Are We in Good Hands if We Trade MBT?

So what made Metropolitan Bank & Trust (MBT) jump from 64.80 to 69.80 per share?

I overheard that MSCI Philippines has increased the weight of MBT by 1.97 percent.

Do you know what MSCI is and its effect in the Philippine stock market?

I wrote some technical articles about MSCI Philippines in the past but I’ll simplify this for you.

Look at MSCI as one of the sources of institutional investors and fund managers to identify in which basket of stocks they should invest their clients’ money.

MSCI Philippines is a basket of Philippine stocks. As of the time of writing this article, MSCI Philippines is composed of 23 stocks. Most of which are big cap companies.

Before writing this article, I’ve posted some pieces of information in our Mentoring Forum about the effect on the price when a stock is listed in MSCI or when MSCI increases the weight of its allocation in a stock. If you’re one of my clients, please sign in and go to the Psychology and Strategies section of our Mentoring Forum. Feel free to ask follow-up questions on that thread and I’ll respond.

For the meantime, I’ll give you a freemium update on MBT.

Technical Analysis

I find it interesting to see MBT breaking out above the upper band of the downtrend channel and inching closer to the resistance at 70. It’s been a while that the share price of MBT isn’t this far above the 10 SMA. I take that as an indication of a possibly changing sentiment towards the name. If you’re my client, you know my stance when the price is above the 10SMA and when MACD crosses above the signal line regardless of whether MACD is above or below the zero line.

Volume Analysis

As of November 15, 2018, at 03:30PM, the volume of MBT is 69.02% 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

FirstMetroSec PRO – Volume Weighted Average Price

I am one of the first users of FirstMetroSec PRO. What I like about the Volume Review tab of PRO is the Volume Weighted Average Price (VWAP). It’s a real-time indicator of the average price at which a stock is traded. This is helpful especially when you’re on the buying side.

In layman’s terms, MBT closed with an average price of 68.50. Is that closer to the intraday high or low? If it’s closer to the intraday high than the intraday low, I’d say that it’s a confirmed bullish sentiment. If you are my customer and you’d want to ask me more about what I know on this topic, please post in our Mentoring Room (Private Clients Forum).

Risk Level

MBT has a LOW RISK level due to its risk percentage of 31.98%. I strongly suggest low to moderate-risk stocks for newbie investors. We are using my proprietary Risk Level calculator for our clients at Equilyst Analytics.

Foreign Fund Flow

MBT registered a Net Foreign Buying worth P100,519,449.00 as of November 15, 2018.

On a 30-day trading period, MBT is on a Net Foreign Selling worth PHP1,179,041,128.00.

Today’s significant Net Foreign Buying is a good sign of recovery.

Price-Volume Distribution

I’ve mentioned VWAP above. There’s another tool that I must have so I can trade effectively and profitably. It’s the Price-Volume Distribution chart.

Most active price point(s)/range(s): 69.65-69.85, 69.00

Here are just some of the reasons why I created this tool.

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

Trading participants of MBT with a 100% Buying and Selling Activity as of Nov-15-2018 at 03:30PM:

6 out of 77 participants or 7.79% of all participants registered a 100% BUYING activity
33 out of 77 participants or 42.86% of all participants registered a 100% SELLING activity
Top 10 Players’ Buying Average: 68.9740
Top 10 Players’ Selling Average: 68.9219

The psychological average price of the top 10 players as of Nov-15-2018 at 03:30PM is from 68.9219 to 68.9740.

Here are the reasons why I use the Top 10 Players chart when I trade.

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.

Recommendations

If you’re going to test-buy on MBT tomorrow, try to buy within the most active price points or ranges I’ve mentioned in my Price-Volume Distribution chart. Just in case MBT starts at a price higher than today’s closing, it’s still up to you if you’d like to test-buy. Make sure you know where your trailing stop loss.

Now, if you already have MBT, it’s up to you if you’d like to top-up or hold your position. If your overall sentiment on MBT is bullish based on what I’ve shared with you and you still have a relatively attractive upside percentage based on your target selling price, it’s not a bad idea to top-up. However, if your target selling price gives you a less attractive upside percentage, hold your position and sell once the price draws closer to your target selling price.

Can you use a trailing stop loss even if, let’s say, you’re a long-term investor on MBT?

Yes. Why not? Employ wide stops if you’re into long-term investing, however.

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Jaycee De Guzman

Founder and CEO at Equilyst Analytics

Experience the expertise of Jaycee De Guzman, the brain of Equilyst Analytics, renowned for his unique data analysis. He is a computer scientist and a self-taught digital marketing strategist and agriculturist. Since Equilyst Analytics’ founding in 2012, over 10,000 local and foreign clients have consulted with Jaycee de Guzman on crypto and stock investments.

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