COL Financial - Tech Spotlight March 8 2016

8/19/2019 COL Financial - Tech Spotlight March 8 2016

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Authored by:

Juanis G. Barredo

VP; Chief Technical Analyst

COL Financial Group Inc.

[email protected]

Philippine Equity Research

Mar 8, 2016

Disclaimer: All opinions and estimates constitute the judgment of COL’s Equity Research Dept as of the

date of the report and are subject to change without notice. The report is for informational purposes onlyand is not intended as an offer or solicitation for purchase or sale of a security.

DAY’S HIGLIGHTS

• US markets were mixed; Europe was mostly lower

• Asia was mixed

• The Dollar lower again prodding Gold up 0.6% and Oil up 4.5%

•

The Philippines’ PSEi eased down 6-pts showing its second dayof a reaction; PLDT (US) drops 3.6%

Trend Watcher: Consolidations

Notes: Choppy action near resistance as rotation ensues

US markets were mixed yesterday with Europe showing more of

reactions. Asian markets were also mixed and may continue to

show some volatility given that prices have recently showed

moderately high rebounds. The Philippine index slid slightly butmay have to deal with rotation taking money away from mainline

stocks as some 2nd and 3rd liners take into action. This may drive

consolidation shifts or some reactions into primary issues while

traders become more attentive to fast movers. Unfortunately this

moves money away from good quality issues and into inferior

ones which could provide for a markets reaction. Some action

into commodity related stocks were also triggered by the recent

rebound in metals and oil. These commodities are showing a

major rally and could be passing, as they have yet to pin down

viable long term reversal conditions (see page 2-3).

Focus ItemsIssue Highlight Page

Metals Move Rally or Reversal? 2-3

DOW Range trade - hold 4

PSEi Range trade – watch resistance 5MSCI Phils ‘EPHE’ Range trade – watch resistance 6

PHI Sell into rallies 7Issue Previous Current Change % YTD %

Philippines 6,899 6,893 (6.38) (0.09) (0.85)

Peso-$ 47.08 46.91 (0.170) (0.36) 4.90

MSCI Phils 34.32 33.97 (0.35) (1.02) 0.68

PLDT US 37.91 36.52 (1.390) (3.67) (14.57)

DJIA 17,007 17,074 67.18 0.40 (2.01)

SP500 2,000 2,002 1.77 0.09 (2.06)

Nasdaq 4,717 4,708 (8.77) (0.19) (5.97)

England 6,199 6,182 (17.03) (0.27) (0.96)

Nikkei 17,015 16,911 (103.46) (0.61) (11.15)

Hong Kong 20,177 20,160 (16.98) (0.08) (8.01)

China 2,874 2,897 23.19 0.81 (18.14)

US 30yr Bond 162.64 162.57 (0.07) (0.04) 6.41

10-Yr Yield 18.83 19.02 0.190 1.01 (16.17)

Dollar Indx 97.34 97.08 (0.26) (0.27) (1.69)

Gold 1,260.10 1,268.00 7.90 0.63 19.57Oil 36.33 37.98 1.65 4.54 2.45

GTX 2,090.50 2,146.48 55.98 2.68 (1.11)

mailto:[email protected]

mailto:[email protected]



Metals Move: Rally or Reversal?Tech Spotlight --- Page 2

I say major RALLY … into a wide consolidation

• Yesterday the Iron Ore market exploded with upward

force driving its spot price benchmark up by $9.99, or

18.6% to $63.74 a tonne. This was the priciest value seen

in Iron Ore since June of 2015

• And moving along with other metals that have shown

recent rallies as well, many begin to ask whether a new

commodity cycle has begun and has its down trend

reversed or is this just a temporary rally?

• Metals, particularly industrial metals along with Iron ore,

are normally viewed as benchmarks for economic demandas the price for these commodities rise along with

economic vibrancy and fall from the opposite

• Well my view leans towards a rally… but a BIG ONE as

prices have come from very oversold levels whose distance

to its major down trendline remains far and wide; this now

needs to normalize its down angle (as seen from Graph 1)

by fixing such extreme spreads to its supply line

• The recent rebound in Iron Ore could be superficially

induced as major iron producers in China are speculatedto cut back on production (by half) during a special

international horticultural exposition from April 29 through

to October 16 this year as the govt moves to reduce air

pollution; this activity was also seen last year when the

govt force iron millers to limit production ahead of a

military parade event between July and August last year

(forcing Iron prices to climb by about 32%)

• So a good possibility that prices are staging a major

rebound is in session and that no clear reversal promptshave been shown as of yet to effect a major metal reversal

Source:Business Insider

Graph 1

Graph 2

+32%





US: Dow JonesTech Spotlight --- Page 4

Recommendation: Range trade – hold

Support: 16,443 – 16,281 Resistance: 16,906-17,375• The Dow Jones climbed 67-pts and proceeds with its

recovery swing

• This offers a Hold over its earlier range trade as it now

moves to seek next resistance (R1) and eventually look to

challenge next resistance zone (R2)

• Continue to expect some choppiness along the rally swing

but as its MACD stays open and climbing, it merits the Holdaction

• The option to hold is maintained so long as its protective

stop at the 16-day (16,600) or 32-day (16,353) MAs is not

violated



Philippines: PSEi Recommendation: Range trade – watch resistance

Support: 6,700 – 6,650 Resistance: 7,084 / 7,300-7,400• The PSEi was down 6-pts feeling some resistance at the

high end of its assumed channel range

• It maintains its recovery swing as higher-lows and higher-

highs still form and offers to raise short term support to its

recent range low of 6,700-6,650 (presenting a decent area

to host short term stops for range trades)

•

The index however still shows an MACD lapse (despite aslight pickup) and still merits some caution –thus the rally

should be followed with careful scrutiny and support stop

protection

• Given that 6,900 has been breached we raise next

resistance targets to the earlier highs zones of 7,084 then

its 260-day MA range of 7,300-7,400

•

A short term range trade of its channel is maintained asthe rally has not yet terminated

Tech Spotlight --- Page 5



US iShares MSCI Philippines: EPHERecommendation: Range trade – watch resistance

Support: 33.00- 33.21 Resistance: 34.65-34.95• EPHE lost $0.35 as it felt some pressure from its channel

highs

• A recent breach of its down trendline weaved its medium

term trend sideways but so far maintains its short term

recovery (which is closer to its high sides as of the

moment)

•

Resistance is estimated next to be closer to $34.65-$34.95;after this next resistance stands at its 260-day MA ($36.64)

• MACD readings have improved but still shows a wary stand

given a near cross down (kiss) event… these normally just

delay the reaction for a short while

• A range trade of its rallying channel stands, but a careful

trade would be suggested due to its momentum lapse –

place a tight stop at its lower band support low of $33 or

by following its 16-day Mov Ave ($33.21)




PLDT-US (PHI)Recommendation: Sell into rallies

Support: 34.35 - 29.45 Resistance: 40.00 - 43.81• PLDT-US lost traction after turning over a 2-day rebound

into a fresh decline

• The break below $46 triggered a sell but offered one into

any rally given its hefty fall (due to oversold levels)

• The issue has now backed off to levels that was last seen in

2011 – whose low was at $34.35 and could be the next

support to watch for if its recent low at $36 does not hold• A retest of its $36.00 low will now unfold

• Price parity of PHI to TEL stands at ($36.52*46.91= P1,713)


Documents

COL Financial - Tech Spotlight March 8 2016