Last July 27, 2020, I wrote “DITO CME Holdings Corp (DITO) Analysis: Buy Now or Wait Near or Below ₱2.00?” In that article, I mentioned that there was no confirmed buy signal as of that day’s market closing. During that time, the price was more likely to go down. I also advised that it’s better to consider doing a test-buy or topping up once both 10SMACD and Momentum Power Indicator of the stock are bullish. True enough, DITO went down to ₱2.52 on August 3, 2020.
How about as of the market close on August 24, 2020? Do I see a confirmed buy signal already? I’ll tell you what I see on my data-driven analysis on DITO CME Holdings Corp. (DITO).
DITO closed today, August 24, at ₱3.20-apiece, up by 1.59 percent. With a total turnover value of nearly ₱46 million, almost 98 percent of the pie belongs to the local investors. The foreign investors were not the main drivers of DITO’s trading today.
The foreign investors registered a measly net foreign buying worth ₱282,010. I’m not going to pay extra attention to foreign investors’ participation in trading DITO because it’s relatively insignificant.
DITO’s immediate support is at ₱2.50, while its immediate resistance is near 3.35. I won’t get an attractive reward-to-risk ratio if I calculate it now. Why? It’s because the last price is closer to the immediate resistance than immediate support. You may use my reward-to-risk ratio calculator from the TOOLS tab of our online stock market library.
On the other hand, it’s good to see that the last price is higher than the 10-day simple moving average and the MACD line is higher than the signal line. That’s a sign that my 10SMACD combo is bullish.
DITO has a moderate-risk level due to its 10-day historical volatility score of nearly 60 percent.
Even though the +DMI hovers the -DMI, I still can’t say with conviction that DITO’s ascent is highly sustainable because the ADX is lower than 25 points.
Do I see a confirmed buy signal? Let’s continue the discussion to my trade and volume distribution analysis first.
Trade-Volume Distribution Analysis
Last Price: ₱3.20
Dominant Range: ₱3.18 – ₱3.20
If you’re familiar with how I do my trade-volume distribution analysis to check if my Momentum Power Indicator is bullish, you might think that DITO’s Momentum Power Indicator is already bullish.
I’d say you look again. It’s not enough that the last price is higher than DITO’s volume-weighted average price (VWAP). It’s not enough that the dominant range is closer to DITO’s intraday high than the intraday low.
DITO’s Momentum Power Indicator is bearish today because today’s volume is less than the 50 percent of DITO’s 10-day volume average. Remember, all four elements of my Momentum Power Indicator must be bullish to get a bullish overall rating. You’ll learn in the online stock market course of Equilyst Analytics what those four elements are, how and when to read them, and why.
A stock must have a bullish 10SMACD and Momentum Power Indicator for me to say that it has a confirmed buy signal. In this case, you need to remain in the wait-and-see mode on DITO. There’s no confirmed buy signal yet. Besides, even if a confirmed buy signal will appear today, it’ll only be beneficial for those who already have DITO (for topping up). Still, it’s not an opportune time to enter a new position due to an unattractive reward-to-risk ratio.
True Market Sentiment – EOD (August 24, 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: ₱3.1888
Top 10 Players’ Selling Average: ₱3.1898
8 out of 40 participants or 20.00% of all participants registered a 100% BUYING activity
13 out of 40 participants or 32.50% of all participants registered a 100% SELLING activity
This bearish True Market Sentiment for today seconds the motion that there’s no need to hurry in buying DITO.
True Market Sentiment – MTD (August 3-24, 2020)
True Market Sentiment: NEUTRAL
5 of the top 10 brokers registered a positive Net Amount
5 of the top 10 brokers registered a higher Buying Average than Selling Average
Top 10 Players’ Buying Average: ₱3.0368
Top 10 Players’ Selling Average: ₱3.0364
2 out of 99 participants or 2.02% of all participants registered a 100% BUYING activity
13 out of 99 participants or 13.13% of all participants registered a 100% SELLING activity
The month-to-date True Market Sentiment on DITO is unattractive, too. It signifies indecision. I say it’s better to wait for DITO to break the resistance at ₱3.35. Then, you re-assess if its 10SMACD and Momentum Power Indicator are already bullish when it breaks the resistance.
If you already have DITO and your trailing stop is intact, I recommend holding your position. Don’t top up yet, so your buying power isn’t wasted just if the trend bends when it hits the resistance level. Once the 10SMACD and Momentum Power Indicator of DITO become bullish, especially when its EOD True Market Sentiment is also bullish, then, you may top up within the dominant range if your buying power allows it.
On the other hand, be on a wait-and-see mode if you don’t have DITO yet. Once its 10SMACD and Momentum Power Indicator turn bullish, you must first calculate your reward-to-risk ratio, followed by your trailing stop once your order is executed. Aside from my reward-to-risk ratio calculator, you will also find my trailing stop calculator in the TOOLS tab of our online stock market library.
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