To Trade or to Invest? - Philippine Stock Exchange, Inc. (PSE)

 Timing is everything - sort of. The Philippine Stock Exchange, Inc. (ticker: PSE) broke out to as high as Php 245 a share before closing at Php 237, a 3.33% gain from it's previous close at Php 229.60. For technicians, the breakout could be attributed to the symmetrical triangle formation illustrated above. In addition to the technical aspect of the stock, the market in general - except for the industrial sector - closed in the green with 100 advancers, 54 decliners, and 41 neutral-"ers". The Philippine market traded on a positive note responding to the bull run in the US markets with the DOW up by 337.32 (2.87%) in a single day. Following this logic, we could also say that PSE's price increase is attributed to the US market. This is why I love the eccentricities of the stock market - given a sound explanation, anything can be attributed with anything. 

Anyways...

I've spotted PSE's  symmetrical triangle formation two days ago but didn't expect it to break out (or break down) anytime soon, less alone two days later. Even though I love breakouts, I usually like taking my chances before a potential breakout may occur. Therefore, should you intend in entering into a position with PSE,  be cautious because a symmetrical triangle breakout is susceptible for it to return to the previous support or resistance line that it just broke through. Hence, make sure to watch for this level to hold.

On the other hand, if you are looking to INVEST in (the) PSE, let me be your devil's advocate and give you a couple of speculative advice.

Invest in PSE because:

Metro Pacific Investment (MPI): Breakout 101

Metro Pacific Investment (MPI) closed at Php 3.77 today when it broke out from it's resistance level of Php 3.60. This is a 5.6% gain from it's previous close of 3.57. (What is a breakout? - definition and terms http://www.investopedia.com/terms/b/breakout.asp)

The break out occurred as a result of a cup and handle and/or an ascending triangle formation that was supported with a total volume turnover of 129 million shares -  a 117 million shares more than yesterday.  It's worthy to note that 50 million shares alone were purchased by Macquarie, "a global provider of banking, financial, advisory, investment and funds management services with more than 70 offices in 28 countries".

If the break out holds, the new resistance level would be at Php 3.85 with the support at Php 3.61.

Metro Pacific Investments holds interests in water and sewerage utility company, Maynilad Water Services, Inc., through DMCI-MPI Water Company; toll roads through Metro Pacific Tollways Corporation and its subsidiaries, Manila North Tollways Corporation and Tollways Management Corporation; hospitals through Medical Doctors Inc. and Davao Doctors Hospital Inc., Riverside Medical Center, Inc., and East Manila Hospital Manager's Corporation; and real estate through Metro Pacific Corporation.

Disclaimer: I currently hold MPI in my portfolio (although I have sold 40% of my position as of today's close)

TANDUAY HOLDINGS, INC (TDY) Secondary Offering

Cheers to those who subscribed to TDY’s secondary offering! 

With your funding, Tanduay, which has brands across all major liquor categories - rum, gin, brandy, vodka and whiskey - will utilize the proceeds “for the expansion, improvement and rationalization of its various plants in Negros, Cabuyao and Quezon as well as the upgrade of its facilities in Batangas…, all of these are targeted to improve manufacturing and production capacity” (Accord Capital).

According to researchers at Citiseconline, “the new investments will allow Tanduay to expand capacity to 192,800 cases/day from 158,800 cases/day (bold and italics mine) and reduce costs by as much as Php849Mil annually”.

Investing in Cebu Air, Inc. (CEB) – A Quick Techincal Analysis

In addition to my previous post on Cebu Pacific Airlines, I’ve added a quick technical point of view on the matter below. 

Even though my previous post indicated some positive factors that you may consider in your evaluation of CEB, the charts may tell us otherwise. According to the lines drawn above, CEB for the past year has been following a downwards trend with no broad signs of any long term reversals.