Welcome back to our EquiTalks program. We are now on our 11th episode.
Just in case you’ve missed the past few episodes, I would like to welcome you to visit our website at www.equilyst.com then click on Learn. You may click on EquiTalks Video, EquiTalks, Audio, or EquiTalks Note.
If you’d like to watch, to listen, or to read, those three media have been made available for you.
For today’s episode, I’d like to discuss SCC or Semirara Mining and Power Corporation.
Before we take a look at the chart of SCC, I’d like to give some information on how to deal with dividends.
Based on edge.pse.com.ph, SCC has a cash dividend worth 1.25 with an ex-dividend date of March 28, 2019.
Often, I get asked, “Sir, if I will buy or sell on, before, or after March 28, will I get the dividend?”
If you will buy SCC before March 28 and you will keep those shares until March 28, then those SCC shares will receive the cash dividend. However, if you will buy SCC on or after March 28, 2019, those SCC shares are no longer entitled to receive the cash dividend.
Now, for the selling side: if you’re going to sell SCC before March 28, then you lose your entitlement for the cash dividend. On the other hand, if you will sell either on or after March 28, then you will still receive a cash dividend for those SCC shares.
I do hope that’s crystal clear right now. So, those who are confused sometimes on when they are entitled to receive the dividend or not, I do wish I was able to shed some light on to that today.
SCC Stock Chart
SCC is currently trading at 22.80. It has successfully breached or pierced the resistance at 22.5; support remains near 19.90.
The acting resistance right now after that breakout is 25 per share. Realize that the current price of SCC is already moving above the 10-day simple moving average but not above the 50-day moving average. It means that while it is bullish in the short-term, SCC is still bearish in the medium and the long-term scales.
How did I say so? The price is still below the 50 SMA and the 200-day SMA. Not only that: the 200-day SMA is again acting as the cloud above the shorter-term moving average.
Before Getting That Perfect Bullish Position
So, if you are expecting SCC to become bullish not just in the short-term but also in the long-term, then SCC has to do a lot of work for you. It has to close above the long-term resistance at 29.5. It has to break that resistance out just so these moving averages will align themselves in a perfect bullish position.
How does a perfect bullish position look like? That is when the 10 SMA is above the 50 SMA, and the 50 SMA is above the 200-day SMA — green, red, blue, that’s the hierarchy.
A substantial volume supported last Friday and yesterday’s volume, (you know that SCC got a green candlestick for both days), the ascent in prices was supported by a strong volume.
How did I know that it’s a strong volume? It’s because the volume bars are above the 10-day volume average of SCC.
Yesterday, SCC also got a net foreign buying worth PHP 9 million. It is quite insignificant when compared to the participation of foreign investors among index stocks.
MACD has been bullish since it crossed above the signal line last March 15, 2019. That was also the time when the crossover above the signal line was followed through by the ascent of the price above the 10 SMA.
So, if you are familiar with the 10 SMA and MACD combo, then you may have already translated the price action last Friday as a buying signal — not to go all in, just in tranches. Remember that.
SCC, with a volatility score of 40%, maintains its low-risk level.
For the 2019 year to date, SCC has a net foreign selling.
At this moment, SCC is trading at 22.60 per share. It already has a net foreign buying worth PHP 1.2 million. Intraday high is at 22.8; intraday low is 22.50, which is also its current price at the time of speaking. Trading is happening right now; that’s why prices fluctuate.
The range that got the biggest volume and the highest number of trades as I speak right now (10:00 AM) is as follows:
22.5 already reached 39% of today’s volume, with 51 trades
22.80 is at 21%
22.75 with 14%
22.6 with 11%
With only 30 minutes past the opening bell, it’s tough to say where is the strongest range right now. For sure, many trades will happen from here onwards. Nonetheless, those are the price points that got the biggest volume and the highest number of trades.
My Overall Sentiment
I am neutral to bullish. I have some reservations that’s why I have the neutral sentiment as well. There’s a possibility for this resistance at 22.5 to be respected. It means that the price can bounce away once it hits the 22.5 level.
But we’ll find out. If the SCC traders think that the price is still not too expensive, then they might as well continue buying above 22.5.
I suggest that you continue monitoring the volume because it is my preferred indicator when it comes to forecasting if the ascent in price is more likely to continue or not.
For example, if the price is moving back and forth between 22.5 and 22.8 and you see a green volume above the 10-day moving average, then there’s a big possibility for the price to continue breaking out above 22.5 in a strong note.
However, if the price is still clinging on to 22.5, but you see that there’s a weak volume (for example), there’s a high probability then for the ascent in price not to be sustained. The price might bounce away from the resistance at 22.5 and retest the previous support at 19.90 when that happens.
Trailing Stop Loss
So, make sure that you have already familiarized yourself with the correlation between the price and the volume. You’ll never go wrong.
What should you do if the market proves you wrong? Your trailing stop loss will save you.
You’ve heard me say this over and over again with our EquiTalks episodes.
Plans of Action
If you don’t have a position yet, my advice is that you monitor the price near 22.5. Make a decision based on what you see on the price-volume distribution.
If you already have SCC, let’s say you bought above 22.5, make sure that you know where your trailing stop loss is so that you don’t rely on pure hope and prayers when things go south.
I know it’s hard to separate emotion when it comes to trading, but we have to be more logical than emotional. That’s the only way for you to build strategic trade setups when it comes to short-term trading.
Use trailing stop loss. That’s one practical way on how you can separate your emotion from logic. Besides, when you calculate the trailing stop loss, it’s a representation of the percentage of risk that you can only handle.
It doesn’t make sense doing those maths or arithmetic or whatever only to disrespect the trailing stop loss in the end, right? Why would you spend about 15 minutes trying to do the math if you won’t follow it anyway?
If you are one of our subscribers here at Equilyst Analytics, I would recommend that you post your questions and requests in our Private Clients Forum.
Remember at Equilyst Analytics, when you subscribe; you will have access to our Trade Setups for Short-Term Traders, Investment Guide for Long-Term Investors, and Stock Market Consultation. We’ve got you covered.
I also encourage you to read what’s written on those three pages so that you will realize what you’ve been missing. We do some things better than peso-cost averaging or following buy-below price.
Lastly, I have a seminar on May 4, 2019, in Makati City. When I was invited by one of the biggest online stockbrokers in the Philippines to give a 30-minute talk, it was well received, and I got so many requests to provide the complete discussion.
I could not discuss everything in just 30 minutes. I was convinced by those requests and my team to hold a complete discussion of this strategy.
This will be a 4-hour discussion in Makati. But I asked my team to limit the number of people to 30. Why?
1. I don’t want to go out of the room leaving some questions unanswered. I want to make sure that everyone’s questions have been answered before I step out of the room.
2. I also want to have a focus group discussion and one-on-one conversations with all those 30 people.
The regular learning fee is PHP 4,500.00; it’s PHP 4,000.00 for the current subscribers of Equilyst Analytics. First come, first served only, May 4, 2019, from 1 PM to 5 PM.
All of the details are on the Seminars page on our website, and then you click on the calendar for the Manila event.
You’ve heard the 11th episode of EquiTalks. I do hope I was able to help you trade independently and, hopefully, invest profitably.