Rumors circulate that ABS-CBN Corporation might not get a franchise renewal before its current franchise expires in 2020. This rumor has attracted a bearish wind towards the Lopez-owned stocks such as ABS-CBN Corporation (ABS) and Lopez Holdings Corporation (LPZ).
Let me guess what else you’re thinking. You’d like to know if GMA Network, Inc. (GMA7) is a better option than ABS-CBN Corporation (ABS). GMA7 is the top-of-mind stock worthy of comparison to ABS simply because they’re the only two publicly-listed media companies in the Philippine Stock Exchange.
A better question is this: Do you really have to force yourself to choose between ABS and GMA7 or you’re better off not adding a media stock in your portfolio for now?
I’ll tell you my analysis and sentiment for each stock. Then, I’ll let you know my overall sentiment and recommendation.
First off, don’t expect my synthesis about the participation of foreign investors in these two media stocks because these two are not open to foreign investors.
I’ll begin with ABS.
ABS Technical Analysis
Last June 14, 2019, Friday, ABS closed at 16.90. That’s its lowest price in the past 10 trading years. This stock is officially trading inside the bearish channel with its longer-term simple moving averages moving above the shorter-term ones.
The acting resistance of ABS is near 19.32. Support is near 12.00. This 12.00 is a historical support that was first registered in 2005. ABS is down by 15.50 percent year to date.
Its MACD already crossed below the signal line. The conditions of my 10SMA-MACD combo (for a buy signal) have already been long time since invalidated. The downward momentum is also in a strong category. Its RSI hit the classical oversold level. Apparently, I see no sign of interest to buy ABS. By the looks of this data, ABS could go cheaper than this.
ABS Volume-Trade Distribution Analysis
ABS closed below its volume weighted average price of 17.08. The dominant range is closer to the intraday low than the intraday high. This is a pair of bearish signals. The descent in price is more likely to continue.
Most Traded Prices: 16.9, 16.88, 17.6, 16.86, 16.92
Most Voluminous Prices: 16.9, 16.86, 16.88, 17.5, 17.4
ABS Market Sentiment Analysis
I also get a bearish sentiment from my Market Sentiment Analyzer. Only 5 out of the top 10 trading participants (based on total turnover value) have a positive Net Amount and have a higher Buying Average than Selling Average.
Are you wondering why ABS ended up with a red candlestick even if almost half of last Friday’s trading participants registered a 100 percent buying activity on this stock?
I’ll tell you why. Their collective bullishness didn’t dominate because the individual total turnover of the 17 of 18 bullish trading participants is relatively small. It’s so small that it could not outpower the total turnover value of the bearish trading participants that made it in the top 10 list.
Trading participants of ABS with a 100% Buying and Selling Activity from Jun-03-2019 to Jun-14-2019 at 03:30PM:
18 out of 41 participants or 43.90% of all participants registered a 100% BUYING activity
9 out of 41 participants or 21.95% of all participants registered a 100% SELLING activity
Top 10 Players’ Buying Average: 17.7849
Top 10 Players’ Selling Average: 17.7522
I’ll tell you my overall sentiment and recommendation for ABS later. But as early as now, I think you already have an idea of my overall sentiment and recommendation for ABS.
I’ll move to my analysis of GMA Network, Inc. (GMA7) for now.
GMA7 Technical Analysis
GMA7 closed on June 14, 2019, Friday, at 5.41. It’s down by 0.55 percent year to date.
Support is near 5.00 while resistance is near 5.90. I’m presenting two charts below. One is zoomed in and one is zoomed out so you can see clearly the next support before 5.00. The support below 5.00 is near 4.10, which is where the 61.8 percent retracement of the Down Fibonacci is positioned.
The conditions of my 10SMA-MACD combo for a buy signal were recently met last May 7, 2019. Since then, MACD has remained above the signal line. The price dove below the 10-day SMA on a few occasions, however. If you are using a trailing stop loss with an applied 5 percent risk, I’m sure you have not been stopped out yet since the appearance of my confirmed buy signal in May 7, 2019.
RSI is quite distant from its classical overbought level. It gives GMA7 more chances to revisit previous highs. DMI+ is still below the DMI- but I see a formation of a bullish convergence between these two lines. I estimate that if this ascent in price of GMA7 will continue and enter the 5.60-5.70 range, it’ll establish a strong upward momentum that will increase the likelihood of piercing the resistance at 5.90.
GMA7 Trade-Volume Distribution Analysis
It closed on Friday above its volume weighted average price. The dominant range is closer to the intraday high than the intraday low. That’s a bullish pair.
Most Traded Prices: 5.41, 5.4, 5.39, 5.37, 5.37
Most Voluminous Prices: 5.41, 5.4, 5.39, 5.38, 5.37
GMA7 Market Sentiment Analysis
My market sentiment analysis is a contrarian to the bullish signals I mentioned above. I see a bearish sentiment on my Market Sentiment Analyzer. In the list of top 10 trading participants, there were many trading participants with a negative total turnover value and lower buying average than selling average.
Trading participants of GMA7 with a 100% Buying and Selling Activity from Jun-03-2019 to Jun-14-2019 at 03:30PM:
3 out of 25 participants or 12.00% of all participants registered a 100% BUYING activity
11 out of 25 participants or 44.00% of all participants registered a 100% SELLING activity
Top 10 Players’ Buying Average: 5.3676
Top 10 Players’ Selling Average: 5.3605
Overall Sentiment and Recommendations: ABS vs GMA7
I am bearish on ABS. I am bullish on GMA7.
If you still have ABS, I suggest that you sell on strength. Do not average down.
If you do not have ABS but are planning to trade it, I suggest that you stay on the sidelines for now. Entertain the thought of doing a test-buy if and when the 4-point criteria that I always mention in my daily videos for subscribers become present on ABS.
If you have GMA7, sell once your trailing stop loss is hit. You also have a data-driven reason to top-up. Top-up within the dominant range and not just at any price.
If you don’t have GMA7 but are planning to trade it, you have a data-driven reason to do a test-buy but do it within the dominant range I said above. If GMA7 starts at a price higher or lower than that range I stated above, do a fresh trade-volume distribution analysis. If you’re a subscriber, please post your request for my latest trade-volume distribution analysis in our Private Clients Forum.
Do not forget to set and monitor your trailing stop loss at all cost.
If you’re a subscriber and you have follow-up questions, please post it in our Private Clients Forum.
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I am Jaycee De Guzman, founder and Chief Executive Officer of Equilyst Analytics, Inc. My mission is to simplify stock trading and investing in the Philippine Stock Exchange using my proprietary evergreen strategy in stock trading and investing. My vision is to level up at least 1,000,000 Filipino stock traders and investors by 2030. I will make it happen.