the market knows. :) It has been consolidating for almost 2 months already and my bet is it will make new highs!

Déjà Vu?

Pop Quiz! 

Suppose you bought SMC today, yesterday or a couple of days ago. Based on this chart alone, what do you think you ought to have done today? O:)