Profits in a trendless market

Given last week’s trading results, it appears that investors may have to endure a further consolidation of stock prices and experience more uneventful trading days ahead.

After an impressive gain of 104.14 points or 1.51 percent to start the week last Monday, the market was immediately pulled down on Tuesday and even lower on Wednesday. Whatever gains that were left, along with the little that the market regained last Thursday, were all lost by Friday.

As a result, the market ended with a weekly loss of 13.89 points or 0.2 percent as it settled at 6,880.34. The ratio between the market’s average daily volume of 1.49 billion shares and average daily value turnover of P7.92 billion last week was also rather low. This meant trading was more likely confined to first and second liner stocks, or companies with higher share prices, thus, the resulting low ratio of volume to sales.

Gainers and losers

But no matter how the market behaves, there will always be winners and losers.

Marcventures Inc. (MARC) was among the market’s top price gainers last week. In uneventful trading, it registered an impressive performance. At the traded price of P5.76 a share, MARC was up as much as 13.61 percent for the week. And due to the price movements of nickel in the international market, the share price of MARC was already strong as early as four weeks ago. Thus, if bought then, it was still up 17.31 percent as of last week.

Nickel Asia Corp. (NIKL) did well, too. Engaged as well in the mining and sales of nickel, it rose 6.87 percent at last week’s price of P38.50 a share and rose by 15.77 percent from four weeks ago.

Semirara Mining Corp. (SCC), the coal mining firm, is another example. At P379 a share, it was up 7.6 percent as of last week. When bought four weeks ago, it was still up by 3.89 percent.

There were equally interesting trading gains in other sub-sectors of the market. In the staid telecommunications sector, for instance, Globe Telecom (GLO) was quietly making headway. At the price of P1,862 a share, it was up 6.64 percent as of last week. And if bought four weeks ago, it was up 15.77 percent.

Next is Manila Water Co. Inc. (MWC). At P27.10 a share, it was up 4.92 percent for the week and 6.95 percent from the level four weeks ago. Not all top price gainers last week, however, were gainers if compared to prices four weeks ago.

One example is Double Dragon Properties Inc. (DD). It was up 4.56 percent last week at the price of P7.57 a share but it was down 5.14 percent if compared to the price four weeks ago.

Another is Alliance Global Group Inc. (AGI). At its price of P27.85 a share, it was up 4.5 percent last week, but down 2.96 percent from four weeks ago.

Likewise, some top losers last week were not necessarily losers. Alliance Select Foods International Inc. was one example. Because of an ongoing corporate dispute, its share price has been volatile. It was down 6.16 percent last week at the price of P1.37 a share. But those who bought the shares four weeks ago gained 3.79 percent.

D&L Industries Inc. (DNL) is another example. It was down 4.28 percent last week at the price of P10.74 a share but up 8.48 percent from four weeks ago.

Next is Top Frontier Investment Holdings Inc. (TFHI). As of last week, its share price was down 3.97 percent at the traded price of P145 a share but there was a gain of 5.45 percent from four weeks ago.

Chemrez Technologies Inc. (COAT), a subsidiary of DNL, was also among the top price losers last week. At its traded price of P5.22 a share last week, it was down 6.79 percent. Among the market’s top price gainers since December of last year, COAT prices were still up 14.73 percent from four weeks ago.

Not as fortunate was 8990 Holdings Inc. (HOUSE). It was not only a price loser last week but also a loser for the four-week period. It was down 4.84 percent last week at the traded price of P7.28 a share, and down 11.86 percent from four weeks ago.

Bottom line spin

Really, there is money even in a trendless market. The trading profits do not necessarily come from the trading play of speculative stocks but from the price movements of first and second line stocks. Technical analysis can come in handy as it can supposedly  capture exactly when the prices of stocks are about to move up or down.

Actually, fundamental analysis can do the same. While it “can barely tell when the price movement of a stock will begin or how far prices will travel,” fundamental analysis (especially in combination with the bottom-up method) “can predict price direction and its general magnitude.”

The writer is a licensed stockbroker of Eagle Equities Inc. You may reach the Market Rider at [email protected] , [email protected] or at www.kapitaltek.com