Welcome back to our EquiTalks program. We are on the 12th episode.
A few days ago, I asked in our Facebook group if some of the members would want to post a request on which particular stock they would want me to talk about in these episodes.
One of the members requested if I could discuss one or two stocks that could be directly or indirectly affected by the elections season.
There’s one specific sector that I have in mind, and that’s the Media sector. We have two media stocks: GMA and ABS.
I’ll just talk about one. Let’s see if I could talk about the other one on the 13th or the next episode. So for the 12th episode, I’d like to discuss ABS or ABS-CBN Corporation.
ABS had one dividend announcement, but it’s already done. The ex-dividend date was on March 11, 2019, for PHP 0.55 worth of cash dividends.
On March 26, you should have your cash dividend on your portfolio if you had qualified ABS shares. If on March 27 you still don’t have the cash dividend, you should then contact your online stock broker.
Let’s say we see a future date as ex-dividend date. For the new subscribers, some of you might want to know if you’re entitled to the dividend.
If you’re going to buy before the ex-dividend date, those shares will receive the dividend. However, if you’re going to purchase shares of a dividend-issuing company either on or after the ex-dividend date, then you will not receive dividends.
Now, if you’re going to sell before the ex-dividend date, you will not receive dividends for those shares. Meanwhile, if you’re going to sell shares either on or after the ex-dividend date, then those shares are qualified for that dividend.
I am using the TradingView chart, and as of recess, ABS closed at 20.60. The immediate support is at 19.32 while the immediate resistance is at 21.95.
Unfortunately, ABS-CBN is bearish both in the short-term and long-term scales. What made me say that? Well, do you see the stock price moving below the green line (10 SMA) and the blue line (200-day SMA)?
The position of the stock price alone below the moving averages is already an indication that the stock is in a bearish channel. Plus, the position of the longer-term moving averages above the shorter-term is another confirmation that the stock is, indeed, moving inside the bearish territory.
Where should ABS be for it to regain its position above the 200-day moving average? I would prefer to see ABS breaking out above the resistance of 25.
Breaking Out Above Two Resistance Levels
What you’re thinking is as good as mine. That means to say that ABS needs to break out above two resistance levels. It has a lot of work to do.
Besides, it’s a lot closer to immediate support than to the resistance. The bias is on the bears than on the bulls. ABS needs to flex some muscles to break out.
I don’t see much volume happening on ABS if we compared what we saw between the third week of January to the third week of February. We just see topsy-turvy volume daily.
Given this kind of picture being painted by the daily volume bars, there are only things that are more likely to happen on the price of ABS. It’s either it will continue to move sideways or continue its downtrend direction and retest the support at 19.30.
Let’s also see if ABS-CBN will respect the support near 20.30. If it breaks down below this price, then it’s a confirmation that it’s really on its way to retesting the support at 19.30.
In a way, 20.30 is a precursor or a defense. Nonetheless, MACD has already been bearish since the last day of January 2019. Since then, it has never registered any attempt or any single day that it crossed above the signal line once again. It has been busy moving in a downtrend direction – increasing the gap below the signal line since January 31.
Although it has a low-risk level due to its historical volatility score of 22%, I’m not going to recommend that you trade ABS right away. This is not the kind of stock that you would like to buy right now.
The best thing you should do is to continue monitoring the price and volume correlation. If you see that there’s a demand to buy the stock up near 20.20 or 20.50 or 20.60, then I suggest that you re-evaluate the situation.
If there’s a demand coming from the volume to buy the stock at a higher price, then you may want to consider doing a test buy. That is if, and only if, you see an obvious sentiment to buy the stock at a higher price? Where will you see that? You can see that on the price-volume distribution.
As of recess, it closed at 20.60. Do not wonder why there are no foreign transactions. ABS and GMA are not open to foreign investments.
The price at 20.65 got 63% of today’s volume, seconded by 20.60 with 19%. It isn’t a voluminous day for ABS-CBN, but if I were to pick a range, that would be 20.60 to 20.65.
Instead of monitoring specific ranges, for now, observe how it draws closer to the support level.
My Overall Sentiment
My bias is really on the bear’s side on ABS. Try to catch it between 20.30 to 19.30. Wait for the price to enter that zone.
That’s my recommended plan of action, especially to those who don’t have ABS yet. Now, for those who have ABS, there’s no better suggestion than following your trailing stop loss.
There you go for ABS-CBN, this is our 12th episode for the EquiTalks.
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The Evergreen Strategy to Profit in the Stock Market
Lastly, click on Seminars and take a look at the seminar on May 4, 2019, Saturday. I will be meeting a maximum of 30 people in Makati to discuss my Evergreen Strategy to Profit in the Stock Market. It’s the complete version.
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That’s it for the 12th episode of the EquiTalks program. I do hope I was able to help you trade independently and invest profitably.