Stock Smarts Pick of the Week : January 23, 2014 - Marvin Germo

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Stock Smarts Pick of the Week : January 23, 2014

By: Marvin Germo | January 22, 2014

I’m trying to mix it up this year!  As much as I would want to analyse and list and go through numerous stocks the bulk commitments, the time spent outside for talks and financial consultations would limit my ability to write.  I would try to post more from time to time but I’d try to start with one for this first post  to make it more consistent moving forward.  As what I stated last year, my goal for the pick of the week is to serve as a reference point for people who would want to trade in and out of the market on a more regular basis.  However my desire is for you as an investor to make investment decisions based on your own conviction and research.  This does not also mean that the stock will run up forever or will go up the next day as this article is published.

The basis of the selection are leaning towards interpretations using technical analysis, however I will more often than not (99.99999999% of the time) only feature stocks that I believe in, stocks that are fundamentally sound and growing.  You would not see me post stocks which I do not know the value or even stocks which have very low liquidity.

I hope this series would encourage you further and bring you closer towards financial freedom!

Stock: DMC – DMCI Holding Inc.

DMIC January 23 2014

What I like about it?

1.  The reversal started October 2, 2013.  It is now more than 3 months since it broke out from a downtrend.  When all other stocks were falling last year.  DMC stood still and moved up.

2.  Mid term uptrend is intact.  If you follow the trendlines that I have drawn, the stock has continually followed and stayed the cross of the upward trend.  If the trend continues it is on its way to break 64 pesos, though it may also drop and retrace a bit before that happens.

3.  It has broken past all of my moving averages.  From my short term moving average of 20 days to 200 days.  This shows how bullish this stock is.  Not just for the short term but also for the long term!  All indicators are pointing out this stock is bullish until proven otherwise.  If you want to learn more about technical analysis click here.

4.  Broken Resistances: It has firmly broken resistances in the 52 and 54 levels.  From its current situation it looks like it is willing to stay way above it.

5.  MACD and DMI is bullish and is still showing signs of upward momentum.

What I don’t like about it?

1.  It just hit a very long term resistance at 60.  If it doesn’t break past it we may see the stock drop a bit to the 56-58 levels.  If it breaks out then well and good.

2.  Another resistance is close by, pegged at 63.5.  My beef with this level is this is the all time high.  Some people who got stuck at this levels may sell at break even or people who positioned early may take profits and bring the stock down.  Again taking profits is normal and is part of the game.  I leave it upto you if you plan to hold or sell already should this happen.

DMCI 2 years January 2014

The low down?

All in all, this is a fundamentally sound stock that is growing and in an uptrend.  What I like about the market is, a stock is in an uptrend until proven otherwise.  In this case it is still in an uptrend and I would choose to continue to either buy and hold this stock until I see it shift from an uptrend into something else.

That’s it for this week!  Remember to study before trading and to execute without emotions!

Shalom!  Nothing Missing!  Nothing Broken!


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*picture via chart nexus