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Chart of the Week - April 6, 2009
Alliance Global Group, Inc. (AGI)
AGI Monthly Chart
- Trying to Rally off its Trough at 1.24
charts are courtesy of Metastock
AGI
Weekly Chart - Approaching its Resistance
at 1.70 but...j,
charts are courtesy of Metastock
AGI Daily Chart -
Trending Up Strongly in the Short-term
charts are courtesy of Metastock
Legend:
blue lines - range for Tsupiteros
dotted blue lines
- range for Position Traders
red lines - important trend lines
| Short-term Traders/Tsupiteros: |
Medium-term/Position Traders: |
| Support - 1.48 /
1.56 |
Support - 1.24 |
| Resistance -
1.82 |
Resistance - 1.70 / 2.00 |
| Trend - Up |
Trend - Sideways
to Down |
Alliance
Global Group, Inc. (AGI) has been one of the favorite of Tsupiteros
recently, especially since prices have become very strong in the last
two weeks. The stock has been a laggard prior from two weeks ago. One of
the reasons why it has been a laggard is because the company stated that
it will buy all of the rights that its subsidiary, MEG, will be offering
at P1.00 per share if no one buys it. Since MEG is currently trading at
P0.60 per share, AGI will book a substantial loss if it does so.
Recently though, I guess, with the whole market becoming strong, AGI has
been playing catch up with the rest of the market. Let's study the
technical picture of AGI.
From a
monthly perspective, you can see how strong its downtrend were in the
last few months. From its high of 7.30 last March 2007, prices have gone
down to as low as 1.24 last month or an 83% decline just in the last two
years. However, recently, in the last couple of months, you will notice
that, although the stock still continues to form new lows, it no longer
is trending down strong. In fact, there is a possibility that the stock
may actually be trading within a bullish ending diagonal pattern. If so,
I wouldn't be surprised to see AGI trade up to as high as 2.00 in the
next couple of months time. For this time-frame though, the resistance
of the stock is actually at the 3.00 to 3.50 level. However, unless the
stock is able to convincingly breakout above that 2.00 level, I just
won't expect it to climb up that high for now.
From a
medium-term perspective or from a weekly chart perspective, you can see
that the stock is actually trading within a sideways to downtrend trend,
with its support currently pegged at the 1.24 level and its resistance
currently pegged at the 1.70 level. The big question in this time-frame
is, will that resistance at 1.70 break? If the whole market continues to
be strong, then, there will probably be a possibility for the stock to
break above that 1.70 level and head back up towards its psychological
resistance at 2.00. The 2.00 level represents the real strong resistance
in this time-frame. Unless it is able to break above that level, I would
expect AGI to merely trade sideways for now, at best.
The
short-term trend is where the action is right now in this stock. You can
see in the daily chart of AGI above that prices are currently trading
within a very strong uptrend. It's behavior last Friday may actually
indicate that the stock has already formed a trough at the 1.48 level
and may now head towards its next resistance at 1.82.
How do we
trade this stock? For Tsupiteros, who would like to buy this stock, I
would suggest to buy it as close to the 1.56 level as possible, with
stops placed on the break below the same level. For those who are
already holding this stock, you may just want to hold and use a break
below the 1.56 level. Would it be prudent to take profits as close to
1.82 level as possible? To each his own. Those who would like to pick
highs may want to take profits as close to that level as possible.
However, those who would just like to ride the trend, may just continue
to hold and just adjust your stops as prices go up. For
Position-traders, on the other hand, I would say that it is a little bit
too early to look at this stock for now. To be bullish on the
medium-term in this stock, I would need to see some evidences that
prices will start to trend up from here. For now, I would interpret the
stock as merely rebounding off its lows. It is still trending down in
the medium and in the long-term. Thus, I wouldn't recommend positioning
in this stock yet for now. What about for those who already have a
position in this stock? I would sell as close to 2.00 as possible if I
were you.
Notes:
Short-term
Traders/Tsupiteros vs. Medium-term/Position Traders: Recommendation
for short-term traders or Tsupiteros are meant to be used by traders
whose holding period are limited to one day to two weeks. Medium-term or position
traders are meant to be used by traders whose holding period are two weeks
to three months. Long-term investors whose holding period is more than
three months should not follow these recommendations.
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