After weeks of setting the PSEi’s target at 8,500 which was brought about by the 8,100 breakout. This level was finally breached yesterday, October 17, 2017, with much delight from so many investors both here and abroad. As a Filipino investor, there’s much to rejoice about this upward movement but above and beyond the rejoicing it’s all about reverting to your trading plan and creating a framework of buying and selling to win. You have to remember winning in the stock market is all about following your trading plan that is rooted by both fundamentals and technicals. You must not listen to your emotions and you must only take profits based on sell signals of either technical or fundamental indicators that you have defined before making the trade. You have to remember, it’s not a question whether the market will go down but it’s a question of what are you doing while it is starting to correct. Early investors will take profits at what point or another no matter how good our economy is. That’s why the drop in the market today, should not be a surprise because investors were already anticipating to sell once the market hit 8,500.
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 Davao — October 20 – October 22, 2017
Stock Smarts Malaysia — November 4 – November 5, 2017
Stock Smarts Sydney, Australia — November 11 – November 12, 2017
Stock Smarts Qatar — November 16 – November 19, 2017
Stock Smarts Singapore — November 25 – November 26, 2017
Stock Smarts Manila — December 2, 3, 9, 10 & 16 , 2017
Stock Smarts Taiwan — December 21 – December 22, 2017
Stock Smarts Cagayan De Oro — January 13 – January 14, 2018
Stock Smarts London, United Kingdom — January 26 – 28, 2018
1. The end of the war in Marawi.
Investors don’t like the uncertainty of war. War adds a lot of risk to a country and no one wants to invest and start a business in a country where theres’s a lot of risk and uncertainty. The end of the war means that business can go on as usual. But I believe it does not stop there, rebuilding efforts in Marawi will help boost the economy of Mindanao in the next few years. The end of the war would also mean that martial law in Mindanao may come to an end soon. Again this is another net positive for the market.
2. Increate in OFW remittances
I would always mention in my Bloomberg interviews that, for the market to go higher there must be something unexpected that will cause buyers to come in and buy our markets at a premium. You have to understand that from where we are now, the Philippines is still expensive and positive news that’s unexpected will help push buyers to the table. This is what happened when August data for OFW remittances where at a five month high and beat expectations.
What does the technicals say?
The market is still in a long term uptrend and the breakout from 8,100 created a new uptrend for the PSEi to ride on. Today’s downward movement though relatively strong, does not change the trend. The PSEI is still in an uptrend and will continue to do so until the proven by the charts that a reversal is eminent. As of this point, we have no signs that a reversal is there. All moving averages and price and volume oscillators are still denoting upward movement in the market.
If you are a position trader hold your positions first and let the trend carry your investment further.
The failure of the market to go above 8,500 may bring a short correction to the PSEi, with the we may see the market go to as low as 8,300, which is a relatively weaker support. Now, if 8,300 holds and the market bounces from that level over the short term, we may see the market move in between 8,300 – 8,500. If 8,300 does not hold we may see the market retrace back to a relatively stronger support at 8,100.
On a positive note, if the market goes above 8,500, adjust your target price to 8,800.
I hope this helps you gain the confidence to trade the market and win! God bless you!
