Ayala Land (ALI) Technical Analysis: Options for Short-term Traders and Long-term Investors

Ayala Land, Inc. (ALI) Technical Analysis

Ayala Land, Inc. (ALI) is the second most active, third top traded, and fifth top gainer as of closing on Tuesday, November 10, 2020, after printing an impressive ₱1.23 billion total turnover value (TTV), which is 9.23 percent of the Philippine Stock Exchange Index’s (PSEi) TTV of ₱12.98 billion. Ayala Land closed today at ₱37.75, up by 8.79 percent.

Ayala Land shows several bullish indicators. One is its green last candlestick that’s moving higher than its 10-day simple moving average (SMA). Another one is its MACD line trading above the signal line. This combination makes a bullish 10SMACD, a key element to seeing a confirmed buy signal as far as my proprietary methodology is concerned.

Meanwhile, the foreign investors showed some bullish moves when they registered a net foreign buying worth ₱484 million, which is 39 percent of ALI’s TTV today. It was a very close fight between the local and foreign investors regarding dominance based on their percentage of share on the stock’s TTV. In the end, the local investors won the race as the bigger trader as they transacted a bigger amount than the foreign investors to the tune of a little over ₱100 million.

Today’s green volume bar is higher than 100 percent of ALI’s 10-day volume average. It is also the biggest daily volume bar of ALI since September 3, 2020, and the biggest green volume bar since June 1, 2020.

Despite today’s significant ascent, the foreign investors remain as net sellers year-to-date. I am not expecting a one-day transaction to overwrite three quarters’ worth of net foreign selling, nonetheless.

Ayala Land still possesses the moderate-risk category based on its 10-day historical volatility score of nearly 64 percent. I prefer that this stock remains within the low- to moderate-risk level than seeing its historical volatility higher than 70 percent. A gently moving stock is preferred over an erratic one if you put so much value on peace of mind.

The DMI chart confirms the strong upward momentum as the +DMI hovers the -DMI together with the ADX at nearly 28 points.

This property stock is on the brink of breaking above the immediate resistance at ₱38.00, a precursor to ₱42.60. If the investors will initiate a sell-off near the immediate resistance, watch out for the immediate support near ₱34.40, a precursor to ₱31.80.

Trade-Volume Distribution Analysis

Last Price: ₱37.75
Intraday Low: ₱35.15
Intraday High: ₱37.75
VWAP: ₱36.43
Dominant Range: ₱36.10 – ₱37.75

The overall Momentum Power Indicator is bullish because all of its four elements are bullish. Please watch our online stock market course (for our clients only) to know what those four elements are and how to check their status.

If ALI starts at a price lower than the lower bond of this dominant range, I recommend that you watch out for the second dominant range between ₱35.50 and ₱35.90.

True Market Sentiment – EOD (November 10, 2020)

True Market Sentiment: BEARISH
4 of the top 10 brokers registered a positive Net Amount
4 of the top 10 brokers registered a higher Buying Average than Selling Average
Top 10 Players’ Buying Average: ₱36.3621
Top 10 Players’ Selling Average: ₱36.3209
4 out of 85 participants, or 4.71% of all participants, registered a 100% BUYING activity
38 out of 85 participants, or 44.71% of all participants, registered a 100% SELLING activity

True Market Sentiment – WTD (November 9-10, 2020)

True Market Sentiment: BEARISH
3 of the top 10 brokers registered a positive Net Amount
3 of the top 10 brokers registered a higher Buying Average than Selling Average
Top 10 Players’ Buying Average: ₱35.8149
Top 10 Players’ Selling Average: ₱35.7826
5 out of 90 participants, or 5.56% of all participants, registered a 100% BUYING activity
34 out of 90 participants, or 37.78% of all participants, registered a 100% SELLING activity

True Market Sentiment – MTD (November 3-10, 2020)

True Market Sentiment: NEUTRAL
6 of the top 10 brokers registered a positive Net Amount
2 of the top 10 brokers registered a higher Buying Average than Selling Average
Top 10 Players’ Buying Average: ₱34.6849
Top 10 Players’ Selling Average: ₱34.8837
3 out of 103 participants, or 2.91% of all participants, registered a 100% BUYING activity
34 out of 103 participants or 33.01% of all participants registered a 100% SELLING activity

Surprisingly, none of ALI’s True Market Sentiment across three timeframes showed a bullish sentiment. While the ascent of ALI’s price is more likely to continue based on the bullishness of its 10SMACD and Momentum Power Indicator, I would recommend that you pay close attention to your trailing stop. We should not disregard the possibility of a sell-off at any of the resistance levels.

Recommendations

Suppose you already have Ayala Land in your portfolio and your trailing stop is intact. If that’s the case, I give you two options depending on your risk tolerance.

Low- to Moderate-Risk Investors or Traders: Hold your position. There’s no need to reduce the percentage of risk on your trailing stop since its 10SMACD and Momentum Power Indicator are bullish. Remember to do an upward adjustment on your trailing stop when the price goes higher. Use my trailing stop calculator.

High- to Extremely-High Risk Investors or Traders: Buy in tranches within the primary and prevailing dominant range if ALI will start by the next trading day within that primary dominant range. If it starts at a price lower than the primary dominant range, refer to the secondary dominant range I mentioned above. If the price retreats further, it’s best to ask for our latest analysis in our Private Clients Forum’s Long-term Investing section. You may also refer to our latest update in our Investment Guide for Long-term Investors. We automatically analyze and update our recommendations for all 30 index stocks (ALI is one of them) in that investment guide.

Follow the same recommendations if you’re yet to enter a new position on Ayala Land. However, it would help if you calculated your reward-to-risk ratio before you do a test-buy within the prevailing dominant range. The calculation of your reward-to-risk ratio is a non-negotiable requirement. It is a must, so you will know if you’re vying for a bigger potential gain than the potential loss. You may use my reward-to-risk ratio calculator.

Lastly, I’d like to reiterate that the dominant range changes by the second. I check the prevailing dominant range before I buy or sell a stock. Request your stock’s latest dominant range in our Private Clients Forum if you’re already one of our clients.

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Jaycee De Guzman

Founder and CEO at Equilyst Analytics

Experience the expertise of Jaycee De Guzman, the brain of Equilyst Analytics, renowned for his unique data analysis. He is a computer scientist and a self-taught digital marketing strategist and agriculturist. Since Equilyst Analytics’ founding in 2012, over 10,000 local and foreign clients have consulted with Jaycee de Guzman on crypto and stock investments.

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