Issue Previous Current Change % YTD % Philippines 7,630 7,589 (41.11) (0.54) 10.93 Peso-$ 49.43 49.54 0.110 0.22 (0.36) MSCI Phils 36 36.26 0.26 0.72 11.91 PLDT US 35.26 35.95 0.690 1.96 30.49 DJIA 20,453 20,637 183.67 0.90 4.42 SP500 2,329 2,349 20.06 0.86 4.92 Nasdaq 5,805 5,857 51.64 0.89 8.80 England 7,328 7,328 0.00 0.00 2.59 Nikkei 18,427 18,355 (71.58) (0.39) (3.97) Hong Kong 24,262 24,262 0.00 0.00 10.28 China 3,276 3,222 (53.79) (1.64) 3.82 US 30yr Bond 153.21 152.83 (0.38) (0.25) 2.02 10-Yr Yield 22.32 22.52 0.200 0.90 (7.93) Dollar Indx 100.46 100.19 (0.27) (0.27) (2.05) Gold 1,288.50 1,291.90 3.40 0.26 12.17 Oil 53.18 52.65 (0.53) (1.00) (1.99) CRB Index 187.77 187.39 (0.38) (0.20) (2.66) * Issue names in purple indicate a non-trading day Authored by: Juanis G. Barredo VP; Chief Technical Analyst COL Financial Group Inc. 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. Philippine Equity Research April 18, 2017 Focus Items Issue Highlight Page US Rallies Can it re-inspire demand from spooked Asia 2-3 DOW Range trade watch range limits 4 PSEi Hold 5 MSCI Phils EPHE Hold 6 PHI Take some profits or Hold 7 DAY S HIGLIGHTS US markets recover from support; Europe was on Easter Monday holiday as was Hong Kong Asian markets were mostly lower, warry of US action The US Dollar was little lower; Gold rallied while Oil slid The Philippine PSEi slides 41-pts while the Peso slid to 49.54 PSEi Trend Watcher: UP Notes: US markets opens with a bunny jump; will Asia follow? After the long holidays the US managed to bounce well from a critical area of support and may have saved the day, if it can keep itself right side up. A tender Asia may try to bank of this rally and offset much of the weakness its showed yesterday. But close attention and careful regard may be needed as some trendline breaks and support ruptures were seen. We may need to see more convincing swings from the US (a push over reactive trendlines) to carry a wider the rally flag across to other tender markets. In the Philippines we did see some pullback action but this was due to some light overbought conditions and not as a major turn away from the recent rallying trend. We may conduct brief pullbacks which may open fresh trading windows for a number of stronger counters like some banks (see page 3). Buying into risk-managed breakouts (not so fast and furious ones) or after reactions to an up trend s support is preferred.
Tech Spotlight --- Page 2 US Rallies: Can it re-inspire demand from spooked Asia? Asia jarred, but may recoup after US rally: Asian markets were taken aback yesterday, perhaps in cautious regard of the US sitting over a crucial support but with last night s rally, we do hope some recovery can surface China and Singapore had backed off to their support lines while Malaysia, Thailand, India and Indonesia did see some up trendline breaks this may yet cause some wariness and tension as such support ruptures do signify momentum loss Furthermore many of their MACD s have shown cross downs which suggest a short term corrective period has been activated This may continue to drive choppy action despite it managing with a rally today (assuming one comes of course) Although this could benefit the PSEi (and the Peso) if some funds can be re-allocated our way (as we have lagged in some rally action compared with others) but if broader sways drive corrections later, I think we may have to submit to similar reactions (given also that we are closer to overbought levels) This could offer up some better entry spots for the Philippines if such reactions can narrow wide spreads of current prices to their short term support (as shown by their 16 to 32-day Moving Averages)
Tech Spotlight --- Page 3 US Rallies: Can it re-inspire demand from spooked Asia? Banking Bonanza: A strong sector Today we look over a sector that has been doing quite well in recent periods especially after seeing a number of breakout swings banks! With quite a number of banking stocks still showing upswings and breakoutreaction counter swings, we endeavor to zone in on a few that may yet have some potential now or after completed reactions towards support moves have done well to assert trading buy swings in a number of these financials (BPI, BDO, MBT, and recently SECB & RCB) and such may yet continue to do so perhaps for those that may be priming to conduct one like in the case of EW (and even PNB which may already have broken out not shown here) If you missed the breakout swings, you may want to consider looking into buying the first or second pullbacks to support from their push to resistance (see red arrow markers in BPI, BDO & MBT while SECB may soon need to draw out something like this after hitting its possible target range of 220-230 Keep on looking for such reactions to support for entries so long as their trendlines do not break and/or as long as no divergences are seen SECB EW RCB Will it? BPI BDO MBT
US: Dow Jones Tech Spotlight --- Page 4 Recommendation: Range trade watch range limits Support: 20,452 20,400 Resistance: 20,753 / 21,00-21,200 The Dow rallied 183-pts on the nick of time to prevent a support rupture can it now push up more to imitate its last support recovery (like in Jan)? If so then it could fittingly drive a solid rally after correcting fairly well enough into its short to medium term support on the other hand if support (20,400) cracks, a pullback to 19,911-19,518 (Fibo Ret of 38.2%-50%) may be seen A preferable close over 20,753 (trading buy) would yet be needed to support an upward continuation swing towards 21,000-21,200 Given its consolidation a range trade is maintained, but its range size may now offer too much to gun for, so waiting for a range break is the likely option for now unless you try a daring buy protected by a stop at recent lows of support
Philippines: PSEi Tech Spotlight --- Page 5 Recommendation: Hold Support: 7,442 7,402 Resistance: 7,720-7,780 / 8,118 The PSEi slid 41-pts due to some profit taking actions but proceeds with its general upward swing An earlier breakout prompted a trading buy but after several days of a stretch, it had hit light overbought levels (and its spread to its 16-day remains wide) so we moved to a Hold and place stops at the 16-day MA The index may be trying to target its first resistance zone, as mentioned into our April 5 Technical Bulletin, this is placed closer to the 7,720-7,780 area Short term movements may be choppy as next resistance areas are nearby and overbought levels have been recently tagged (due to some taking a little profit) Support is currently at 7,442-7,402
Tech Spotlight --- Page 6 US ishares MSCI Philippines: EPHE Recommendation: Hold Support: 34.74-34.69 Resistance: 37.00-37.50 EPHE recouped $0.26 (+0.72%) and moves to continue with its advance An earlier break over $34.74-$35.23 offered a trading buy as a 3-month consolidation was overcome this has since been switched to a Hold due to its elevatedness Upside targets for EPHE were estimated first at $35.36 (hit) and $36.52; these are followed by $37.50 to $38.29 Support is adjusted to $35.14-$34.61 Short term movements may be choppy as next resistance areas are being hit and overbought levels are seen (either take a little profits gradually or hold to next targets and place a protective stop at support)
PLDT-US (PHI) Tech Spotlight --- Page 7 Recommendation: Take some profits or Hold Support: 33.60-31.75 Resistance: 36.00-36.94 PLDT-US rallied 0.69-pts (+1.96%) and maintains its advance after a 2-day pause After breaking over its 260-day MA and now hitting the upper bounds of an estimated channel high ($35.55-$36) and even nearing next resistance $36.94 we may have to watchful & expectant of some profit taking actions Although a Hold may yet be driven, it should be protected with a stop at short term support ($33.60 16-day MA) But this is a little distance away and prices are at menacing overbought levels this too beckons towards some gradual profit taking (maybe up to 30-50% of position) A protective stop for core positions (what you keep over the 30-50%) can be placed at the 16 to 32-day MAs Price parity of PHI to TEL stands at ($35.95*49.54= P1,780)