Miko's Blog for Mar 2010

Just as I expected, the blues and the current high-flyers have started to correct today. Notice that, in spite of the market being down by 40 points, the third-line sector was relatively resilient as most were unchanged. In fact, some mining stocks have begun to move already. From the way I see it, the shift from the big caps to the speculative issues has begun.

TEL was the big drag in the market today as the company will shoulder part of the MER acquisition. At current levels though, I think the news is priced-in already. This stock will be the one to support the market by next week.

Happy "HULI" week! :-)

Mar 30, 2010

There was a P47 billion block sale in MER today, which, I would presume, is MVP exercising his option to buy MER from the Lopez group. That should probably cap the play on the Lopez stocks in the short-term.

Tomorrow is the end of the month as well as the end of the quarter. Could there be some window-dressing by tomorrow? After tomorrow, I would expect that the blues may take a rest for a while as they have climbed up quite a lot already. So, if the blues will end their run by tomorrow? Where will the money rotate? Obviously, the money will rotate to the second and third line issues that have yet to move, which is why I have begun to position in some of these "laggard" issues already in the last couple of days. Could it be time to look at JAP and Chucky once again? From the way I see it, I think it's time to buy and hold basuras! :-)

A survey came out from the SWS showing the Noynoy was once again leading Manny by 9 points. Chance to buy VLL/PO or chance to sell? It would be interesting to see what the results of Pulse Asia will show. :-)

Mar 29, 2010 (PM)

Sorry but I just can't help but write about the absurdity of the valuations on the Cebu Pacific IPO.

P/E ratio is 20x, which is way above the market's current P/E of about 13x.

Book value is a mere P10.00/share. So, at P95.00, you would be buying it at almost 10x its book value.

What could justify these extreme valuations? EPS growth has to be very, very big. Otherwise, I think these people are trying to pull a fast one on the public.

Mar 29, 2010

What do we do with this market? The strong stocks, which are way too high already, are still strong, yet, the weak stocks, which are the ones which are currently low, are still weak. Do we continue to chase the strong stocks, or, is it time to start shifting to the weak ones?

VLL failed to break above its major resistance at 2.16. Sorry, I said Manny Villar will only win if VLL breaks 2.16. So, for the meantime, I guess Noynoy still has the upper hand. :-)

TEL has been very, very weak recently but I think it may have "capitulated" already today.

I wonder what Chucky is up to right now. He seems to be very, very busy recently. :-)

Mar 27, 2010

I just read awhile ago details of the Cebu Pacific IPO. The company will be offering roughly 33% of the company to the public on April 19 to 26. This is a total of 235 million shares and will be offered at P95.00 per share. Of the 235 million shares, 70 million will be offered to the local market. That's roughly P6.7 billion that will be drained in the liquidity of the market. It's total outstanding shares after the offering will be 728 million shares. At P95.00 per share, this would be P69 billion company.

I haven't read the prospectus yet but for me to buy this issue, I would require its annual net income to be at least P5 billion. Book value should be at least P100 per share and I would need to see EPS growth of at least 10% per year. If it fails in any of those categories, I would avoid this IPO completely.

Take note, this is going to be a "very heavy" issue. If say, of the 235 million shares that are being offered, half decides to sell on the first day of the IPO, someone will need to be willing to shell out P11 billion just to buy all the shares being offered in the market. Why the hell would anyone spend so much money buying this issue on the listing date of the IPO when anyone can buy as much as you want on the offering period? The result - no one left would be willing to buy higher. In my opinion, buyers of this IPO will be very lucky if they would be able to sell it at P100.00.

Just looking at it at face-value, I doubt if I will subscribe to this IPO.

As I always tell my students in my seminars, IPOs are a means for the insiders to sell their positions to the public.

Mar 26, 2010

For a "bull-market", this market is acting kinda strange. The whole market is going up but the ascent is sort of like in a "slow drag". The patient buy and hold traders are making money, that is, if they are into the blues. The Tsupiteros, who are doing contra-trading, are also making money. The momentum traders are the ones getting killed. Those who are into speculative issues and are waiting are getting very frustrated already.

VLL was the darling of the market today as the stock closed the day at 2.16. Remember, if the stock closes the day above the 2.16 level, Villar will win the elections. :-)

Another high flyer today was APC as news came out that its proposed quasi-reorganization has been shelved. Now I understand why Wealth was a buying the stock when it was dropping a few days ago.

Mar 25, 2010

The PSEi is behaving very, very resiliently. Aside from Jakarta, we are now the strongest market in Asia.

How can one know if the market is in a bull market? You will know it when the market is trading at a high level but it doesn't want to drop. You want the market to drop so that you can buy but the market is not giving you an opportunity to buy low. You hardly have any positions because you sold early and you are fearful to chase prices because it might correct. In hindsight, the market has actually been in a bullish trend since it broke above the 2000 level last year but are we still in a bull market? Obviously, based on my definition above, we certainly are in one.

For the last few days, it was the blue chips that have been leading the rally. At some point, the blues will be too high and the second-liners will start to take their place. It is only after that phase when the speculative issues will begin to move. Thus, if you are a Tsupitero, you ought to be trading the blues or some second-line issues that are currently strong. If you are a Position-trader, I would suggest that you go into the speculative issues right now while they are still low.

Take note, a lot of people are probably waiting until after the Holy week before they commit themselves to the market. Thus, if this is our line of thought, the bulls will simply have to survive the next four trading days and it will be full speed ahead (I hope!). :-)

Mar 24, 2010

The PSEi registered a new 52-week high today but how come not everybody is happy? My guess is, a lot got left out of the move and have sold early, or, have just recently bought back higher and their positions aren't moving. The institutions are very happy because the blues are the ones moving strongly right now. The Tsupiteros, on the other hand, are a bit disappointed because the 3rd-liners have yet to join the party.

I'm quite happy today though cause my three recommendations in my newsletter yesterday, AEV, EEI and RLC, were all very strong today. Congratulations to all who made money in these issues!

Mar 23, 2010

I have to admit, I have under-estimated the bulls. I am quite amazed at how resilient this markets are, especially the US markets. Obviously, the PSEi will make a new high maybe as early as tomorrow.

A good friend of mine in the office, who hasn't been performing very well recently, finally learned one of the cardinal rules of successful trading/investing - LET YOUR PROFITS RUN - as he was able to successfully hold on to his position in PO. Congratulations my friend!

Someone is giving away free money in WEB. HDI is very grateful. :-)

One of the top gainers of the day was the very controversial APC. So, does this mean that the fears on the quasi-reorganization is false? Incidentally, the stock appears to have been able to hold above its major support at 0.48. I can't wait to see what happens next (Haha).

Mar 22, 2010

Did the Dow already form a peak last Friday at 10869? Maybe or maybe not but I'm quite sure we are not very far from it, if ever it continues to trend up. Same goes with our market. I sold all my remaining positions in the market today and I'll probably lay low until after holy week.

There's a big debate right now on whether the recent disclosure on APC is bearish or not. From the way I understood it, it would seem to me like the disclosure is very, very bearish as the company will be wiping out its negative retained earnings by diluting existing shareholders by 99%. However, if it's really as bearish as I think it is, why are there still people buying it at current levels? I'm not an accountant so I'm not so sure what the effect of this will be to existing shareholders. For now, I guess the panic is stemming from the uncertainties of the market in the stock. I think the PSE will need to compel the company to explain this further to the public in order to pacify everyone who still has this stock.

There are two other stocks that have announced that they too are under-going quasi-reorganization - AJO and MRC. Will they suffer the same fate as APC?

Below is a picture of the attendees of my current Technical Analysis Seminar. Congratulations to all those who attended. You are now one step closer to finding the Holy Grail. :-)

Mar 19, 2010

Tough, tough trading environment right now. What do we do with a market that is high but doesn't want to drop?

APC collapsed today with the market realizing that the quasi-reorganization was actually bearish. I learned something new in Chinese today. "Qua" means "Hanging". "si" means "Shit". :-)

I've been wondering what those people are doing with CPM. You see the same big buyers everyday and the same big sellers everyday and its price hardly moves. So, are the insiders "net buying" or are they "net selling". A friend of mine in the office, "scavenger", told me that they are "net doing anything". Haha

Mar 18, 2010

I wonder what's up SUN and RFM. Eastern Securities seems to be very bullish on these stocks.

News came out that the Board of APC has approved a quasi-reorganization by reducing its par from P1.00 to P0.01 per share. The market reacted today as if the news was bearish but is it really bearish?

A lot of people were probably expecting Chucky to bid up ABA again today. What did he do? He hit up LIHC instead (haha). Saludo ako sa'yo Sir! :-)

PCOR was the WOW for today! Obviously, something is brewing here.

There was some activity on NI today. If I'm not mistaken, there were 9 million shares that were crossed. Could this be bullish or could this be another one of those fake breakouts? I sold all my NI today just to be on the safe side. Thank you JAP! Muah!!!

I'm confused about the market right now. It's quite high already but it doesn't want to drop. I guess as long as we don't see any collapse, there will be specific plays here and there. Remember, sideways market is basura market. Sell Blue Chips and buy Basura! :-)

Mar 17, 2010

There was news that GEM Fund was going into MRC but, after what happened to ANI, CPM and PEP, who are they kidding?!

Chucky is enjoying himself right now in ABA as the whole market is trying to figure out what he is going to do next. The worst stock that you can buy is a stock wherein it is controlled by just one person.

I wonder what's gotten into JAP. Recently, he's been "churning" all his stocks. Could he have taken lessons from Chucky? I really miss the old JAP (hayyy).

From the way the market behaved today, it would seem to me that this bull is now very tired. I think it needs to take a nap first for now.

Mar 16, 2010

What a boring today!

AB continued to plunge today. To my surprise, someone from Tower was brave enough to buy 47k shares at around 50.00. I wish him all the luck! :-)

The "Chucky Index" is on a downtrend. Is he trying to catch the buyers or the sellers? Be careful Tsupiteros.

At the moment, I see one risk that could derail this bull market - China. Notice that its chart is very weak relative to the rest of the world. China is reported to be overheating already and may raise rates this week. A slowdown in China will definitely not bode well for this so-called recovery of the world economies.

Mar 15, 2010

Thank you Mr. Black Samurai! Muah!

I'd like to congratulate Mr. Pacquiao for his lopsided win again yesterday but was that enough to trigger the bulls? Based on what I saw from the market today, I'm no longer "nervously bullish", I'm just nervous.

Ariel Pineda gave a stunning performance on his rendition of the Philippine National Anthem yesterday but, frankly speaking, I enjoyed much more those that sang the Star Spangaled banner. :-)

AEV and AP are now doing a MER. From the way I see it, those stocks are now trading at 275.00 right now. Be careful Tsupiteros!

Mar 12, 2010

I have a new hero in the market - The Black Samurai!!!

The market was down by 52 points today but mostly due to the P140.00 cash dividend of TEL, which went ex-cash today. If TEL didn't adjust, the market would have just gone down by 18 points.

This weekend will be very critical for the markets, not only because of the Retail Sales data in the US tonight, but also because its Pacquiao weekend once again. The bulls will certainly need Pacquiao to win for this bull market to continue.

Mar 11, 2010

How can I describe today's market? - Yawn! The markets are obviously awaiting the Retail Sales data in the US on Friday night. Place your bets!!!

I'd like to say thanks to the best trader in HDI and my good friend, Mike Chua, for treating all of us in HDI to lunch today. He made a killing in GEO and DMC.

Incidentally, I have been recommending DMC in my newsletter for the last couple of days now. Congratulations to all that made money in this one. As to my two other recommendations, I expect the entire market to shift to that sector that I am recommending once the Power Play ends.

Mar 10, 2010

The Power plays continued to be powerful today. Can they make it for third day in a row by tomorrow?

JAP has been very quiet for the last couple of days, then, from out of the blue, while nobody was looking, he brought back to life his former love, GEO.

Incidentally, I'd like to welcome Globalinks (broker 168) to the wonderful world of the Tsupiteros!

Chucky, on the other hand, is back to his old antics, this time in ATN.

VLL was quite strong today as news came out that Noynoy and Manny were once again in a statistical tie. Remember, the level to watch out for is the 2.16 level. VLL must convincingly break above 2.16 to confirm that Manny will win the elections.

Foreign funds have been net buyers in our market by roughly P500 million everyday for the last three days but a friend of mine who asked me this morning what I thought about the markets - I told him that I was "Nervously Bullish" (hahaha).

I have been hearing stories recently that a group of people has been hyping some stocks thru text messages and/or instant messages. Obviously, these people have big positions in the stocks that they are promoting, otherwise, why would they go thru all the effort? Be careful Tsupiteros. BUYERS BEWARE!

Mar 9, 2010

I had a pretty bizarre experience in the market today with AB. I bought some shares near the opening cause I figured that yesterday may have already been a capitulation day. I was holding quite a sizeable position for such an illiquid stock so I sold half of what I bought earlier in the day at 77.00. All of a sudden, the insider padded the sellers' side and was forcing me to sell my remaining position. He was so intent of shaking me out that he even went as far as making the price drop to as low as 65.00. I eventually gave way and just sold my remaining position near the close. I figured that, if I didn't sell, he may even drop the price lower by tomorrow just to force me to sell. Why was he shaking me out? Because he doesn't like Tsupiteros like me in his stock. All in all, I lost 3.50 per share in that trade of mine but it's a good thing that I only used a mere 5% of my portfolio in that trade. Am I just being paranoid? Maybe. What's the moral of the story? AB-oid these kinds of stocks? I have absolutely no regrets with that trade of mine because I know that the stock would have gone up already had he not needed to shake me out.

The market is now back to "Power Plays" but, this time, it is no longer just the small caps that are moving.

I heard this morning that MEG may have already won the Jusmag contract but why was the stock weak? It's called "sell on the news".

Mar 8, 2010

Allow me to quote one of the guys in the local stock market forums describing how he felt about this market. He told me that he was "Ignorantly Optimistic". (haha)

MRC was one of top gainers of the day today. Shouldn't it be the acquiree (LIHC) that should fly and not the acquirer (MRC)?

By the way, one of the true geniuses in the markets, Mr. Ed Seykota, is now also a singer and a composer. Watch this and enjoy!

http://www.youtube.com/watch?v=LiE1VgWdcQM&feature=player_embedded

Mar 5, 2010

Trading in the PSE was delayed by one a half hour today. That new trading system really needs to get started very soon or it might add to our risk in the market one of these days.

All of a sudden, the Black Samurai is nowhere to be found. Hmmm, sneaky!

Now I know why the property stocks were very strong yesterday - Jusmag.

Triton Securities bought back all the IMI shares that he sold yesterday. I'm watching you boy! hehehe

Not to be outdone by IMI, EG too started to climb up today. Is that JAP bidding up the shares? By the way, with regards to JAP stocks, I think ACR is bottoming out already and ORE has already reached a peak.

I read a disclosure yesterday that MRC is currently eyeing a stake in LIHC. Oh my God, the anti-Christ is about to be born!!!

Mar 4, 2010

Did the trio (BEL, APC and SINO) peak today, or, is this correction an opportunity to buy?

For the last few weeks, I've noticed Triton Securities accumulating IMI since 30.00. Today, he almost gave up as he sold a lot near the lows. Moral of the story - don't fight the owner. If I were Triton, I'd ask for a refund from the PSE for allowing IMI to create this madness. By the way, IMI could probably have bottomed-out already today. PD - I don't have IMI.

I have a buy signal on the property sector today. Take your pick - AGI, MEG, FLI, RLC or SMDC.

Mar 3, 2010

Something is definitely going on with the trio - BEL, APC and SINO. The huge cross transactions in BEL in the last couple of days is Henry Sy buying and a foreign fund selling. From the way BEL behaved today, the crosses appear to be over and done with already. Off to the moon?!

I heard from the grapevine that the seller in LND is not the same as the buyer.... and the winner is Abacus!

There was some activity in NI today. It looked like it was "good to go" already. Unfortunately, NI just isn't the same NI anymore as before. Maybe the rights have made the stock heavier.

Mar 2, 2010

After what happened today, I think the 3rd liners will take a nap first for now. If you'll noticed, a lot of top gainers yesterday were the top losers today. Madaming madadala.

In terms of volume, the biggest loser of the day was LND, which, incidentally, was actually the top gainer yesterday. I really wonder if that guy from Globalinks was able to get out today. Could he be the same guy as the one who was selling in Abacus? We'll never know.

The PSEi looks like will pause for the meantime. Let's hope it's just going to be a pause (haha).

Mar 1, 2010

Today's theme was obviously property with LND leading the way.

APC was still relatively strong but no longer as strong as last Thursday and Friday. This one may be getting tired already. With Power now in play, you will notice that there will now be some stocks, which will suddenly announce that they too will go into Power. It's the same thing as during the mining boom, everyone wanted to go to mining. But, of course, in the end, only the real ones will survive.

I feel really bad for those affected by the earthquake in Chile. Please include them in your prayers. By the way, which country again is the biggest producer of copper in the world?

Heard from the grapevine that Lucio Tan has already divested his stake in Fortune Tobacco to Philip Morris. I wonder where he will invest in next? If you think he'll concentrate on property, buy ETON. If mining, buy MAC. If bank, buy PNB. If Power, buy MRC. If Airline, buy PAL. Place your bets!!!

From the looks of it, the market will likely retest its 52-week high at 3133. Take note, the Dow hasn't even gone up yet. Can you imagine what the PSEi would be like tomorrow if the Dow is able to climb up strongly tonight?!