GMA Network, Inc. closed on Tuesday, July 14, 2020 at ₱5.77 per share, which is 13.23 percent lower than the previous closing price of ₱6.65 per share. Its total turnover value is still relatively sizable at ₱129,376,245.00 compared to the trading days prior to the franchise-related concern of ABS-CBN Corporation (ABS).
Don’t expect participation from the foreign investors since media companies’ common shares are not open to foreign investors.
Traders attempted to touch the intraday high of ₱6.53 again today, but it failed to get past that resistance level. In fact, GMA7 also failed to hold above its previous immediate support at ₱5.90. The acting immediate resistance now is at ₱5.90, while the immediate support is at ₱5.48.
The Directional Movement Index of GMA7 is already showing a formation of a bearish convergence between the +DMI and the -DMI.
Trade-Volume Distribution
Last Price: ₱5.77
VWAP: ₱6.07262
Dominant Range: ₱5.75 – ₱5.77
I see two bearish signals on my Trade-Volume Distribution analysis for GMA7. Firstly, the last price of ₱5.77 is lower than GMA7’s volume-weighted average price of ₱6.07. Secondly, its dominant range of ₱5.75 – ₱5.77, relative to the location of the last price, is closer to the intraday low than the intraday high.
True Market Sentiment
True Market Sentiment: NEUTRAL
- 6 of the top 10 brokers registered a positive Net Amount
- 2 of the top 10 brokers registered a higher Buying Average than Selling Average
- Top 10 Players’ Buying Average: ₱6.0759
- Top 10 Players’ Selling Average: ₱6.0835
Bonus Info:
17 out of 61 participants or 27.87% of all participants registered a 100% BUYING activity
3 out of 61 participants or 4.92% of all participants registered a 100% SELLING activity
I see that some traders bought today’s dips as can be seen by the 17 out of 61 trading participants who registered a 100 percent buying confidence on GMA7. Those 6 brokers’ total turnover value is relatively slim that’s why they failed to outweigh the bearishness of the other trading participants with a relatively bigger total turnover value.
Recommendations
I’ll give a separate recommendation for those of you who already have GMA7 and those of you who are yet to buy GMA7.
If you already have GMA7 and if your trailing stop is still intact, I don’t recommend that you buy the dips because the downtrend is more likely to continue. Given all of the technical indicators I mentioned above, GMA7 has a bearish 10SMACD and Momentum Power Indicator. Besides, the neutral True Market Sentiment is not enough to boost your confidence to buy more for less. As far as my strategy is concerned, buying the dips when the downtrend is more likely to continue is a waste of buying power. While it’s true that no one can pinpoint where the price will actually go, it’s more prudent to be data-driven in your approach so you don’t make an investment decision based on gut feel or instinct alone. In addition to that, it’s also a logical option to reduce the percentage of risk on your trailing stop. So, between doing peso-cost averaging and reducing the percentage of risk of your trailing stop on GMA7, I’d recommend the latter over the former.
Now, I’ll give my recommendation for those who are still in the planning stage to buy GMA7. Given all the bearish indicators and the lack of a confirmed buy signal for GMA7, I’d recommend that you add GMA7 in your watchlist for now but not in your portfolio yet. Monitor it. Be on a wait-and-see mode. Entertain the idea of doing a test-buy within the dominant range of GMA7 if, and only if, its 10SMACD and Momentum Power Indicator are both bullish, and if you’re satisfied with your reward-to-risk ratio with respect to the distance of the prevailing price to GMA7’s immediate support and resistance. Calculating your reward-to-risk ratio is always an extra process I recommend to those who are yet to enter on a new position in any stock. The rationale is for you to know if you’re vying for a bigger potential reward than the potential risk. It’s not worth it to chase a rat while a lion is hunting you down, so to say.
I hope my technical analysis of GMA7 helps you make a data-driven decision based on your investment horizon and risk tolerance. Feel free to use the tools that I created and uploaded on the first online stock market library in the Philippines. If you’re one of our clients at Equilyst Analytics and if you have further questions regarding this article, please log into your account and post your question in the Stock Analysis Requests section of our Private Clients Forum.
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