For the past 2 years, the PSEI has closed the year down and in the red! This year we are closing the year on a high note! Armed by different positive catalysts throughout the year, the market propelled itself upward breaking its own all time high on several occasions and showing the world how amazing our market and economy is!
My dream is to have more and more Filipinos win in the market and have a specific strategy on how they can come out on top based on their strategy that will work for them! It can done and I believe the stock market will usher in a new generation of Filipino multi millionaires!
Catch me in my live training events! (quick plug)
The heart of why I do this seminars is I want to build a generation of Filipinos with the right foundation in stock investing. I want to bring smart investing to every Filipino around the world! If you would like to know more on how you could time the market checkout the trainings below.
Stock Smarts Cagayan De Oro — January 13 – January 14, 2018
Investor Insights 2018 — January 20, 2018
Stock Smarts London, United Kingdom — January 26 – 28, 2018
Stock Smarts Dubai, UAE — February 9 – 12, 2018
Stock Smarts Manila — December 9, 10 & 16 , 2017
WHAT WERE THE CATALYSTS?
1. The passing of the tax reform bill! This key legislation was something that everyone was watching out for since corporate earnings were not as high as what everyone was hoping for and we need positive game changers like this that will keep buyers on the table. This will help fund BUILD. BUILD. BUILD. and we all know how that ripples positively into the economy.
2. The better than expected GDP! Ladies and gentlemen, the world was expecting the Philippines to just be at 6.5% for the 3rd quarter but we shocked everyone by hitting a 6.9% GDP growth rate. This places the Philippines as the 10th fastest growing economy in the world and the fastest in our region!
3. Fitch upgrades Philippines’ credit rating and places us one notch higher across investment grade. This makes us look better in terms of how the world sees us specially that there has been a lot of political noise lately. This will also further our ability to borrow cheap to fund projects in the future.
IS THE MARKET EXPENSIVE?
Yes we are expensive. Our current P/E ratio places us at 23x at the current level of the PSEi. It would be good to wait for dips in the market for those who want to be selective, so you get to buy cheaper. While for people with relatively longer time horizons and want to be very passive and just really want to come in and invest, our economy and fundamentals are still amazing which will justify valuations later on should you want to come in now. But again your buy and sell signal should be based on your own parameters using both fundamentals and technicals.
Without a shadow of doubt, the future is bright for the Philippines. We just started slow as compared to the rest of the world but if we continue to put our act together our greatest days are still ahead of us.
WHAT DOES THE TECHNICALS SAY?
On a technical level, today, we finally broke out and closed above the 8,550 resistance level. This is something very significant to technical analysts, like myself, as this places us above the resistance. What you need to watch out for at the start of 2018 is if we hold above this level, because if we do so, bulls will still be in control and I really believe that the next target for the market will be at 8,800 / 8,900!
However failure to hold 8,550, would make the market retrace and drop to the immediate support at 8,368. Please mark this levels for your trades, so you have reference point on where the market could go next.
WHERE IS THE TREND HEADED?
The major trend is still bullish for the long term, with that we can still expect the market to creep up for 2018, this will be a prevailing theme for the next few months until we see any reversals in the trend. For position traders, who came in at the buy signal during the reversal early this year, congratulations! We do not have a sell signal yet, go ahead, sit tight and maximize your gains!
Oscillators are all bullish and volume indicators are denoting that money is still indeed coming in.