DITO CME Holdings Corp. (DITO) went south by 2.21 percent as of market closing on July 27, 2020, Monday, with a total turnover value of ₱30 million. It closed at ₱2.66 per share from its previous closing price of ₱2.72.
Just like how local investors were the main drivers of the entire Philippine Stock Exchange today, they also spearheaded the bearish sentiment on DITO today. DITO registered a Net Foreign Selling worth a quarter million pesos only, which is relatively small compared to the absolute net foreign activity of the foreign investors in other stocks.
Last week, DITO broke below its support near ₱2.90, which is now its immediate resistance. DITO’s immediate support is positioned near ₱2.00.
Even though foreign investors are net buyers on DITO year-to-date, I’m not excited about it because it’s a relatively meager amount only that’s more or less ₱9 million. I’d say that’s a loose change. You’d say the same if you knew the power of the foreign investors.
DITO has been in the downtrend channel since the last quarter of 2018. It recovered in March 2020 when it hit its psychological bottom near ₱1.00, but it failed to sustain its ascent when it drew closer to ₱4.15. Overall, it’s still in the downtrend channel.
I wasn’t seeing any volume-related concerns on DITO until this July 2020. This month, I see lots of trading days with a recorded volume lower than the 50 percent of DITO’s 10-day average. That’s a bonus point for the bears.
Moreover, I consider DITO as a moderate-risk stock due to its historical volatility score of 63 percent. While it’s still newbie-friendly stock, volatility-wise, it doesn’t automatically mean that it’s a good stock to buy. You got to learn how to find confirmed buy signals first. At the moment, I only see bearish convergences on the histograms of the Moving Average Convergence Divergence (MACD) and the Directional Movement Index (DMI). This means the bearishness of DITO could get worse than this if this stock doesn’t win back its position above ₱2.90 with a green volume that’s preferably higher than the 50 percent of DITO’s 10-day volume average.
Trade-Volume Distribution Analysis
Last Price: ₱2.66
Dominant Range: ₱2.65 – ₱2.70
This dominant range of DITO today is closer to its intraday low than its intraday high in as far the size of the volume and number of trades are concerned. On top of that, the last price of ₱2.66 is lower than its volume-weighted average price of ₱2.67. Those are two extra points for the bears.
The 10SMACD and Momentum Power Indicator of DITO are both bearish. In short, I don’t see a confirmed buy signal for DITO in so far as today’s data is concerned.
True Market Sentiment Analysis
True Market Sentiment: BULLISH
6 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: ₱2.6736
Top 10 Players’ Selling Average: ₱2.6742
16 out of 39 participants or 41.03% of all participants registered a 100% BUYING activity
6 out of 39 participants or 15.38% of all participants registered a 100% SELLING activity
On the other hand, this bullish True Market Sentiment is a strand of hope. Hope for what? Hope that traders won’t let the price break below the mid-level support between ₱2.50 and ₱2.60. Once that range is broken down, it’ll be more likely for DITO to re-test the support near ₱2.00.
Let me say it in another way. This bullish True Market Sentiment is not a confirmed buy signal.
Let me first talk to you if you already have DITO in your portfolio and if you know what a trailing stop is.
First, is your trailing stop still intact?
If you don’t know what a trailing stop is, please read the article below first.
Continue reading if your trailing stop is still intact. You have the option to hold your position due to the bullish True Market Sentiment. However, if and when the 10SMACD and Momentum Power Indicator of DITO remains bearish (either or both) tomorrow, you may want to reduce the percentage of risk of your trailing stop. You can use my trailing stop calculator on the TOOLS tab of our online stock market library.
This is not the logical time to buy more shares of DITO. This is not the logical time to average down. I don’t recommend peso-cost averaging on DITO. Why? It’s not a rocket-science answer. It’s because there’s no confirmed buy signal, and the downtrend is more likely to continue based on my data synthesis.
Now, let me talk to you if you don’t have DITO yet, but you’re planning to enter a new position.
If that’s you, understand that there’s no confirmed buy signal yet. Remember that DITO might continue to go toward the southward direction. You don’t want to do a test-buy on a stock that’s more likely to continue to go down because you might end up justifying your mistake either with a quote of Warren Buffett or a saying that goes like this, “I’m a long-term investor, anyway.”
Once the 10SMACD and Momentum Power Indicator of DITO become bullish, calculate your reward-to-risk ratio. I also have a reward-to-risk ratio calculator on the TOOLS tab of our online stock market library. If you’re satisfied with your reward-to-risk ratio, you can do a test-buy within the dominant range of DITO at that moment. You can post a request for DITO’s latest Trade-Volume Distribution chart and statistics in the STOCK ANALYSIS REQUESTS section of our Private Clients Forum if you’re one of our clients. We can guide you as trading happens through our Private Clients Forum.
Can you tell me in the comments if you find my technical analysis on DITO helpful?
If you want to learn my methods and analyze like this, consider our stock market consultancy service at Equilyst Analytics. We’ll help you learn how to invest independently and trade tactically.