Looking for signs of market bulls

Already deep into the third week of June, we still can’t seem to see signs that will show us when market bulls (big and/or long-term buyers) will ever appear in the market soon.

In particular, the Philippine Stock Exchange index, or PSEi, closed last Friday at 4,153.11, to end lower, posting another 66.47 points loss on a weekly basis. This sent the market to just about 29.41 points away from the market low and immediate support of 4,123.70.

Trace back

On June 1, Wednesday, the market appeared strong on account of bigger foreign buying volume and value turnover. The market closed higher by 42.22 points at 4,286.46 from the level on Tuesday, which happened to be the end of May.

The market remained strong the following day, Thursday, when it continued to track higher on regular volume and value of transaction.

As a result, the market again closed higher with a gain of 38.52 points at 4,324.98. This closing index was also the high of the day.
On Friday, the market opened higher at 4,325.94 in a show of apparent strength. It hit the session’s high of 4,322.60, which was about 21.50 points shy of the market’s recorded high for the year at 4,344.10 and established on April 28.

The market that Friday, however, was actually already trading on weakness. It was losing steam. The high of 4,322.60 that was hit during the day became the market’s exhaustion point.

This resulted in the market ending lower by 27.36 points on Friday at 4,297.62, which also happened to be the day’s low.

Notwithstanding this, the market still closed higher by 23.11 points on a weekly basis. Nonetheless, this modus of trading activity in the first three days of June became the market’s pattern and direction of price movements in the next two consecutive weeks.

The market slid lower by 78.04 points at 4,219.58 for the week ending June 10, followed by another slide of 66.47 points in the following week, or for the week ending June 17.

Bottom-line spin

To recall, the market as of last Friday was just 29.41 points away from its immediate support and breakdown level of 4,123.70. Further drop in stock prices from this level may lead to the following technical support-resistance points located at 3,963, 3,873 and 3,816 respectively.

On the whole, the market is estimated to fall by a total of 448.10 points, from last Friday’s close to its estimated ultimate bottom at 3,705.10.

With the market having already dropped by no less than 144.51 points since the start of June and based on the market’s recently established pattern of rallying when hitting intermediate support and resistance points, the market may just bounce back on Tuesday.

This may sound wishful on account of the market’s poor performance that continued to compromise bullish efforts to prosper.

The recent reactive character of the market, nevertheless, may also become the stimulus that would ferret out market bulls to appear pretty soon.

One significant aspect that could possibly support the presence of bulls in the market are the silent but mounting block sales transactions that had been going on for at least the last one month or so.

These block sales were mostly done at higher-than-existing market prices, an unmistakable sign indicating the willingness of market bulls to sit out the current market instabilities in exchange for the chance to realize the perceived potential values of these stocks not too long from now.

A number of special block sales had occurred on power distributor Manila Electric Co.(MER). The transaction prices ranged from a low of P260.00 to a high of P280.00 per share.

Bank shares were also quietly bought in big volume. This involved block sales transactions on Metropolitan Bank and Trust Co. (MBT), Security Bank (SECB) and Banco de Oro Unibank Inc.

Power companies were likewise silent favorites in the block sales transactions. Among these were Aboitiz Power Corp. (AP), First Gen Corp. (FGEN), Aboitiz Equity Ventures Inc. (AEV) and Alliance Global Group Inc. (AGI).

If I were to get a cue from these block sales transactions, it may not be long that the bulls will again become the dominant force in the market.

Fun time

Let’s have some fun with the joke sent by a reader who said he had been wishing to change his legal name into something foreign-sounding after an encounter with a traffic enforcer of the Metro Manila Development Authority (MMDA).

The story went this way: His foreigner-friend, who was on the wheels, was flagged for a traffic rule violation but was not given a citation ticket.
With a pen and ticket on hand, the MMDA traffic enforcer said in authoritative tone, “Name?” The foreigner politely and promptly chattered, “Wilhelm Von Corgrinski Papakovitz.”

After some arduous moments of preliminary scribbling, the MMDA traffic enforcer (who simultaneously tucked his traffic citation ticket back to his pockets) said, “Next time be careful, okay?”

Have a great day!

(You may reach the Market Rider at [email protected] or directly at www.kapitaltek.com.)