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The Phisix daily chart
updated every Fridays, last update -
8/31/2010
DBP-Daiwa Spoils
the Party but Uptrend Still Intact

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 - 3530 |
Support - 3350 / 3500 |
| Resistance -
3640 to 3650 |
Resistance - 3750 |
| Trend -
Up |
Trend -
Up |
| Recommendation -
Buy as long as 3530 holds |
Recommendation -
Hold as long as 3425 holds |
The PSE failed to follow-thru on its
gains and has mysteriously dropped back down. Although the Dow was down
by 74 points, the drop wasn’t big enough to justify such a big decline
in the PSEi, especially given that our market has been relatively
stronger than the US markets. Furthermore, the 2nd quarter
GDP report for the Philippines came out a lot stronger than what
everyone was expected. So, what triggered the sell-off? A fund seems to
have decided to get out of market via DBP-Daiwa Securities. If I’m not
mistaken, DBP-Daiwa sold more than P300 million worth of stocks today.
That amount, which was almost 10% of the entire value turnover of the
whole market, was enough to rattle the whole PSE for one day. The
question now is, does he still have more shares to sell? Although this
fund liquidation may affect our market for a couple of days at worst, I
doubt if he can change the general trend of the market. Technically
speaking, the market is still very much trending up and today’s sell-off
may simply be a slight obstacle before the uptrend of the market
resumes. In the short-term, I would continue to stay bullish, that is,
as long as prices continue to hold above the 3530 level. Tsupiteros, who
currently have positions right now, are recommended to just hold and use
a break below the 3530 level as your mental stop. Those who would like
to buy may want to buy if prices break above the 3600 level.
Position-traders, on the other hand, are still recommended to just hold
and use a break below the 3500 level as your mental stop. By the way,
despite this fund liquidation of DBP-Daiwa, foreign funds were still net
buyers today by P386 million.
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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