Common Sense Trading - A Blue Jeans Approach to Philippine Stock Market Trading

When the U.S. stock market slides, our will slide. Same old same old. -20 yesterday, around the same today. Not quite what I expected for the week. I thought those bulls were right around the corner. Maybe they're just gathering momentum. On the bright side, Tsupitero says it doesn't look so glum right now. The numbers never lie and they are no longer pointing downwards. Are they looking up? Maybe. We don't know for sure. I guess its time to place new bets. If I'm to listen to my gut feel, I say we'll see the index hit 2700 before we have any serious bull runs that will breach last year's highs.

PAX is one stock that many would like to forget. It figured in many portfolios during 2007 but performed miserably towards the end of the year. These days, it is languishing at around the price of Php3.00/sh. Twelve months ago it looked ready to hit ten times that price. Aside from the one-two punch of the falling dollar and the slowing U.S. economy that hit the BPO industry as a whole, PAXYS faced problems of its own. The long and the short is that its revenues failed to hit targets miserably and there was little or nothing to give investors a reason to hang on to its stock. Just recently though, they announced the formation of a joint venture, implying better business to come. The details are a bit sketchy for me, I have yet to review it to figure out what I think of it. For the meantime, Citisec thinks its positive and is busy changing their Target Price for PAX - presumably for the better.

After the three day weekend, April 3 was a day of sideways movement. The PSEi closed at 2,981.12, which was down by only 1.92 points from the last trading day. While we saw the bears flexing their muscles late last week, they seemed to be tentative today. At some point I saw the market down by over fifty points but then the next moment it would be up again. I expected the market to keep heading down towards 2700 or 2500, at which point I was preparing to take a few more positions. However, it seems that the bears are looking like they want to take a summer break. I'm starting to get more excited.

The bears woke up after a short slumber. The Psei closed April 4 at 2983.94, 51.77 points lower than the previous day's close. All but one (BDO) of the top traded stock for the day went down. BDO remained unchanged at Php53.50. The Philippine Stock Exchange seems to have been under the bears control for too long, but the activity during the early part of the week tells me that its possible that we'll be hearing more than just a strong dissent from the bulls.

The Philippine Stock Exchange Index had been on the rise, finally breaking that 3000 level after languishing below it too long for comfort. The PSEi closed April 3 slightly above the 3000 level. BDO, MER and MWC took most of my attention. MER Although MER fell from its glorious high of 114 within the past 52 weeks, it seems to be doing much better than its counterparts. I've always wondered if hot summer months make life better for a utility company like meralco. MER closed April 3 at Php81.50. MWC I only decided to check this company out after my girlfriend told me to buy it based on a random thought. I did some research and found it suited my preferences for stocks. The long and short was that I bought it at the 14 level and sold happily at around 17.75. MWC closed April 3 at Php18.25 BDO We often refer to this as "Henry Sy's Bank" or "SM bank." I know someone who won't buy this stock solely because she doesn't personally like the ol' man Henry...

Around November last year, I was kicking myself for not buying this stock. It was hovering around the fivish level for so long, I thought it was stuck there for good. Hehe. Yet, by November last year it was punching the 11 level and looking like it was ready to hit 12. Everyone is a genius in hindsight. Ideally, I should have bought some at the fivish level, sold it when it reached around ten, then by now I would happily be considering buying some back at its current levels. But no, we bought some geo at a price range with a low of 1.5 and a high of 2.4. When it peaked at 2.7, I failed to see it sputter. Now its down to 1.2 and I'm having a big exercise in patience.

The newspapers reported of a rice shortage. I thought it was a joke. Soon after, I heard it on TV too. I guess they weren't kidding. It was a serious issue. It just sounds so crazy that a country like the Philippines would be worrying about a rice shortage. From what I've read, the government denies that we shouldn't be affected by the Global crisis. I really have to agree with that. Yet, a tiny part of me wouldn't put it past shady businessmen to begin hoarding and create that shortage locally and make a pretty penny while at it. I hope they catch those suckers!