Chart of the Week - Mar 31, 2008
First Gen Corporation (FGEN)
FGEN Weekly Chart -
Rallying Strongly but Still Trending
charts are courtesy of Metastock
Daily Chart -
Rallying Strongly but Approaching Resistances Above
charts are courtesy of Metastock
blue lines - range for Tsupiteros
dotted blue lines
- range for Position Traders
red lines - important trend lines
|Support - 36.50
||Support - 29.00
39.50 / 43.00
Resistance - 41.00 / 46.00
|Trend - Up
||Trend - Down
Corporation (FGEN) as well as its holding company, First Philippine
Holdings Corporation (FPH), were definitely the highlight of the market
this week as FGEN was able to rebound by more than 36% from its trough
while FPH was able to rebound by more than 33% from its trough. There is
no particular reason why prices have gone so much in such a short period
of time, except that prices have already been battered quite excessively
already in the last couple of months that prices are merely rebounding
back up to their means. I've decided to do an analysis of FGEN for
For the last
few months, the stock has been sold down aggressively because primarily
of two reasons: the company is earning in Dollars so the strong Peso has
been decreasing its bottom-line; and, the negative perception of the
market with regards to its expensive acquisition of PNOC Energy Dev.
Corp. However, at current prices, these bad news may already have been
priced in into the market.
chart of FGEN above shows that the stock has formed a very long white
candle this week. Obviously, this is bullish for the stock in the
short-term and confirms that prices have already formed a trough at the
29.00 level. The fact that prices closed the week at its highs,
indicates that the stock may continue to head higher this coming week.
However, despite the strong movement of this stock this week, it is
still trending down in the medium-term. In order to reverse the trend of
the stock in the medium-term to up, prices must first take out 46.00 to
the upside. If the stock continues to hold below the 46.00 level in this
run, I would presume that the stock will simply consolidate between its
previous low of 29.00 and that resistance at 46.00.
short-term, you can see that there are quite a number of resistance
levels that the stock will first need to take out first before it is
able to break thru that major resistance at 46.00. There are resistances
at around the 43.00 level and even at the 39.50 to 40.00 level, which it
has yet to take out. Although, of course, with the stock already
climbing for the last five consecutive days in a row now, the stock may
already be vulnerable to profit-taking as well.
who currently have positions in this stock, are recommended to just hold
and use a break below 36.50 as your mental stop. A break below the 36.50
level may indicate that prices will be dropping back down towards its
previous low at 29.00. If the stock goes straight up towards 46.00, I
would suggest to take some money off the table already. I would no
longer recommend Tsupiteros to buy this stock at this point, unless, of
course, it drops back down near its previous low of 29.00.
Position-traders, on the other hand, are still recommended to just avoid
this stock for now since its medium-term trend is still down.
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.