Jollibee Foods Corporation (JFC) is already bearish in the short-term when it broke below the 50SMA last April 12, 2019. On the other hand, it maintains its bullish stance in the long-term as long as it’s moving above 287 apiece, which is in confluence with the current position of the 200SMA.
JFC broke below its previous support at 307 last Tuesday. It is trading at 304 per share as of closing on Wednesday.
The descent in price last Wednesday was printed with a volume that’s almost equal to its 10-day volume average. That was an indication that JFC traders were convinced to sell a significant amount of shares on the last trading day this Holy Week.
Another bearish signal is also spotted when the last price was registered below its Volume Weighted Average Price of 304.93 last Wednesday.
The acting immediate support is now positioned near 291 while the immediate resistance is 307. Should JFC regain its position above 307, that’ll make 325 as its immediate resistance level.
JFC’s MACD continues to move bearishly below the signal line. A convergence with the signal line is far from sight.
Foreign investors sold nearly half a billion pesos worth of shares in the past 6 trading days. That’s another point for the bears.
Despite having a relatively low historical volatility (which means a low-risk level for JFC), this is not a signal to hurry in topping up or entering a new position on JFC.
Price-Volume Distribution Analysis
My price-volume distribution analysis shows that the most voluminous and most traded range is between 303 and 306. Since that range is closer to the intraday low than the intraday high, it’s more likely for the descent in price to continue.
Considering all of these findings, I find it more prudent to patiently stay in a wait-and-see mode on JFC, especially if you don’t have this issue yet. Wait near 292.
However, don’t blindly do the wait-and-see stance if this stock is already trading below your tolerable risk. Execute your trailing stop loss if the latter is your case.
Remember that JFC’s cash dividend of P1.23 per share has an Ex-Div Date of April 23, 2019. Expect the price to dilute by as much as P1.23 on that day. It’s normal due to dilution. Just search for the word “dilution” on Google, Investopedia, or YouTube to learn more about it.
If you will buy before the Ex-Div Date and keep those shares at least until the Ex-Div Date, those shares will receive dividends. But if you will buy either on or after the Ex-Div Date, those newly bought JFC shares won’t receive that dividend anymore.
If you will sell shares before the Ex-Div Date, those shares won’t receive dividends anymore. However, if you will sell either on or after the Ex-Div Date, those shares will still receive dividends.
My overall sentiment on JFC is bearish. I’ve already stated some of your options above depending on whether you have JFC or not.
This is not a recommendation to buy or sell JFC. I’m just sharing with you my analysis and overall sentiment on JFC.
At the end of the day, you need to learn how to make an investment decision for yourself based on your personal financial goal, investment horizon, and risk tolerance.
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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.