Metro Retail Stores Group, Inc. (PSE:MRSGI) is trading at 3.00 per share as of the time of writing this analysis. MRSGI broke below its previous support at 3.11, which now acts as its immediate resistance. The new support is near 2.53.
This intraday descent in price was matched with a bearish volume that is above MRSGI’s 10-day volume average. The intraday sentiment is strong when volume is higher than the stock’s 10-day volume average. In this case, this tall bearish volume is a confirmation of the strong appetite of MRSGI traders to sell the stock down.
On the other hand, MACD already gave an early signal for this breakdown below the uptrend channel as early as April 23, 219. That was the day when the MACD registered a death cross below the signal line.
If you’re using the Directional Moving Index (DMI) indicator as another tool to confirm the strength of the prevailing price direction, you may have also seen that DMI agrees with MACD on April 23, 2019. That was the day when the positive and negative DMI lines crossed each other.
The nearly 6-month uptrend direction of MRSGI has officially ended today as you can see on the chart. The candlestick officially broke below the uptrend channel.
MRSGI might re-test the support near 2.53. By the time the price hits that price level, RSI may have also touched the classical oversold territory by then.
On the other hand, I see a mid-term support near 2.87 (I did not plot a horizontal line on that level). Observe MRSGI if it will show signs of recovery near that area.
I am not going to factor in the foreign investors’ participation on MRSGI in my overall sentiment due to their relatively insignificant net trade on this stock. Just so you know, it appears that they’re bearish on MRSGI for 2019 YTD. Their bearish appetite on this stock started to appear dominant since the last week of March 2019.
Trade-Volume Distribution Analysis
Most Traded Prices: 3, 3.1, 3.05, 2.99, 3.01
Most Voluminous Prices: 3, 3.1, 2.99, 3.05, 3.08
The current price is below the VWAP of MRSGI. The most traded and most voluminous range is closer to the intraday low than the intraday high. These two are confirmations of the intraday bearish of MRSGI.
Sentiment of the Top 10 Players
Trading participants of MRSGI with a 100% Buying and Selling Activity as of May-07-2019 at 03:10PM:
- 23 out of 52 participants or 44.23% of all participants registered a 100% BUYING activity
- 1 out of 52 participants or 1.92% of all participants registered a 100% SELLING activity
- Top 10 Players’ Buying Average: 3.0472
- Top 10 Players’ Selling Average: 3.0489
You might want to ask, “If over 40% of today’s trade participants are 100% bullish on MRSGI, what is this stock in the red territory?”
It is because the majority of the confident buyers (those who did nothing but to buy MRSGI) do not belong to the top 10 players. In other words, their individual total turnover value is less than the individual total turnover value of the trade participants in the top 10. Therefore, the overall sentiment of the top 10 players dominates the sentiment of those outside the top 10 list.
I like checking this because it gives me an idea if there is an interesting activity happening near the support. In this case, it appears that there is. Perhaps, these confident buyers are new entrants of MRSGI whose strategy is to “buy on breakdown.” This is only a data-driven speculation, nonetheless.
Overall Sentiment and Recommendation
I’m bearish on MRSGI. Execute your trailing stop loss once it is hit. Wait for the selling appetite to weaken before you entertain the idea of entering a new position.
How would you know if the selling appetite has started to weaken? Take note of these four criteria below:
– if the last candlestick is green
– if the last price is above the VWAP
– if volume is higher than 50% of the 10-day volume average
– if the most traded and most voluminous range is closer to the intraday high than the intraday low
There are other criteria that you also need to check. I mentioned them in my other articles. Please search for my other posts.
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I hope this helps. If it does, please let me know in the comments Thank you!
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