BPI Technical Analysis: Buy Before Foreign Investors Become Net Buyers?

Bank of the Philippine Islands (BPI) Technical Analysis

The Bank of the Philippine Islands (BPI) is still down by 5.90 percent year-to-date from its 2019 year-end closing price of ₱87.90. BPI closed at ₱83.00 on November 16, 2020, up by 1.59 percent. Even though it’s down year-to-date, it’s been trading above its 10-day simple moving average (SMA) since October 30, 2020.

Monday’s total turnover value (TTV) reached ₱482.50 million. However, the foreign investors did not give significant buying support since they registered a net foreign selling worth ₱80.60 million. Foreign investors are net sellers year-to-date. This event is not good news for long-term investors. BPI is an index or a blue-chip company. Foreign investors go heavy on blue-chips. Unfortunately, they’ve gone heavy in terms of selling on BPI.

On the other hand, I see no volume-related concern on BPI since its daily volume is always higher than the 50 percent of its 10-day volume average.

Meanwhile, BPI maintains its low-risk level because it has a 10-day historical volatility score of 42 percent. By risk level, I’m referring to the price fluctuation over the past 10 trading days. In other words, BPI does not fluctuate erratically relative to its previous 10-day average historical volatility.

BPI is bullish in the short-term because it’s trading higher than its 10-day SMA, and its MACD is moving above its signal line. The strength of its upward momentum seems strong since its +DMI is still moving above the -DMI and its ADX is higher than 25 points.

BPI’s immediate support sits near ₱78.00, while its immediate resistance is near ₱87.00.

Trade-Volume Distribution Analysis

Last Price: ₱83.00
Intraday Low: ₱79.50
Intraday High: ₱84.00
VWAP: ₱81.12
Dominant Range: ₱83.00 – ₱83.00

BPI’s Momentum Power Indicator is also bullish. The last price is higher than its volume-weighted average price. Also, its dominant price is closer to the intraday high than its intraday low.

Should BPI starts at a price lower than ₱83.00 by the next trading day, watch out for the secondary dominant range between ₱79.95 and ₱80.20. Nonetheless, this dominant range is subject to change. It’s best to ask for our latest trade-volume distribution analysis in our Private Clients Forum if you’re one of our clients.

True Market Sentiment – EOD (November 16, 2020)

True Market Sentiment: NEUTRAL
4 of the top 10 brokers registered a positive Net Amount
7 of the top 10 brokers registered a higher Buying Average than Selling Average
Top 10 Players’ Buying Average: ₱81.2429
Top 10 Players’ Selling Average: ₱81.1051
16 out of 64 participants, or 25.00% of all participants, registered a 100% BUYING activity
11 out of 64 participants, or 17.19% of all participants, registered a 100% SELLING activity

True Market Sentiment – MTD (November 3-16, 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: ₱81.3417
Top 10 Players’ Selling Average: ₱81.6223
4 out of 101 participants, or 3.96% of all participants, registered a 100% BUYING activity
23 out of 101 participants or 22.77% of all participants registered a 100% SELLING activity

The foreign investors’ anemic appetite to buy BPI reflects on the topsy-turvy True Market Sentiment across two timeframes. This True Market Sentiment will guide you on your next investment decision depending on your risk tolerance. In the Recommendations part of this write-up, I’ll tell you how you can incorporate the True Market Sentiment in your decision.

Recommendations

Suppose you’re a low-risk investor and your trailing stop is intact. Despite the appearance of a confirmed buy signal (bullish 10SMACD and Momentum Power Indicator), you have the option to hold your position since the True Market Sentiment of two timeframes is bearish. If you choose to do that, please ensure that you continue to do an upward adjustment on your trailing stop every time the stock registers a price higher than the base price you used in the most recent recalculation of your trailing stop.

I know that this recommendation can sound a lot, especially if you haven’t watched the online stock market course I’ve recorded. I have a proprietary methodology explained in Taglish and English in our online stock market course at Equilyst Analytics, which is exclusively available for our clients only.

On the other hand, you may buy in tranches if you are a high-risk investor or trader since there’s a confirmed buy signal, anyway.

Now, what if you don’t have a position on BPI yet? If that’s your case, you may also consider the same recommendation for those who already have it.

Remember to ask for our latest analysis and recommendation in our Private Clients Forum as trading happens so we can guide you. By the way, since BPI is an index stock, we automatically push updates for this stock in our Investment Guide for Long-term Investors twice a day. You’ll see our latest analysis and recommendation in that table, together with the 29 other blue-chip or index stocks.

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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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