Sleeper Play: East West Bank (EW)

I'm happy to report that FLI is now at 1.69. I'm not too happy about the steep incline and would have preferred it rise gradually. Steep inclines usually means quick exhaustion. You can use EMA 10/20 along with Parabolic SAR and Stochastics to Monitor price movement and lock in profits when you can. Or you can lock in profit already and then buy back after reversal has exhausted.
(click on the photo to enlarge)



I was about to suggest 2GO as our next sleeper play, however it has already surged up. Check the picture below. (click on the photo to enlarge)


Now, let's focus on East West Bank (EW), FLI's banking arm.
Here are the fundamentals as of Sep. 30, 2015 (3Q 2015). They have yet to release their 2015 annual report.


Although net income has slightly declined, the stock is trading near its all-time low. See the monthly chart below. (click on the photo to enlarge)


Below is EW's daily chart. (click on photo to enlarge)


You can do a test buy for now, and add more when price action breaches 61.8% fib level (or 15.79) ala Nicholas Darvas style.

Please note that the company has yet to release its 4th quarter earnings result. Lower earnings might bring the stock lower. Also, the company's Chairman Emeritus, Mr. Andrew L. Gotianun, Sr., recently passed away (rest in peace)...so it might be wise to wait until Tuesday to see how this affects the stock price before doing a spot entry.

Stop loss is set at 15.02. If price action violates this level, then SELL IT IMMEDIATELY.

Caveat and God bless!

FLI: sleeper play update 2 - Breakout!!! Now at 1.63!!!

Our patience is beginning to pay off. We first began our vigil on FLI with this first post on Feb. 18, 2016: FLI: sleeper?

Below is the screen shot when I initiated my buy. (click photo to enlarge)

Here is the next photo from the last update on Feb. 24, 2016: FLI: sleeper update
(click on the photo to enlarge)

And here we are today. (click on the photo to enlarge)

If you didn't listen to my warnings and bought anyway, then congratulations! Hehe!

I usually use EMA 15/30 or EMA 10/20, depending on the stock. Each stock is unique so there isn't a once size that fits all of them.

I also put heavier reliance on RSI versus stochastics due to preference. RSI tends to be more accurate or clear for me when divergences occur.

What now? Monitor the EMAs. If the slower EMA begins to cross over or is crossing over the faster EMA, then sell. Simple as that. If the stock continues to go up, then you might consider adding a few more shares especially if it breaches the 38.2% fibonacci level with strength and volume.

Since this has already broken out, I am now looking for the next "sleeper play".

2GO looks promising.

Caveat and God bless!

EDC, FGEN, and PCOR charts as requested as of March 6, 2016

EDC chart (click photo to enlarge).
please note that color of the text bubbles do not matter. Just forgot to edit the color.

Good time to enter EDC. Ride the wave while the following holds true:

• Shorter EMA line is above Slower EMA line (I use 13 EMA and 48.5 EMA).
• Parabolic SAR is below price movement. 
• RSI and A/D line does not show bearish divergence 

FGEN Chart (click photo to enlarge).

Wait until Shorter EMA crosses over longer EMA to be safe, and ride the wave until price violates Parabolic SAR.

PCOR Chart (click photo to enlarge).

Do not chase the price.

Caveat!

Selecting stocks to Scan: Where to Begin?

One of the more challenging tasks I encountered when I focused more with Technical Analysis was where to begin my scan selections. By the way, if you're looking to learn the basics of Technical Analysis, check out Ms. Guillen Rocher's blog. Her posts about candlesticks, Stochastics, Support and Resistance, and Moving Averages are great! Check them out.

To date, the PSE has 314 stocks to invest in, give or take a few preferred shares. Doing scans over the weekend is fine, however it cuts into my family and relaxation time (I've yet to watch Deadpool so no spoilers please). Also, what about doing scans mid-week such as Wednesday? I have a day job, so I do not have the time to be scanning all 300 stocks listed!

What do we do? We follow the volume. We look at the most actively traded stocks, or those stocks that have significant amount of volume. I use COLFinancial and Utrade as my online brokers, so I can point where you can get this information if you're also using those brokers. If you're using others, explore the website abit. Each broker typically offers this information.

For COLFinancial, you go to Quotes, then Market Information, then Most Active. I marked them with an orange arrow as 1, 2 , 3 respectively. Please refer to the picture below (click on the photo to enlarge).


For UTrade users, click Quotes, then in the drop-down list, click Most Active.
(click on the photo to enlarge)



Once you have this page open, check the column labeled as Volume. This is the number of shares traded throughout the day. In this case,traded on Feb. 26, 2016. You will want to focus on stocks that have had 1 million traded volume or more.

Based on the above information, we take a quick peek at MPI and see if a trading setup is present.


If a setup is present, note it down for further study later then move on to the next stock on the Most Active list meeting our volume criteria.

Another useful area is the Gainers and Losers tab in COLFinancial. (click on the photo to enlarge)


This tab shows a list of stocks that have had the most significant increase or decrease to their prices on a previous trading day (or during the day itself).

For UTrade users, it is still under the Quotes tab, and right under the Most Active line. I encircled it in orange below. (click on the photo to enlarge).


Instead of Volume, we base our selections on the Value column. The numbers under value are derived by multiplying the total number of shares traded, at the price traded, and getting the sum of those prices (tama ba? hehe).

During a trading day, I often have Gainers and Losers and the Most Active tabs open at a new window or in a new tab (alt + tab is your friend) so I can quickly cycle through my web browsers. This is so I can quickly see if a stock is rising during the trading day, and if a breakout should occur, I can quickly enter when it breaks a resistance line....but thats for another article.

So, when I come home from work, this is how I do my scans. Hope this article will help reduce your scanning time and God bless your investments!

PCOR Analysis with Elliott Wave

I am still continuing with my Charts and Technical Analysis (TA) self-study, and after reading Ms. Guillen Rocher's post about FNI, I wanted to try my hand using Elliot Wave.

You can read Ms. Rocher's post about FNI here: The Story of FNI-ipit (Simple Thesis)

From what I've read in stockcharts.com, the basic Elliott Wave sequence consists of Waves 1, 2, 3, 4, 5, A, B, C. You can read up on it here: Elliott Wave - Stockharts.com

Let's take a look at PCOR's chart. I tried doing the count with the daily time frame but wasn't successful. I switched it to weekly time frame and I think I have the sequence plotted. FYI, Although I have heard of the Elliott Wave pattern before, I never really bothered to use it in my chart analysis until now, so please bear with me. This is not a recommendation to buy or sell PCOR. This is to record my continued studies in using TA when analyzing charts.

Below is a screenshot of the PCOR chart back in late 2001. The waves are marked with text bubbles. (click on the photo to enlarge)



Based on the Guidelines shown in Stockcharts.com, one of the guideline states:

Guideline 2: The forms for Wave 2 and Wave 4 will alternate. If Wave 2 is a sharp correction, Wave 4 will be a flat correction. If Wave 2 is flat, Wave 4 will be sharp.

Also, after viewing some videos at youtube, I found this video particularly helpful: Simplied Approach to Elliott Wave Analysis, I learned that wave 2 usually retraces to 61.8% fibonacci from wave 1. If you look at the picture above, it does indeed touch the 61.8% line. This encouraged me that my count was at the correct area.

Let's continue the count. (click on the photo to enlarge)


Now this is where it gets tricky...I am not confident with my Wave A-B-C pattern. If you look right after the high of wave 5, there is a small rally and I do not know if the count should've begun right after 5, or if I should begin after the rally failed.

The picture below zooms in on the wave C area. (click on the photo to enlarge)



Assuming that the count is correct (yes...it is an assumption so please do not buy PCOR based on this article!), The recent rally ought to be Wave 1. Latest candle shows that the bulls are losing strength, and price should retrace back to 61.8% fibonacci area. The green arrow shows the possible bounce, purple arrow shows the possible breakdown.

Below is a picture of the support areas shown in green-dashed lines. (click on the photo to enlarge)


RSI is currently above 50 but is turning downward. Volume is also declining.

Now all we have to do is sit, wait, and observe what will happen next. If price does indeed bounce off the 61.8% fib retracement, then wave 2 will have been completed and the next one is the big wave 3.

Feel free to comment below. I didn't know that I had it disabled until now.

Caveat!

FLI - sleeper update

Here's the link to the previous article: FLI - sleeper?

Although FLI went down since Monday, it has found momentary support at P1.50 and has not negated the ascending triangle pattern.

I still have my stop loss set at 1.48. RSI 30 still shows a steady increase while Stochastics 14 showed a decline after reaching overbought area.



This play is experimental and I am not encouraging you to try it.

Caveat!

Stock in Focus: FLI - sleeper?

As coined by ZeeFreaks from his blog: Sleeper Plays 101. I would also recommend you read his article about bottom fishing.

I have always wanted to be a pseudo-position trader because I cannot check charts and prices due to my job. After reading this article, it got me to thinking and wanting to try my hand in spotting sleeping stocks.

My conditions were the following:

• Must at least be a 2nd liner.
• Must have good fundamentals with manageable debt.
• Must have good potential projects in development.

My strategic approach will be to employ a cost-averaging method for sleepers and use charts to check if the stock is still going where I want it to go. If not, then cut loss.

I made my first "sleeper play" today with FLI. See the chart below.

Resistance:1.54. Cut loss based on trendline: 1.48. Target Price: Based on trailing stops.

Intrinsic value: 2.44 (based on 10 year DCF with 1st 5-year growth at 10% and next 5-year growth at 5%)
ROE: 6% (yuck)
Total Liabilities payable within: 20 years (di puede 15 years na lang sana?)
Implied P/E at current price of 1.54: 11.7x
Beta: 1.46

This is a testing-phase for this system and I do not recommend you follow it just yet since this isn't tried and test. Caveat!