SM Prime Holdings Analysis
SM Prime Holdings, Inc. (SMPH) closed unchanged on Wednesday, September 16, 2020, at ₱28.50 per share, with a total turnover value worth ₱224.38 million. The main drivers were the local traders and investors.
The foreign investors printed a net foreign selling worth ₱154 million. They are still net sellers year-to-date. If you’re monitoring the foreign investors’ trading participation on SMPH, you know that they have a significant role in influencing this property stock’s daily trading sentiment. The foreign investors’ activity is one data-driven reason for you to consider the possibility of seeing an extended sideways movement with a bearish bias on SMPH.
SMPH is on the brink of breaking below the support at ₱28.50. Meanwhile, its immediate resistance is pegged near ₱33.40. If you think you have a bigger potential reward than potential loss just because the price is closer to the immediate support than the resistance, I suggest that you re-think. The “buy near support” phrase must be interpreted with logic and prudence.
Another signal that you must interpret with logic and prudence is SMPH’s low-risk level due to its historical volatility score of nearly 30 percent. By risk level, I’m referring to the erraticity of the movement of price of the stock and not your risk tolerance. This low erraticity level of SMPH tells you that it does not steeply move up and down like penny stocks.
I’d say that SMPH has not yet completely surrendered the idea of staying above the support level at ₱28.50. Its moving average convergence divergence (MACD) is still moving above the signal line. Let me remind you, however. Don’t use this single event as your only source of a buy signal. Seeing a MACD above the signal is not an absolute barometer to say that the price is poised for a rebound. Never use a standalone indicator as your only source of your data-driven conviction. It would be best if you learned how to mix and match indicators to form a more reliable and integral interpretation.
As a matter-of-factly, SMPH’s -DMI is still hovering the +DMI. Would you like to know what kind of a signal that is? That’s a bearish signal by a classical interpretation. It’s not yet completely bearish, though, because the average directional index (ADX) is still below 25 points (at 19.21 points to be exact).
Trade-Volume Distribution Analysis
Last Price: ₱28.50
Dominant Range: ₱28.50 – ₱28.65
The downtrend is more likely to continue. What made me say that? Look at the position of the dominant range. Is it closer to the intraday high or low? It’s closer to the latter. Besides, the last price of ₱28.50 is lower than the volume-weighted average price (VWAP) of ₱28.56. Those two data-driven observations are more than enough for me to say that the downtrend is more likely to continue.
True Market Sentiment – EOD (September 16, 2020)
True Market Sentiment: BEARISH
5 of the top 10 brokers registered a positive Net Amount
3 of the top 10 brokers registered a higher Buying Average than Selling Average
Top 10 Players’ Buying Average: ₱28.5476
Top 10 Players’ Selling Average: ₱28.5746
21 out of 53 participants or 39.62% of all participants registered a 100% BUYING activity
4 out of 53 participants or 7.55% of all participants registered a 100% SELLING activity
True Market Sentiment – WTD (September 14-16, 2020)
True Market Sentiment: NEUTRAL
7 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: ₱28.6316
Top 10 Players’ Selling Average: ₱28.6482
21 out of 65 participants or 32.31% of all participants registered a 100% BUYING activity
2 out of 65 participants or 3.08% of all participants registered a 100% SELLING activity
True Market Sentiment – MTD (September 1-16, 2020)
True Market Sentiment: NEUTRAL
3 of the top 10 brokers registered a positive Net Amount
6 of the top 10 brokers registered a higher Buying Average than Selling Average
Top 10 Players’ Buying Average: ₱28.5354
Top 10 Players’ Selling Average: ₱28.5366
28 out of 92 participants or 30.43% of all participants registered a 100% BUYING activity
1 out of 92 participants or 1.09% of all participants registered a 100% SELLING activity
The week-to-date and month-to-date True Market Sentiments lead me to say that the price of SMPH is more likely to move sideways with a bearish bias.
SMPH has no confirmed buy signal because its 10SMACD and Momentum Power Indicator are both bearish.
The only logical reason why you should still have SMPH by now is that your trailing stop is intact or your buy case is still, at least, 80 percent true. If you have no clue on what I have just said, it means you don’t have any risk management in your trade or investment decisions. You just rode the taxi. Sooner or later, you will be asking the driver why you’re in that car. I bet you don’t do that in real life, but why are you doing it in the stock market?
Hold your position if your trailing stop is still intact. Don’t average down. Don’t by more shares yet. Otherwise, you’re just wasting your buying power. Why do you hurry in buying more shares when there’s a data-driven method of forecasting whether the downtrend is more likely to continue?
On the other hand, do not enter a new position if you don’t have SMPH in your portfolio yet. Wait for its 10SMACD and Momentum Power Indicator to become bullish. SMPH is one of the 30 index stocks. At Equilyst Analytics, we monitor the 30 bluechip stocks for our clients. We tell them if we already see a confirmed buy signal. If there’s a confirmed buy signal, they know the best range to top up or do a test-buy. That’s our Investment Guide for Long-term Investors. We update this guide twice a day during the shortened trading hours and four times a day during the normal (pre-COVID-19) trading hours.
We have trading calculators in the TOOLS tab of our online stock market library. You can use them for free.
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