PSEI Update. Foreign Selling and Duterte. - Marvin Germo

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PSEI Update. Foreign Selling and Duterte.

By: Marvin Germo | September 1, 2016


The Question

“Hi Mr. Marvin!  I am from Davao and I am excited to see you here this November for Stock Smarts!  Just a question, is it true what they are saying, that the market is dropping because the Duterte honeymoon phase is over?” 

Michael, Davao

Hi Michael!  Thank you so much for the email, I’m excited to meet you to and all of our wonderful kababayans in Davao!  Yes we will have four action packed sessions there from technical analysis to fundamental analysis!  Looking forward to personally meet you this November 5!  I will answer your question in this blog along with my regular PSEI update.  I hope this helps you in your trades and helps more people asking the same questions that you are asking.

The context of this whole blog is this is a a continuation from my post this morning, during the first hour of trading where I said

“The market slides down 1.51% in the first hour of trading. This brings the market close to the support at around 7,645. Let’s see if the market holds off this range and bounces.

If it does, the market it is relatively protected and the drop may stop for the time being.”

Catch me in my live training events! (quick plug)

To those who want to take it a notch higher and want a good foundation in stock trading and investing.  I would like to invite you to our live seminars in Metro ManilaSingaporeAustralia, UAECebu and Davao.  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!  This is my passion and this is what I want to do over and over!  To bring more consumers to investors!  We will be teaching different techniques from how to select the right stocks up to how to find the perfect timing in buying and selling stocks.

Stock Smarts Manila —  September 3 & 17,  and October 1, 2016
AFP UAE —  September 9 – 13, 2016
Stock Smarts Australia —  October 15 & 16, 2016
Stock Smarts Cebu —  October 28 & 29, 2016
Stock Smarts Davao —  November 5 & 6, 2016
Stock Smarts Singapore – November 28 & 29, 2016

Stock Smarts Davao

What does the charts say?

Guess what?

The market did dip close to 7,645 just before lunchtime! But just like how support ranges work, buyers started to emerge and brought the stock back up. So now let’s see if the stock can stay above 7,640!  Because if it does, then probably we have seen the end of the short term correction.

Watch the 7,640 price range, because should it stay and hold this level the market now has the potential to go back to 7,931.

However if the market does not hold 7,640 and it starts to drop, possible corrections could lead the market to 7,537 to as low as 7,249 over the short term. Again the market will still stay bullish for the long term as long as 7,249 is protected.

On foreign selling

There has been a lot of talk that the honeymoon period of the Duterte administration is over and that foreigners are exiting the market. Well guess what, foreigners have been selling and doing this over and over even in the past few years regardless of the administration. You have to understand that foreign funds need to make profit and selling is normal because it allows them to lock in gains and comeback later again when the market is cheaper.  Just looking at the numbers the market is at 21.96x P/E which makes us relatively expensive and if there is one thing foreign funds can do is that they can shift their funds to cheaper markets when certain exchanges are relatively more expensive.

What I am saying is, this is normal. What people don’t see also is that when foreigners sell, it gives locals the chance to buy cheaper (I am talking to investors here. Of course if you are a trader, please avoid the market while it is falling).  Foreign selling is actually local buying.

Has anything changed?

As of this point, nothing has changed in the fundamentals of the country. Our country’s fundamentals is amazing and we are still bound for greater things. Corrections like this happen no matter how good an economy of a country is.

will position you for even greater heights. Of course you still have to be selective buying good, quality stocks and time them well using technical analysis.

A dose of inspiration

I hope this helps! God bless you!  Remember your hope and peace is not based on what you see in the economy but because your prosperity, hope and abundance is based on the sure work of Jesus at the cross.  We talk a lot about stocks and money but lets set our eyes not on the provision but on the provier.

I’m excited to share my latest book, Where Should You Invest?    This will answer one of the biggest questions on the what, where and when you should invest on. I will also tackle the concept that there are certain investments that work well with others and some investments that don’t work well at a certain investment phases.

This is aimed to help investors have a holistic sense on how they can grow, maximize, and preserve their wealth!(Stock Smarts Book 4 is also coming this year)  I also feature other books in my website with authors that I respect which have different expertise in Finance, Business, Investing and everything else in between.

For more details and to order: Marvin Germo Book Orders

Marvin Germo Book Orders