Anyone who has been following the developing story on who will the third telecommunication company be knows why the share price of ISM Communications Corporation has surged by over 295 percent from its low of 2.30 per share last October to its closing price of 6.80 last Friday.
If you think 295 percent is a marvelous increase in price, wait until you find out that ISM’s share price has ballooned by over 523 percent from its year-to-date low in the 1.30/sh.
ISM released its 3Q2018 financial report on Edge last November 6, 2018. I am not going to narrate my fundamental analysis in this article but by simply looking at its income statement you would know that its fundamentals are not your ideal fundamentals for a long-term stock.
Clearly, ISM’s ascent is driven by the hype of the “telco-serye” in the Philippines. Well, it’s not just ISM that is significantly influenced by sentiments. Almost all speculative stocks in our local bourse are driven by market sentiment and not so much by fundamentals. Technical and data analyses rule as far as speculative stocks in the Philippine Stock Exchange are concerned.
The China Telecom-Udenna Corporation tandem won the bid for the third telco this week. Also, you’ll notice that the daily volume of ISM has significantly increased relative to its historical daily volume a day after the corporate and comprehensive disclosure of Dennis Uy’s Udenna Corporation via ISM. I’ll talk more about my volume analysis shortly.
The major support of ISM is at 2.64. My 10SMA and 20SMA intersect on that level. However, that support level is protected by 4.95 and 3.76, which are in confluence with 38.2 percent and 61.8 percent Fibonacci retracements, respectively.
Meanwhile, the first resistance I see is at 8.06, followed by 9.11.
For some of you who are clingy with the classical definition of the RSI 80 and Stochastic 80 (both are overbought/sell signals by classical interpretation), I would suggest that you snub both indicators’ classical interpretation. Instead, look at the volume and the top 10 players’ sentiment.
Volume – November 9, 2018
As of November 9, 2018, at 03:30PM, the volume of ISM is 40.02% of the previous trading day. This stock’s latest volume is already above its 30-day volume average.
Remember the correlation between price and volume.
- bullish price + volume above the 30-day volume average = bullish
- bullish price + volume below the 30-day volume average = neutral
- bearish price + volume above the 30-day volume average = bearish
- bearish price + volume below the 30-day volume average = bearish
Man, you’re getting some “freemium” stuff from me!
Risk Level – November 9, 2018
ISM has an EXTREMELY HIGH risk level due to its risk percentage of 224.88%.
Are you a newbie trader who isn’t aware of most of the things I’ve mentioned above? If your answer is affirmative, you’re better off watching high-risk stocks than trading them. Trade stocks with a risk level that is aligned with your risk tolerance. If you’re one of our clients at Equilyst Analytics, you may request for the stock’s Risk Level chart in our Private Clients Forum.
Now, how did ISM get this extremely high risk level?
Get this. ISM was moving sideways from July to October before the price surged in the last week of October. In a matter of four weeks, the price elevated by nearly 300 percent. If the price moves that fast in a relatively short period of time, expect that the risk level of the stock to shoot up.
Foreign Fund Flow – November 9, 2018
ISM registered a Net Foreign Buying worth P7,851,242.00 as of November 09, 2018.
On a 30-day trading period, ISM is on a Net Foreign Selling worth PHP11,050,587.00.
Historically speaking, ISM wasn’t a foreign investors’ favorite. In my Foreign Fund Flow chart, I’m showing you that the foreign investors had a bullish appetite on ISM last November 7, 2018. Last Friday’s Net Foreign Buying is relatively small though.
When foreign investors start to become interested in a speculative stock, consider adding that stock in your watchlist. I’m not suggesting you should trade ISM. What I’m telling you is one of the signs that you need to look for when filtering stocks for short-term trading purposes.
Price-Volume Distribution EOD – November 9, 2018
Pay attention to the price points with the longest green bar (that represents volume) and the highest number of trades. The price ponts with the highest number of trades and the biggest volume were the actively traded price points. They were the favorites last Friday. So if you’re going to position your buying or selling price, just pay attention to the longest bars.
If you are my client at Equilyst Analytics, you can post in the Private Clients Forum and say, “Jaycee, please post the latest Price-Volume Distribution chart for stock ____.”
Would you like to know the best part?
I monitor some stocks for short-term trading.
You don’t need to request for the PVD chart of those stocks that are in our Short-Term Trading table. I regularly post the PVD chart of those stocks in the forum.
I developed this tool and use it to help my clients trade better than the outsiders of Equilyst Analytics because of these reasons.
- It helps us identify reversals, divergences, or false breakouts.
- It shows at a glance the prices that got the biggest volume with the highest number of trades.
- It helps us see if the majority of the volume is registered near the intraday high, intraday low, or median. The price bar at the top of the chart represents the intraday high. The price bar at the bottom represents the intraday low.
- It gives us a clue if cross trades happened at a certain price.
- This chart helps us decide where we should place our buying or selling price because we can see the prices that got the biggest volume with the highest number of trades at a glance.
Top 10 Players EOD – November 9, 2018
Trading participants of ISM with a 100% Buying and Selling Activity as of Nov-09-2018 at 03:30PM:
- 9 out of 91 participants or 9.89% of all participants registered a 100% BUYING activity
- 19 out of 91 participants or 20.88% of all participants registered a 100% SELLING activity\
- Top 10 Players’ Buying Average: 6.4301
- Top 10 Players’ Selling Average: 6.4513
The psychological average price of the top 10 players as of Nov-09-2018 at 03:30PM is from 6.4301 to 6.4513.
Top 10 Players WTD – November 5-9, 2018
Trading participants of ISM with a 100% Buying and Selling Activity from Nov-05-2018 to Nov-08-2018 at 03:30PM:
- 5 out of 113 participants or 4.42% of all participants registered a 100% BUYING activity
- 7 out of 113 participants or 6.19% of all participants registered a 100% SELLING activity
- Top 10 Players’ Buying Average: 5.8296
- Top 10 Players’ Selling Average: 5.8292
The psychological average price of the top 10 players from Nov-05-2018 to Nov-08-2018 is from 5.8292 to 5.8296.
Why did I develop this Top 10 Players chart?
- It helps us see if the top 10 brokers of the stock are buying the dips, selling the rips, or moving sideways.
- It ranks all of the brokers who have traded the stock as of the time of checking/
- It tells us the buying and selling average of each of the top 10 players of the stock on a real-time basis.
- It tells us the psychological average price of the top 10 players of the stock.
- It tells us the buying average and selling average of each of the top 10 players.
- It tells us the cumulative buying average and cumulative selling average of the top 10 players.
If you’re one of my clients, please read the Quick Start Guide and Newsletter Vol 1 No 21. I have expounded this Top 10 Players chart in those guides.
Recommendation
If you’re here looking for words such as “buy at” and “sell at,” I’m going to disappoint you. Spoonfeeding is not my teaching style. Throwing data to my customers without explaining its significance isn’t my style either. I deliver well-thought of analysis. For someone who exercises his cognitive ability, you can make a confident and risk-reduced investment decision for yourself through my analysis.
Last Friday’s ascent in price was supported with a bullish volume. I see a bullish sentiment on my Top 10 Players charts both on the EOD and WTD time periods. The price points with the biggest volume and the highest number of trades are registered on the upper half of my Price-Volume Distribution chart – and that is bullish for me. Foreign investors have made their presence felt in the past trading days. Just keep in mind that ISM has an extremely high risk level. It’s the highest risk level in my Risk Level calculator.
Calculate your reward-to-risk ratio. If the price will hit the resistance at 9.11, we’re locating at an upside percentage of 25 percent. But if ISM drops on Monday and revisits 4.95, that’s a downside percentage of roughly 27 percent.
Whether you want to enter a new position or hold your position on ISM, my recommendation is that you apply a trailing stop loss.
Please read Newsletter Vol 1 No 13 if you’re one of my clients. I wrote in Tagalog what a trailing stop loss is, how to compute it, and why you should ALWAYS use a trailing stop loss, especially when you do short-term trading.
All of my proprietary tools are well-documented in the Quick Start Guide for EquiPicks subscribers. That guide is more than enough but I also write newsletters. On top of all of that, we have a Private Clients Forum where I post updates on stocks that are in my watchlist for short-term trading and long-term investing. I maintain one table for stocks for short-term trading and another table for stocks for long-term investing. EquiPicks is a service that includes guidance on short-term trading, long-term investing, and mentoring.
If you like my style, methods, tools, and attitude in teaching you how to trade and invest in the stock market, it’s best for you to subscribe to EquiPicks as soon as you can so you’re not missing the opportunities I’ve been sharing with my clients.
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