Philippine Market Tip

MPI: Metro Pacific Investments

Technicals: As you can see from the chart below, the MACD has just signaled a "bullish divergence," wherein the MACD has had a "low" and a "higher low," while price has had a "high" and a "lower high." This indicates that the momentum to the downside is decelerating, and the sell-off may be over.


Fundamentals: MPI controls defensive companies such as Maynilad and NLEX tollways, which means that their cashflow will most likely remain strong even if the economy stalls.

Entry Price: 2.5-2.7
Cut: 2.45-2.5
Short-term Target: 3.1
Medium/Long-term Targets: the moon :)... 3.8 then 4.4

I plan to enter this trade tomorrow. I hope I won't be too late.

Lack of Discipline

HK MARKET:

I may have dodged a bullet this morning since all the shipping stocks were down big, but I think I just set myself up to catch one on Monday.

I was overly aggressive all day trading just one stock, HK:1114 (Brilliance Auto), due to the strength in the auto sector (both technicals and fundamentals look very promising). I was already correct in the afternoon, selling right before the market had turned, but 30 minutes before the close, I became greedy again and had the itch to trade. So, I ended up buying back the stock without a good set-up. Of course it went down, and I had to cut 2 flucs below my buying price (2.24). I wasn't done. 5 minutes before the close, I noticed that the stock found support at 2.21-2.22, so yes, I bought my whole position again at 2.23. Argh. Talk about the lack of discipline on my part.

The Dow Futures are down big again, and because there are no economic reports due today, the main market movers are the strengthening dollar and the bad Dell earnings/guidance, which came out earlier today. I believe (or more of hope?) that the expected drop tonight has already been priced in the Hong Kong market. Or else, I'll probably get killed on Monday. Sh*t.

PHIL MARKET:

I lost money today. I bought MER at 231 and sold it at 229. I also sold my whole position in CPM at cost. I'm all cash right now.

Funny. I'm very disciplined in the Phil. market, but in the HK market, I'm reckless. Why? The only reason I can think of is the fact that I'm down in HK, and I'm up in the Phils.

Lessons for today:
1. Avoid buying back a stock 30 minutes before the close. Limit buybacks in the morning, or right after lunch. Also, in these cases, position size must be lessened.
2. Plans are useless if you don't have the discipline to execute it properly. My original plan was to cease trading after I had locked in my profit. I didn't follow it. Again. So i lost money. Again. Greed and Hope are really my biggest enemies.

Dodged a Bullet

The US market experienced a mild correction and was down 94 points yesterday. Intraday, it went as low as 160+ points due to so-so economic data (initial claims, leading indicators), but it rallied because of the statement of Steve Ballmer that Windows 7 is performing well beyond expectations. The shipping stocks, which we have been following very closely the past few days, went down hard and formed 2 day reversals.

Thus, I'm actually feeling good right now given that I sold my shipping stock (HK:2866) at the close yesterday. Yes, I dodged a bullet - which easily could have killed my confidence. However, I don't expect the Hang Seng to go down too much today since it has already been down for 3 days. Nevertheless, I will be very cautious as this may just be start of a deep correction.

Philippine Market

I've decided that I will also share some of my trading experiences in the Philippine market. As of today, I'm already up 80% year-to-date. This is in spark contrast to my very large drawdown of 46% in my Hong Kong account. Why the large discrepancy? Well, in our company (HK market), we're basically discouraged to buy and hold for more than a couple of days. We are being groomed to be day/swing traders that get in and out quickly. This kind of style is very difficult especially in a market that is very volatile, as we are usually prone to constant whipsaws. On the other hand, for my personal account in the Philippines, I have the freedom to buy and hold a stock for more than a week or even a month (but my maximum is 2 weeks), which allows me to maximize gains and ignore market noise.

So there.

I'm currently holding CPM. I already made money in the stock, (I bought it at 4.15 and sold at 6) so I can buy it back at any price if there's a good set-up. As you can see from the chart below, after three days of profit taking from 6.3 to 5.1, the stock has stablized and volatility has lessened, so I bought at 5.5.