Bullseye Report Weekly Overview

Authored by: Juanis G. Barredo VP; Chief Technical Analyst COL Financial Group Inc. (632) 636-5411 Juanis.barredo@colfinancial.com

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 only and is not intended as an offer or solicitation for purchase or sale of a security.

Philippine Equity Research

Sept 28, 2015

WEEK’S HIGLIGHTS • The Philippines’ PSEi slid down 214-pts for the week failing to

close its price gap (not a good sign) and now look to retest support

• Average Daily Value Turnover dipped to P7.1-B from P17.5-B the week previous

• Net foreign flows showed a net sell of P2.3-B from a net sell of P24.4-B the previous week

• The PSEi (at 6,918) lost 3% for the week and prods out the need to retest its recent lows and see whether such support points can defend this earlier presented demand zone. The PSEi has so far bounced from major support of 6,862-6,600 and whipped up a decent rally to resistance. But an open price gap remains unclosed and leaves us to infer that an overhang of supply remains and proves to be a challenge to unwind. Such a supply overhang has forced a support retest and can only develop into a wider recovery swing if such a retest process is successful. Moreover renewed weakness from US markets and Europe (as these carry out support retests as well) add weight to renewed corrective swings. Our markets need to show a confirmed base and not simply an temporary oversold rebound. A successful double support test by the SP500 (and by other markets) carried out through appropriate ‘W’ like formations is what we need to unhinge the selling program and profess wider rally prospects (see our Sept 9 tech Spotlight)

Focus Items Highlight Page

Philippines : Weekly Stats 2

Philippines : PSEi & Peso 3

Tech Map: Some key stocks and trend calls 4

US and Europe: In review 5

Asia: In review 6

Currencies & Commodities: In review 7

Issue Prev Wk Last Wk Wk Chg Wk Chg % YTD %

Philippines 7,132 6,918 (214.36) (3.01) (4.33)

Peso-$ 45.517 46.738 1.221 2.68 4.51

MSCI Phils 35.15 34.10 (1.05) (2.99) (10.73)

PLDT US 49.620 47.860 (1.760) (3.55) (24.38)

DJIA 16,385 16,315 (69.91) (0.43) (8.46)

SP500 1,958 1,931 (26.69) (1.36) (6.20)

Nasdaq 4,827 4,687 (140.73) (2.92) (1.05)

England 6,104 6,109 4.90 0.08 (6.96)

Nikkei 18,070 17,881 (189.70) (1.05) 2.46

Hong Kong 21,921 21,186 (734.51) (3.35) (10.25)

China 3,098 3,092 (5.57) (0.18) (4.40)

US 30yr Bond 155.94 155.09 (0.85) (0.55) 2.19

10-Yr Yield 21.300 21.680 0.380 1.78 (0.09)

Dollar Indx 95.000 96.430 1.43 1.51 6.41

Gold 1,139.10 1,145.50 6.40 0.56 (3.19)

Oil 45.32 45.34 0.02 0.04 (15.58)

GTX 2,590.98 2,623.01 32.03 1.24 (18.86)

-1.085

16.5

7.3

0.92

9.5 4.3

1.6 2.3

-0.282

0.555 0.478 3.06 4.2

0.61

-5.66

0.086

-4.4 -0.993

-3.6 -2.1 -2.5 -4.9 -3.2 -2.6 -2.6

0.266

-2.51 -0.745 -2.02 -3.5 -0.613

-3.7 -2.4

-11.8

-2.2 -3.01

-24.4

-2.34

-30 -25 -20 -15 -10

-5 0 5

10 15 20

09

/01

/20

15

1

6/0

1/2

01

5

23

/01

/20

15

3

0/0

1/2

01

5

06

/02

/20

15

1

3/0

2/2

01

5

20

/02

/20

15

2

7/0

2/2

01

5

06

/03

/20

15

1

3/0

3/2

01

5

20

/03

/20

15

2

7/0

3/2

01

5

03

/04

/20

15

1

0/0

4/2

01

5

17

/04

/20

15

2

4/0

4/2

01

5

4/3

1/2

01

5

08

/05

/20

15

1

5/0

5/2

01

5

22

/05

/20

15

2

9/0

5/2

01

5

05

/06

/20

15

1

1/0

6/2

01

5

19

/06

/20

15

2

6/0

6/2

01

5

03

/07

/20

15

1

0/0

7/2

01

5

17

/07

/20

15

2

4/0

7/2

01

5

31

/07

/20

15

0

7/0

8/2

01

5

14

/08

/20

15

2

0/0

8/2

01

5

28

/08

/20

15

0

4/0

9/2

01

5

04

/11

/20

15

4

/18

/20

15

4

/25

/20

15

Net Foreign Flows (PHP Billions)

Philippines: Weekly Stats** Bullseye --- Page 2

*Source: PSE PER data uses four-quarter trailing financial data

2015 Net Outflows of P41.48-B

Philippines: PSEi & Peso Bullseye --- Page 3

Recommendation: Lighten into resistance/Range Trade*

Support: 6,923-6,636 Resistance: 7,209 – 7,335

• The PSEi lost 214-pts for the week at 6,917 as selling actions resumed after a technical rally

• Its weekly technicals still show continuing vulnerability to a corrective drive as its MACD stay negative with a ‘sell’

•A price gap from the breakdown event stays open and serves to drive resistance (due to an overhang of sellers)

•We counsel for some lightening or selling into rallies towards resistance given the ongoing down trend and lack of a completed (& successful) reversal pattern

• If prices can hold over its recent lows, a range trade* may open

Recommendation: Stay light on the Peso

Support: 46.65 - 46.60 Resistance: 47.00 - 47.18

• The Peso-$ (at P46.73) weakened vs the Dollar and maintains its slippery trend but manages some corrective need

•MACD reads still shows more devaluation pressure

• Its measured target resistance sits between 47.00 (hit) -47.18

•We recommend to Stay lighten on the Peso as corrective trends remain

• Short term support is at 46.65 to 46.00

Breakout

Tech Map

ION CROWN 2GO AC OV AGI TEL X DD ABS ALI PIP ANS VLL SBS AEV APC PSPC BHI ANI AR PX BLOOM AP AT RRHI BPI AUB BEL RWM CIC BDO CHIB SECB CPG CAL CNPF SMC DMPL CEB* COAL TA EEI DAVIN COSCO TAPET EW DNL DIZ UBP FDC FED DMC FNI GLO* EDC FPH JGS ELI HLCM MER EMP HOUSE MPI FGEN ICT PNX FLI LPZ RFM* FOOD LTG RLC GERI MA SCC GTCAP MCP SGI IMI MWIDE SM IS NI SMPH JFC PCOR UNI LC PHA URC LR PLC MARC PNB MAXS PSE MBT PXP MEG RCB MWC ROCK NIKL SSI ORE STI

2 (+1) 3 (0) 25 (+5) 43 (+2) 34 (-8)

Bullseye --- Page 4

Some Key Stocks and Trend Calls

GREEN

RED

BLACK

-These issues improved their technical condition for the week (moving to the left of their column category on the Tech Map) -These issues deteriorated on their technical condition for the week (moving to the right of their column category on the Tech Map) -These issues carried the same technical condition for the week (standing on the same column category on the Tech Map)

Legend: (Note: Trends are cast in the short term)

Up trends: These issues show continuing if not strong up trends. Look for trading buys now if risk-reward measures are appealing or if not, buy into slight dips.

Up trends needy of reactions or are reacting: These issues show continuing up trends but are showing some reactive adjustments due to profit taking. Look for pullbacks to short term support or a rally from such support to cast fresh buy trades.

Consolidations (Sideward trends): These issues are running through consolidation phases. Either wait for key range breaks or range trade and buy into a support bounce. Keep watch of possible range break bias in the following direction [~-up/down, ̂ -up, *-down).

Down trends needy of rallies or are rallying: These issues show continuing down trends but are undergoing a temporary/oversold rally. Lighten or sell into rebounds to resistance for now.

Down trends: These issues show continuing down trends. Stay out for now until better demand patterns appear.

Stock Code Color Guide:

Total Issues (change from last report)

US and European Markets Bullseye --- Page 5

US & Europe drive support retests

• US markets drove lower after the results of the Fed Meeting saw a steady sideways shift in rates. A retest of recent lows may yet be needed to sponsor a stronger shelf before looking into a better conditioned rebound... Without one its declining trend could continue

• US indices were down between 2.9% to 0.5% for the week

• Next support estimates for US indices are the ff: Dow: (S) 16,000 – 15,650

SP500: (S) 1,900 – 1,867

Nasdaq: (S) 4,614 – 4,500

• US 10-Yr Bond Yield still managed to close up for the week despite the Fed’s decision to still rates in its latest meeting... Although some reactions have been shown recently the potential for a recovery is still shown

• European indices were mostly lower but like the US market is working on retesting recent support lows. So far no breaks into 1-month lows have been shown pushing us to be proceedingly watchful of such support areas as a successful hold here could generate more recovery action

* Simple Moving Averages: 20-Period 50-Period

Rounding

Top

Asian Markets Asia still dealing with down drafts… careful

support watch still advised

• Asian markets still faces some pressure as ongoing down trends have yet to be appropriately reversed with stronger patterns

• Technical rebounds have been temporary and were introduced to offset oversold levels... Once oversold levels had been tempered, declines have reactivated and will drive support retests to confirm possible reversal options or continuing declines

• Support retests are once again being drawn out

• The Philippines PSEi (6,917) was lower for the week (-3%) pushing the index back closer to its September lows of 6,862. The index needs to show a solid brace hereabouts and should not try to come close to its recent panic generated low of 6,603 (in August). A medium term declining trend persists in the PSEi. And a fallback to its panic low would send very wrong signals and would weaken its technical viability to rebound. A higher low base above this site is very much needed to propose that support has been successful retested and confirmed. This may then inspire more rally action in the interim

Bullseye --- Page 6

* Simple Moving Averages: 20-Period 50-Period

6,882-6,862

Currencies & Commodities Dollar, Euro, Yen & commodities consolidate

• The US Dollar index (96.43 +1.51% WoW) was higher for the week but did encounter some pressure near resistance at 96.70; a wider pattern remains locking prices within 98.43 and 93.75. A range trade of this wider range is offered in the interim

• The Euro index (111.94 -0.94% WoW) was lower for the week after failing to hold on to its recent attempt to break free from its 114.69 resistance. Prices have come back to pattern in (with support at 110.85 then 108)

• The Yen index (82.92 -0.90% WoW) [$¥120.59] was lower for the week and seems to be losing some traction and may have to test short term support of 82.50 or even 81.70. The Yen needs to break over 84.30 to induce more upward recovery

• Gold ($1,145.50 +0.56% WoW) was higher for the week maintaining a short term rebound off a medium to long term decline. Next support is estimated $1,120 and $1,097 – resistance is at $1,170-$1,185

• Copper ($2.28 -4.1%) reacted heavily and is testing its ability to stand over recent lows

• Oil ($45.34 +0.04%) rose slightly for the week but to build a small pattern between $49.33 and $43.36. Oil must break over $47.71 or $49.33 to widen its rally initiative

Bullseye --- Page 7

* Simple Moving Averages: 20-Period 50-Period