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We are now on the ninth episode of our EquiTalks program. Today, I’d like to talk about the Metropolitan Bank and Trust Company or MBT.
In this discussion, I will be talking not only about my technical analysis. I will also check if it has dividend announcements, my overall sentiment, and some recommended plans of action or trade setups. It is regardless if you already have MBT or you still have it in your watchlist.
For 2019, MBT had one dividend announcement last February 26, which is the stock’s ex-dividend date for the PHP 1.00 per share cash dividend.
I still see here one more dividend type, which is the stock dividend. It is 13% stock dividend. However, the ex-dividend date is yet to be announced. Let’s watch out for that.
Here’s my advice: if you would like to take advantage of the stock dividend play for MBT, you should buy before the ex-dividend date so that those newly-bought shares will qualify in the computation for the stock dividend.
However, if you will buy on or after the ex-dividend date, then those new MBT shares will no longer qualify for the stock dividend. That’s for the buyer’s side.
Now, let me move on to the seller’s side. If you sell your MBT shares before the ex-dividend date, then those shares will no longer be qualified in the calculation of the dividend.
However, if you will sell on or after the ex-dividend date, then those shares will still be computed for the dividend.
MBT Stock Chart
MBT closed today (March 14, 2019) at 77.70. This red candlestick is still above the 10-day simple moving average and the 200-day SMA.
However, I prefer to see this 10 SMA moving above the 50 SMA. When that happens, and if the price is above the 10 SMA, that will put MBT in a confirmed bullish position not just in the short term, but also in the long-term scale.
But right now, technically speaking, MBT is bullish both in the short-term and in the long-term. However, the alignment of the moving averages is still not in a perfect position. So, we cannot say that it is “perfectly bullish” as far as the alignment of the moving averages is concerned.
Today’s volume is below 50% of the 10-day volume average of MBT.
What does this mean to me? If it’s a red candlestick and volume is less than 50% of the 10-day volume average of the stock, MBT investors or traders are not yet willing to zero into the idea of selling their shares.
In other words, it seems that they have not seen a strong reason for them to join the selling sentiment of the other MBT traders or investors.
So, what now? I think it can continue trading sideways.
Which Particular Range?
I think that would be between 75 and 80. Again, I see a possibility of MBT to continue trading that range.
However, that sentiment may change if MBT will start to show a volume that’s above its 10-day volume average.
Let’s say on Friday, we see a red candlestick, and the volume is above the 10-day volume average. That means then that MBT investors or traders have seen a convincing reason for them to sell their shares.
Say it would be another red candlestick for Friday and the volume is less than 50% of the 10-day volume average, then I would maintain the same sentiment.
Unless there is a significant drift in the volume, as soon as the volume moves out of the 10-day volume average, it’s either the price would continue to move downward, or it will bounce away.
Net Foreign Trade
Year to date, MBT is on a net foreign selling.
MACD remains above the signal line. Technically speaking, it is still in a bullish position. That’s the prevailing momentum right now.
MBT still has a low-risk level because of its historical volatility score of 41%.
The major support that I see here is at 75; the major resistance is at 84.70. The midterm resistance is at 79.80 or 80 per share.
Take note that this support level at 75 is the intersection between the 50 and the 200-day SMA.
Price-Volume Distribution Analysis
Remember that MBT closed at 77.70 (March 14, 2019). I’ve noticed that there’s a very slim net foreign selling worth PHP 5 million.
Now, there is one outstanding price point that got about 38% of today’s volume, and that’s the closing price, which is 77.70.
I’m not going to give you a range, but since it’s registered towards the lower half of the trading, my advice is that you monitor MBT from 77.70 below. (Its intraday low is 77.30, and its intraday high is at 78.90.)
If you can still afford to wait, wait near 75 per share — get ready for a pullback.
When the bearish volume continues once it hits 75, then I suggest that you make a downward adjustment on the price you need to monitor.
If you happen to be a subscriber of Equilyst Analytics, I strongly recommend that you post a request for my latest analysis in our Private Clients Forum so I can give you the most recent technical analysis, price-volume distribution analysis, and my top 10 players’ sentiment analysis for MBT.
Trailing Stop Loss
If you already have MBT and assuming that your average price is above or below the current rate, it’s a piece of evergreen advice to keep or stick with your trailing stop loss.
Let’s say you don’t know what trailing stop loss is, here’s my suggestion:
If your average cost is higher than 77.70, you calculate your trailing stop loss from your average price. Let’s say your average price is 80 and you can only risk up to 10% of your capital. How should you compute your trailing stop loss then?
You get 90% below 80, that’s your trailing stop loss. Of course, you will have to adjust the percentage depending on the percentage of your risk tolerance.
If you have five percent risk tolerance, the question is, what is 95% below 80, assuming 80 is your average price?
If your average price is lower than 77.70, I would suggest that you calculate your trailing stop loss not from your average price anymore, but from the current price.
If you would like to know more about this, there’s a video that I recorded and a newsletter that I wrote in Filipino. It’s available for Equilyst Analytics subscribers.
My overall sentiment for MBT is neutral to bearish. It could continue to move sideways within 75 to 80 per share.
I hope you’ve learned something today. Feel free to share this EquiTalks episode on your social media accounts.