Philippine Equity Research - COL Financial · Philippine Equity Research Mar 28, 2017 Disclaimer:...

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Authored by: Juanis G. Barredo VP; Chief Technical Analyst COL Financial Group Inc. [email protected] Philippine Equity Research Mar 28, 2017 Disclaimer: All opinions and estimates constitute the judgment of COLs 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. DAY’S HIGLIGHTS US markets were weak but the Nasdaq managed to rally Europe was lower, Asia was clearly lower The US Dollar fell breaking its Feb lows, the Euro & Yen rallied; Gold rallied while Oil slid The Philippine PSEi shifted lower 23-pts but remains in range PSEi Trend Watcher: Wide Consolidation Range Notes: PSEi slides, some sub-index show cracks; PLDT rallies The local market shared declines with the rest of Asia with the PSEi slipping 23-pts for the day. And although the market breadth was kind of flat with 81 advancers versus 90 decliners, we did see some technical weakness from the sub-indices of Commercials & Industrials, as well as on Property and Financials (see page 2). Stocks like ALI, AP, BLOOM, FPH, HLCM, JFC, MAXS, X, MBT, MEG, MPI, NOW, PLC, PNB, PSPC, RRHI, SBS, SMC, and TUGS are examples of issues showing recent weakness. These sub-indices need a show of demand to counter the support breaches we have just seen. If not then these may put on more pressure on the index which now stands close to its 65-day MA Support (one that has not been broken since rising above it in the beginning of January). Well at least we did see some positive shifts from PLDT and its US counterpart PHI – both of which where up over 3% and did break off from resistance… nice! Focus Items Issue Highlight Page Philippine Sub-index Review Some weakness seen 2 DOW Stay light and wait for support 3 PSEi Hold and watch its range 4 MSCI Phils ‘EPHE’ Hold and watch stop 5 PHI Trading Buy 6 Issue Previous Current Change % YTD % Philippines 7,270 7,246 (23.65) (0.33) 5.93 Peso-$ 50.325 50.099 (0.226) (0.45) 0.76 MSCI Phils 34.19 34.2 0.01 0.03 5.56 PLDT US 30.67 31.77 1.100 3.59 15.32 DJIA 20,597 20,551 (45.74) (0.22) 3.99 SP500 2,344 2,342 (2.39) (0.10) 4.59 Nasdaq 5,829 5,840 11.63 0.20 8.49 England 7,337 7,294 (43.32) (0.59) 2.11 Nikkei 19,263 18,986 (276.94) (1.44) (0.67) Hong Kong 24,358 24,194 (164.57) (0.68) 9.97 China 3,269 3,267 (2.49) (0.08) 5.26 US 30yr Bond 151.1 151.4 0.30 0.20 1.07 10-Yr Yield 24 23.73 (0.270) (1.13) (2.98) Dollar Indx 99.44 99 (0.44) (0.44) (3.22) Gold 1,248.50 1,255.70 7.20 0.58 9.03 Oil 47.97 47.73 (0.24) (0.50) (11.15) CRB Index 183.47 183.10 (0.37) (0.20) (4.89)

Transcript of Philippine Equity Research - COL Financial · Philippine Equity Research Mar 28, 2017 Disclaimer:...

Page 1: Philippine Equity Research - COL Financial · Philippine Equity Research Mar 28, 2017 Disclaimer: All opinions and estimates constitute the judgment of COL’s Equity Research Dept

Authored by:Juanis G. BarredoVP; Chief Technical AnalystCOL Financial Group [email protected]

Philippine Equity Research

Mar 28, 2017

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.

DAY’S HIGLIGHTS

• US markets were weak but the Nasdaq managed to rally

• Europe was lower, Asia was clearly lower

• The US Dollar fell breaking its Feb lows, the Euro & Yen rallied; Gold rallied while Oil slid

• The Philippine PSEi shifted lower 23-pts but remains in range

PSEi Trend Watcher: Wide Consolidation Range

Notes: PSEi slides, some sub-index show cracks; PLDT rallies

The local market shared declines with the rest of Asia with the PSEi slipping 23-pts for the day. And although the market breadth was kind of flat with 81 advancers versus 90 decliners, we did see some technical weakness from the sub-indices ofCommercials & Industrials, as well as on Property and Financials (see page 2). Stocks like ALI, AP, BLOOM, FPH, HLCM, JFC, MAXS, X, MBT, MEG, MPI, NOW, PLC, PNB, PSPC, RRHI, SBS, SMC, and TUGS are examples of issues showing recent weakness. These sub-indices need a show of demand to counter the support breaches we have just seen. If not then these may put on more pressure on the index which now stands close to its 65-day MA Support (one that has not been broken since rising above it in the beginning of January). Well at least we did see some positive shifts from PLDT and its US counterpart PHI – both of which where up over 3% and did break off from resistance… nice!

Focus ItemsIssue Highlight Page

Philippine Sub-index Review Some weakness seen 2

DOW Stay light and wait for support 3

PSEi Hold and watch its range 4

MSCI Phils ‘EPHE’ Hold and watch stop 5

PHI Trading Buy 6Issue Previous Current Change % YTD %

Philippines 7,270 7,246 (23.65) (0.33) 5.93

Peso-$ 50.325 50.099 (0.226) (0.45) 0.76

MSCI Phils 34.19 34.2 0.01 0.03 5.56

PLDT US 30.67 31.77 1.100 3.59 15.32

DJIA 20,597 20,551 (45.74) (0.22) 3.99

SP500 2,344 2,342 (2.39) (0.10) 4.59

Nasdaq 5,829 5,840 11.63 0.20 8.49

England 7,337 7,294 (43.32) (0.59) 2.11

Nikkei 19,263 18,986 (276.94) (1.44) (0.67)

Hong Kong 24,358 24,194 (164.57) (0.68) 9.97

China 3,269 3,267 (2.49) (0.08) 5.26

US 30yr Bond 151.1 151.4 0.30 0.20 1.07

10-Yr Yield 24 23.73 (0.270) (1.13) (2.98)

Dollar Indx 99.44 99 (0.44) (0.44) (3.22)

Gold 1,248.50 1,255.70 7.20 0.58 9.03

Oil 47.97 47.73 (0.24) (0.50) (11.15)

CRB Index 183.47 183.10 (0.37) (0.20) (4.89)

Page 2: Philippine Equity Research - COL Financial · Philippine Equity Research Mar 28, 2017 Disclaimer: All opinions and estimates constitute the judgment of COL’s Equity Research Dept

Philippine Sub-Index Review: Some weakness seenTech Spotlight --- Page 2

More demand needed to avert wilting tides: • With the PSEi now inching its way towards its 65-day Mov Ave (7,215) support and nearing its consolidation lows of 7,123… the need for some demand muscle is upcoming • After looking at its sectoral components we did notice that the Commercial & Industrials, Property, and Financial sub-indices (illustrated into the left column of stocks) seem to have shown some support lapses already… clearly not a helpful note• What did help was the rise of the Services index which was primarily lifted by recent recoveries from PLDT, Globe Telecom (both of which show decent chart formations) and ICTSI (but it iscoming from an overbought swing and may need to correct a little)• The Mining and Oil sub-index as is the Holdings index are still stuck in a consolidation and have yet to render a decision on their ranges • This the first three indices need better showing in demand to avert what could be a down draft – one that could put the PSEi under risk if heavier selling pressure is encountered

PCOMM

PMINI

PHLDG

PSERV

PPROP

PFINC

Page 3: Philippine Equity Research - COL Financial · Philippine Equity Research Mar 28, 2017 Disclaimer: All opinions and estimates constitute the judgment of COL’s Equity Research Dept

US: Dow JonesTech Spotlight --- Page 3

Recommendation: Stay light and wait for support

Support: 20,331 – 19,993 Resistance: 20,815 – 21,200

• The Dow fell 45-pts and continues to react after breaking support of its up trendline and 32-day MA

• The support breach may entice the index to seek lower levels of support – estimating them to be closer to 20,331 (65-day MA which sits nearby now) to 19,933 (38.2% FiboRet)

• The weak MACD may keep the pressure on as it feeds the corrective view; but coming from a recent up trendcorrections should try to keep themselves sideways before scaling down to strongly ( this may drive some choppy swings first)

• Resistance estimate is adjusted down to 20,815 and is followed by 21,200

Page 4: Philippine Equity Research - COL Financial · Philippine Equity Research Mar 28, 2017 Disclaimer: All opinions and estimates constitute the judgment of COL’s Equity Research Dept

Philippines: PSEiRecommendation: Hold and watch its range

Support: 7,215 – 7,123 Resistance: 7,402 -7,417 / 7,721

• The PSEi slipped down 23-pts and remains within its consolidation

• It is however moving to test it 65-day MA which it has stayed over since early January – if this breaks it may add pressure on the index to retest its 7,123 low

• Although given that the support range in the PSEi is still intact, some key issues are breaking support stops which may also add pressure to the index (at least PLDT is trying to counter this)

• The PSEi’s MACD is still limp and may continue to keep this frail sign so long as the consolidation ensues

• The maintenance of the pattern still suggests a hold for now, but mark the 65-day MA or 2-month low (7,215-7,123) as your new stop to lighten

Tech Spotlight --- Page 4

R

S

We need to

see this…

And not this…

Page 5: Philippine Equity Research - COL Financial · Philippine Equity Research Mar 28, 2017 Disclaimer: All opinions and estimates constitute the judgment of COL’s Equity Research Dept

US iShares MSCI Philippines: EPHETech Spotlight --- Page 5

Recommendation: Hold (but watch stop)

Support: 33.86 - 33.19 Resistance: 34.74 - 35.23

• EPHE inched up $0.01 (+0.03%) and tries to hold over its 65-day MA as well

• However its MACD looks little hazardous and its seems to be preparing to cross down… we may have to keep a close eye on support (33.86-33.19) just in case we need to activate a stop

• These support ledges need to hold to keep the consolidation in place less it force in another reactive phase

• A support breach may take prices closer to 32.10 or 31.34

And not this

R

S

We need to

see this…

Page 6: Philippine Equity Research - COL Financial · Philippine Equity Research Mar 28, 2017 Disclaimer: All opinions and estimates constitute the judgment of COL’s Equity Research Dept

PLDT-US (PHI)Tech Spotlight --- Page 6

Recommendation: Trading buy

Support: 30.26 - 29.11 Resistance: 33.80 - 34.56

• PLDT-US jumped 1.10-pts (+3.59%) and finally broke animportant resistance barrier

• This recalls a trading buy as its short term trend has reactivated an upward bias

• An estimated channel high would place rally targets between $33.80 to $34.56 (260-day MA)

• MACD reading maintain a rally view and supports the rallying call

• Price parity of PHI to TEL stands at ($31.77*50.099= P1,591)