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The Tsupitero Index

As of the close last Friday, 11/10/2008

charts are courtesy of Metastock

Legend: blue lines - range for Tsupiteros

            dotted blue lines - range for Position Traders

            red lines - important trend lines

The The Tsupitero Index is an equally-weighted stock index composed of 25 of the most active and volatile stocks in the Philippine Stock Exchange from Jan 1, 2008 to June 30, 2008. Stocks included in this index have an average value turnover of at least P3,000,000.00 and an average true range of at least 3.0%. Blue chips were intentionally not included in the index.

The stocks included in this index are the following: 

The Tsupitero Index is calculated in the following manner. First, average all the prices. Next, add all of the ratios together. Then, divide the day's open, high, low and closing prices by the previous day's close. Finally, the ratio is multiplied by 100 to convert the ratio into a percentage value. The result is the exact percentage gain year-to-date had a Tsupitero invested an equal peso amount on the 25 stocks listed above.

The purpose of The Tsupitero Index is brought about by the need to form an index that is representative of stocks that Tsupiteros usually trade. The composition of the index is ideal for Tsupiteros using Technical Analysis in their trading because the stocks included in the index are the most liquid and the most volatile. Technical Analysis works best on stocks that are very active, while the most astute Tsupiteros would only trade the most volatile stocks to maximize their returns. Blue chips were intentionally not included in the index because: (1) the present indices of the PSE already tracks their performances; (2) due to the fact that the present indices of the PSE are market-capitalization weighted, the Blue chips constitute a huge majority of the movements, that it almost totally ignores the movements of other stocks in the PSE; and, (3) Tsupiteros usually do not trade the Blue chips since they are not as volatile. Finally, an added purpose of the index is to present a typical year-to-date performance of a Tsupitero in the PSE. Tsupiteros may also use this index as a gauge of whether their returns are above or below par.