DAY S HIGLIGHTS. Philippine Equity Research Sept 12, 2013, Trend Watcher: Consolidations and Corrections

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1 Issue Previous Current Change Change % Philippines 6,090 6, Peso-$ (0.040) (0.091) DJIA 15,191 15, SP500 1,684 1, Nasdaq 3,729 3,725 (4.01) (0.11) England 6,584 6, Nikkei 14,423 14, Hong Kong 22,977 22,937 (39.51) (0.17) China 2,238 2, Bonds Yr Yield % (0.390) (1.32) Dollar Indx (0.31) (0.38) Gold 1, , Oil GSCICommod Idx 4, , Authored by: Juanis G. Barredo VP; Chief Technical Analyst COL Financial Group Inc. (632) Juanis.barredo@colfinancial.com Disclaimer: All opinions and estimates constitute the judgment of COL s Equity Research Dept as of the date of the report and are subject to change without notice. The report is for informational purposes only and is not intended as an offer or solicitation for purchase or sale of a security. DAY S HIGLIGHTS Philippine Equity Research Sept 12, 2013, 2013 US markets showed mixed moves with the Dow picking up 0.89% due to some reshuffling while the Nasdaq eases 0.11% Europe was mostly higher while Asia showed mixed results as many resistance spots drove some profit taking The US Dollar index fell by 0.38% breaking its short term averages and prods it to eye major support of its August lows The Philippines PSEi climbed 125 pts to 6,215 (+2%) and shifted slightly above our first targeted resistance of 6,200 Trend Watcher: Consolidations and Corrections Notes: Dow reshuffle aids its advance; Asia feels some strain after several days of rebound actions. The US markets showed mixed reads as the Dow proceeded on with advances likely because of an index reshuffle (see page 2). Europe was mostly higher continuing on with its rebound with Germany and France testing major tops. Asia was also mixed showing some profit taking pressure into many indices that have driven heavy advances in the last few days. Expect more cascades from now on as prices have left oversold conditions behind and must now ferret through various resistance zone. Recall that rebounds had such resistance zones as targets and may be used by range trade options to sell gradually or lighten if MACD readings still offer rally prospects. Focus Items Issue Highlight Page DOW Range trade 2 PSEi Lighten into rallies / range trade higher-lows 3 MSCI Phils EPHE Lighten into rallies / range trade higher-lows 4 Phi Lighten into rallies / range trade higher-lows 5 Stock Watch BLOOM, DNL 6

2 US: Dow Jones Tech Spotlight --- Page 2 Recommendation: Range trade Support: 14,760 14,551 Resistance: 15,450-15,658 The Dow rallied 135-pts breaking its 32 and 65-day MA resistance spot at 15,200 This was a key break that now allows extending its next target to 15,540-15,658 as it recaptures trend advances into the short and medium term MACD readings show some continuing recovery though negative values still carry this rally may produce a large channel body The Dow is undergoing a major index reshuffle by Sept 20 which may aid in its strengthening and moving to resemble the SP500 and Nasdaq (see below) Largest Dow Index reshuffle in a century (9/20/2013): Add : Goldman Sachs, Visa, Nike Reduce: IBM (from 9.4% to 7.9%) Remove: Bank of America, Hewlett Packard, Alcoa Inc.

3 Philippines: PSEi Tech Spotlight --- Page 3 Recommendation: Lighten into rallies (range trade higher-lows) Support: 5,896-5,678 Resistance: 6, 400-6,660 The PSEi swung up 125-pts (+2%) breaking over its first 6,200 resistance and possibly extending its rebound targets A corrective trendline and key Averages shows resistance zones at 6,400-6,660 which may yet be possible targets Given the 4-day up stretch, some profit taking may soon be seen causing some turbulence into the rebound MACD reads are still negative but shows more rally time Purchases made earlier for with range trade objectives should drive some lightening close to resistance zones Support stops to be carried to recent higher-lows (5,896) Reminder: PSEi index changes to be in effect by 9/16/2013: Add : GT Capital Holdings (GTCAP), LT Group, Inc (LTG) Remove: Belle Corp (BEL), Meralco (MER)

4 Tech Spotlight --- Page 4 US ishares MSCI Philippines: EPHE Recommendation: Lighten into rallies (range trade higher-lows) Support: Resistance: / The MSCI Philippines slid 0.10-pts (-0.30%) showing some resistance and profit taking after its 4-day upswing Its 32 and 65-day MA may extend some challenge to draw out some profit taking MACD readings acknowledge the rally and may be able to overbear momentary pauses for profit taking Nevertheless watch resistance carefully incase selling pressure resumes given the imperfect technical signals seen moreover risk-reward ratios from here on may be meager

5 PLDT-US (PHI) Tech Spotlight --- Page 5 Recommendation: Lighten into rallies (range trade higher-lows) Support: Resistance: PLDT-US slid $0.07 (-0.10%) paused from its extended rally as major resistance comes around the corner Resistance zones were estimated closer to and may be ripe for some profit taking action into range trades MACD reads are still negative but does indicate the rally to be in sway so be watchful for a selling window if resistance proves heavy A large down channel exists controlled by a down trendline standing near the above mentioned resistance points

6 32-MA 65-MA 130-MA 32-MA 65-MA 130-MA Stock Watch Pattern Resistance Break MACD Buy Resistance Challenge Tech Spotlight --- Page 6 Issue: Bloombery (BLOOM) Price: Recommendation: Trading buy into dips or Hold Suppt: Resist: RSI: 62 BLOOM managed to break away from its pattern (>11) and push towards its next resistance high of This presented a trading buy looking first at then followed by But it also shows a trend reversal (if 12 is broken) suggesting that it is now more open to continuing advances Look for trading buys (preferably into dips) or hold until the above resistance zones Issue: D&L Industries (DNL) Price: 6.60 Recommendation: Range Trade Suppt: Resist: / 7.23 RSI: 52 DNL pushed up yesterday threatening to break its down trendline (6.64) A breach above this would move its trend angle to a sidewards shift and promote a range trade to 7.23 MACD confirms this rally read although negative values also confirm the corrective consolidation stance DNL has also portrayed a higher low that may also warrant the range trade into next resistance