Bloody Hell!!!

The last weeks of May turned out to be a bloodbath as "Hot Money" flowed out from the Philippines. The Mokong is currently experiencing massive paper losses.

Weekly Review 20130519

PSEI

The week started with the Index reaching all time highs at 7262.38 to 7392.2. Most have already disclosed their corporate earnings, providing legitimacy to the strength of the Index. However, with no other catalyst seen in the near future and with the start of the boring months (May to August), many took this opportunity to take profits.

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WEB

The Mokong unloaded half as WEB may have entered consolidation.

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LPZ

The Mokong had to cut-loss LPZ since both horizontal and uptrend supports were breached.

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PF

The Mokong unloaded half of its position in PF due to uncertainty brought about by the news that SMC may be selling a portion of its stake in PF to support expansion in its other businesses. The last time SMC sold PF shares was at Php240/share to comply with the required public float.

HI

The Mokong took some profits in HI; still holding more than half.

FLI
The Mokong unloaded all of his FLI after the Index showed weakness. But as the week progressed, FLI bucked the trend of the Index closing at Php 2.22/share. #congratstoholders

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PIP

The Mokong bought a small portion of PIP due to its inclusion in the Small Caps category of the MSCI. The stock has been consolidating since the start of this year and with this MSCI inclusion together with strong consumer sentiment, the stock would hopefully break its slumber.

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ANS
The Mokong bought a small position in case the stock bounces from its horizontal and uptrend support.

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Weekly Review 20130513

It was surprising that the index did not fill the gap created after the Investment Grade Rating upgrade by S&P. The culprit for index' resilience may be due to the strong Q1 earnings of most listed companies. Will we wait for August for the Gap to be filled?

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WEB

After news that the freeze order on Ongpin's bank accounts were lifted, the Mokong bought WEB anticipating that jockeys would use this issue to pump the price. It has already been two consecutive trading days of gains. How far would they jack WEB?

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HI

While there was a slight rally on EEI last week, HI did the opposite. It seems that someone using BPItrade was unloading HI forcing the stock to close at Php7.6xx/share. The Mokong took this opportunity to increase his position. The stock is at both horizontal and uptrend support.

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RCB
After creating the Cup and Handle pattern, RCB is nicely moving within an uptrend channel. The Mokong bought back some RCB shares.

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LPZ

LPZ moved sideways this week threatening to break support. #anxiousmoments

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DMC: Sideways with an Upward Bias

After reaching its peak in May last year, DMC has been moving sideways for almost a year. 2012 earnings remain flat as lower prices for coal and nickel, and the rehab of SEM Calaca's other unit take their toll on the earnings. For 2013, the outlook for coal and nickel prices remain to be week, and any increase in the earnings of its electricity business will be offset by the lower earnings due to decreased ownership in Maynilad. However, with the growth of its real-estate and construction businesses, DMC may soon rejoin the bullishness of its fellow holding companies. Though price movement would be painfully slow, the Mokong bought DMC because of low downside risk. Hopefully its 2nd Quarter earnings would provide a positive surprise.

Net Income After Non-Contolling Interest, Php M
Business	2012	2011	Growth	2013 Earnings Outlook
Coal	1,739.00	2,379.00	-27%	Flat with an upward bias due to increased Coal Consumption of SCC's Power Plant
Nickel	341.00	917.00	-63%	Flat
Construction	1,220.00	1,117.00	9%	Positive Growth: PPP, SLTEC unit 2, SCC's Power Plant Expansion
Real-estate	2,182.00	1,795.00	22%	Positive Outlook for the Property Industry due to lower lending rates
Electricity	1,902.00	1,177.00	62%	Increased Generation due to completion of Power Plant Rehab
Water	2,264.00	2,195.00	3%	Decreased earnings due to divestment
Parent and Others	144.00	15.00	860%	Minimum impact to DMC's bottom line
Total	9,792.00	9,595.00	2%	2013 earnings will be flat with an upward bias

DMC's Boring Chart

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COMPARISON OF HOLDING COMPANIES
(Data form Bloomberg)

Stock	Last Price	Market Cap, Php B	Report	PE	P/B	ROE
AEV	57	314.75	2013:Q1	12.67	3.44	27%
AGI	26.45	271.64	2012:A	19.45	3.18	16%
DMC	59.6	158.27	2012:A	16.15	3.91	24%
GTCAP	860	149.90	2012:A	19.43	2.75	14%
JGS	48.5	329.66	2012:A	24.37	2.12	9%
LTG	25.55	270.35	2012:A	28.08	4.91	17%
MPI	6.18	160.78	2013:Q1	23.77	1.91	8%
SM	1160	728.61	2013:Q1	27.58	3.84	14%
SMC	123	292.69	2013:Q1	15.63	1.21	8%

LPZ: Technicals Unite

Technical indicators show that LPZ may have bottomed out and may move sideways with an upward bias. Its subsidiaries ABS and ABSP have recently performed well  and hopefully, market attention would overflow to LPZ.

Technical Indicators

* Candle bounced at both Horizontal Support and 100 Moving Average Line

* RSI holding current levels

* Stochastic at oversold levels

* Immediate Resistance at Php7.5/share

Catalysts

* Earnings Sentiment  on its subsidiaries, ABS and ABSP, due to Elections

* GLO might infuse capital or would buyout LPZ to acquire Bayantel

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PSEI: Super Gap!

The 2nd investment grade rating by S&P buoyed the index at 7215.35 creating a large vacuum  from 7108.28 to 7185.74. With "hot money" coming in, many may be enticed to assume that this could be a breakaway gap. However, to be on the safe side, always consider the possibility that this gap will be eventually filled since both RSI and STS are currently at overbought levels. Is it time to switch to laggard blue chips and second liners?

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S&P Gives 2nd Investment Grade Rating!

The PSEI was trading in the red almost the whole morning but as the afternoon session kicked-in, the Index seemed to be in steroids. The rally this afternoon was fueled by our 2nd Investment Grade Rating by S&P.

Now that "hot money" will be surely flowing to the Philippine Market, which blue chip or second liner would you choose.

Before going further, take note that data was collected from the investment tables/guides for April 2013 of COL, ABCAP and ATR only. The Mokong has no knowledge on the credibility of these brokers. Stocks that have no rating for a particular broker were given a zero value (-100%). Also, closing prices of 2 May 2013 were used in the computation.

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Caution: EDC, FGEN, FPH, PX and BLOOM have issues that may have not been factored in yet. 

Here is the complete list of the scanning: Click Me

Special thanks to those who provided the Mokong with the investment guides of their brokers. May the force be with you.

Can't Defeat the Game

The Mokong employed a cut-loss on LR and BLOOM due to sell-down of gaming stocks with the uncertainty in the new taxation ruling of BIR. When in doubt, pull out?

AGI           BEL           BLOOM           MCP

FLI: Ascending Triangle Breakout!

The Mokong bought some FLI after the price broke the Ascending Triangle forming since the peak in March this year. An ascending triangle is usually a consolidation period during a bullish trend and that the breaking of which, signifies the resumption of the uptrend. Of course, no chart pattern is 100% accurate. As a guide, shown below are target prices of various brokers: the average is at Php2.28/share.

BROKER	Target Price
ATR	2.20
ABCAP	2.50
RCBC	2.40
COL	2.00
Average	2.28

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Weekly Review: Fear Takes Over

The week was doing great until the DOJ decided to rekindle the smuggling issue with PNX, creating a selling frenzy, causing the stock to touch its lowest intra-day this year at Php8.5/share, and closed this week at Php8.9/share. Paper gains were wiped out! The Mokong struggled to unload positions in an attempt to at the very least, end break-even. PNX was sold from Php9.6sh to 9.7sh/share. With the stress of the PNX sell down, the Mokong decided to take some profits in PF. Most of the trades this week were heavily influenced by fear, shifting the Mokong's stand to be more conservative.

MCP

MCP gapped down after the disclosure that a huge sale of MCP shares was priced at Php14/share ("transaction price"). Also included in the disclosure was a provision for price stabilization. Since MCP was still trading below the transaction price the next day, the Mokong saw this as an opportunity: bought shares below the transaction price, then sold it as price stabilization kicked-in. One may wonder if the Mokong exited early as prices usually slowly appreciate above the transaction price. The early exit, however, was on the fear that MCP is already incurring rental fees to BEL, way ahead the start of their casino operations.

BLOOM

BLOOM's downtrend for two months may have reached its bottom: both RSI and STS are within oversold levels and are showing signs of recovery. The Mokong bought some BLOOM shares in anticipation of a possible "dead cat bounce". Near term resistance is at Php13/share.

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HI

Banking on EEI's sentiment, the Mokong bought HI after EEI broke the Php13.9/share resistance last Thursday. This morning, EEI continued its rally breaking the Php14/share. Some took notice, and they started to push HI above Php8.0/share. However, as the day progressed, EEI was losing steam. The Mokong, fearing that his paper gains would be wiped out, sold a portion of its position in HI. Half of it would be sold should EEI rally next week.

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SM
The Mokong added positions in SM after learning from the PMT chatroom that dividends were approved during their Annual Stockholders Meeting. However, the market snobbed the disclosure the following day, causing the Mokong to lighten his position on the fear that SM may prolong its sideways movement.

RCB

The Mokong sold RCB today. A trade influenced by being pissed off with PNX. Looking back, the Mokong feels regret.

From PNX to SM

Aside from the stock dividends, the Mokong was banking on PNX as a possible election play: increase in fuel consumption due to campaigning activities. But as the saying goes, "SHIT HAPPENS!!!". Now that the DOJ is reviving the 5 Billion pesos smuggling case against PNX, the Mokong deems it necessary to stay out and wait for it to create a new bottom. From the revenues of unloading PNX, the Mokong increased his exposure to SM. With the approval of the 25% stock dividends and the promise of Php11.8/share cash dividends, would SM finally bounce from that secondary uptrend support.

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LR: Riding BEL's Sentiment

With the gaming industry still at its infancy, historical data, especially on earnings, is limited. This situation forces the Mokong to rely heavily on tech analysis and guesstimating sentiment. Currently, there are four stocks considered part of the Gaming Industry: AGI, BLOOM, BEL and LR.

AGI is a conglomerate benefiting heavily in increase in domestic spending due to businesses in properties and consumer goods/services (including gaming - Resorts World). Its strong run-up testifies that business is doing great. Problem with AGI is that its gaming business may have been priced-in and upside would come from its other business.

BLOOM's move from Php12.sh to 16sh per share was more on people anticipating its casino operations which started this March, and its inclusion to the PSEI (an icing on the cake). Now that developments (earnings report and/or expansion of operations) would take time, people are getting less interested and are looking for faster horses.

The Mokong observed that during BLOOM's downtrend last week, BEL started to trend up. Does this signify that people are sifting to BEL? Are they taking positions in anticipation of BEL's casino operations next year?

The Mokong was not able to ride with BEL so he decided to buy LR. LR is within the boundaries of a jumbo symmetrical triangle. Hopefully, better earnings from its other businesses and the announcement of its 20% stock dividend date, would make LR break that symmetrical triangle. Taking a second look, the triangle reassembles a spear's head  which reminds us that Spartacus was killed by three spears - a bad omen? But come to think of it, "There is no greater victory, than to fall from this world, a free man". #spartacusfever

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Weekend Review

There is no place like home. If only work permits, the Mokong would willingly be a shareholder of Victory Liner and spend weekends at home. With the cold weather, view of pine trees, and the usual relaxed way of life, it is a shame that there is no trading today. Let's take this time to reflect on the past weeks' trades.

Sold DMC as it enters consolidation after breaching Php60/share. Let the RSI cool-down before re-entering.

RCB is currently supported at Php70/share after breaking that cup and handle pattern. Together with BDO, the above than average move last Friday may signify the shift of market sentiment back to banking. Resistance due to the uptrend line may still hinder possible rapid spikes.

Sold ABS for the fear of "sell on news" and RSI triggering a sell signal. The Mokong did not see the force of Mandarin during the last two daily candles of ABS. Let the dust settle before re-entering.

PSEI: Breakout!

The PSEI mostly consolidated this week as external events weighed heavily on our Market. However, the PSEI's break of the 6900 barrier may have started the trek upwards. What's surprising today was many "Basura" stocks showed off. Enticing hypnotized buyers to risk capital for the promise of greener pastures. With the index hopefully to trend upwards next week, would you stick to Blue Chips, or would you be brave enough to expose your self to Garbage. Whichever you prefer, it is still more fun in the Philippines.

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ABS: Go Mandarin!

Something caught the Mokong's attention as he was watching an interview of ANC with Mr Mark Canizares (Head of Equities, Manulife Philippines). Near the end of the interview, Mr Canizares said something like <not his exact words>, "We are quite positive on the sectors that have bulk of their exposure in the domestic economy". With the global economy seemingly on the verge of another recession, his statement is very much logical. In addition, with the upcoming elections as catalyst for revenue growth, why not expose oneself to ABS? The Mokong observed that since last week, Mandarin has been accumulating large volumes of ABS. In fact, Mandarin was selling ABSP in exchange of ABS. Looking at its chart, ABS is already on the verge of a breakout.

Would Mandarin force this stock to higher levels? Or would the public take notice and participate? One thing is for sure: people get the government they deserve.

No to Political Dynasties!!! AHOOO!!! AHOOO!!!

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PSEI: GAP FILLED!

The week started with two days of blood letting as traders protected profits or opted to go liquid due to negative developments from abroad. First, it was Deutsche Bank going underweight with the Philippine Market. Then, the tag team of the Boston Bombing and China's lower than expected GDP growth wrecked havoc across the financial markets. The positive thing from this pandemonium is that one can filter strong stocks. Strong stocks are less likely to be affected by external news or should their price dip within the day, they always close near their previous day's price. Also, in a technical stand point, the Index filled its gap around the 6745 level, preparing it for another swing upwards. However, always remember that stocks don't appreciate in a straight line.

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Pong Pagong Portfolio Update

RCB: Which is Which?

It was nice to see RCB close above the Cup and Handle pattern last Friday. Will this be the end of its consolidation? However...

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...taking a closer look, an uptrend line may prevent any advances. Would you still consider it Bullish?

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DMC: Dividends Break Triangle

DMC's disclosure of cash dividends totaling to Php2.2/share, acted as a catalyst to end its one year slumber.  Breaking free from the descending triangle and with the help of "net foreign buying", resistances at Php 56, 58 and 60 per share were easily breached. Another positive disclosure would help DMC conquer 64, joining the upward movement of other Blue Chip stocks.

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PSEI - At Resistance!!!

Looking at last Friday's intra-day chart of the PSEI, it was surprising to observe last minute buyers contradicting the normal small sell-off during the closing minutes on a Friday. Sell-offs usually occur before long periods of market recess as short term traders close all their positions in order for them not to worry on any negative developments during market recess.

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The close of the PSEI at 6891.34, after bottoming out and completing the cup and handle pattern, propelled the index at resistance. Now, it has to break current prices to confirm the bullishness of the trend. Should it fail, it may revisit the gap at 6745.

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PSEI - Bottomed Out?

After the Investment Grade rating of Fitch, the Philippine Stock Index (PSEI) succumbed to profit taking. Coupled with negative news abroad (dismal US and Europe economic data, North Korea Tantrum, "Nomura" Banks All Mahal, etc) and shortened trading this week due to "Araw ng Kagitingan", the Index lost about 112.45 points (1.64%). Looking at its chart, the PSEI may have bottomed out. It is currently resting within the area of its short term horizontal support (6720) after creating a possible handle of a Cup and Handle (C&H) pattern.  Ideally, the Cup of the C&H pattern should have a more rounded bottom for the pattern to be valid. In this case, the Cup is more of a "V". Should the PSEI continue its downtrend, it will be creating a Double Top - a Bearish pattern. 

Even with all these negative developments abroad, the Mokong is still Bullish with our market - the first Investment Grade rating is merely the tip of the iceberg.

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Sentiment Analysis??? (Not!!!)

The Mokong finds it difficult to conduct Sentiment Analysis due to the fact that quantifying emotions is next to impossible. However, a possible way of guesstimating  the buying confidence of the majority, would be determining the stock picks of their brokers. The Mokong thinks that as more brokers tag a BUY advisory to a particular stock, the sentiment of that stock becomes more BULLISH. Using this concept in filtering which stocks to BUY, the Mokong arrived at the following results...

Before going further, take note that data was collected from the investment tables/guides for February 2013 of COL, ABCAP and ATR only. The Mokong has no knowledge on the credibility of these brokers. Only stocks having target prices from these three brokers were considered in computing for the column named "Average" (colored yellow). Also, closing prices of 27 March 2013 were used in the computation.

Top 10 Picks with Highest Possible Upside

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... Lopez' stocks (FPH, EDC, FGEN) dominated the top picks. However, please take caution, the BACMAN and LEYTE incidents may not have been factored-in yet. For the financial sector, MBT and SECB are the preferred banks. Finally, the ever favorite AC is still considered as the holding company with the most upside.

Special thanks to those who provided me with the investment guides of their brokers. May the force be with you.

Went All In!!! (Zero Cash)

It was a crazy ride last  Wednesday. Most were expecting a bullish day due to "window dressing", but lo and behold, an Investment Grade?! Folks in the PMT chat-room were in awe as the PSE index shot-up that afternoon. The Mokong's plan was not to BUY that day, but upon learning of the investment grade, the Mokong added positions in PF and PNX.

PSE Index (27Mar13 Intra-day Chart from Bloomberg.com)

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