DITO CME Holdings Corp. Analysis
DITO CME Holdings Corp. (DITO) surged by 9.57 percent at ₱4.12 per share on September 21, 2020. The total turnover value hit ₱497 million, with the local investors as the main trading drivers.
The foreign investors only registered ₱9.57 million of Net Foreign Buying. Even if they are net buyers year-to-date, I won’t put much significance on their participation because they are printing a relatively small foreign amount trading DITO. So, let’s move to the other parameters.
DITO draws closer to the immediate resistance at ₱4.30. Its immediate support is near ₱2.50. Once it breaks above the resistance, ₱5.60 will be the new resistance level.
Daily Volume Analysis
I do not see any pressing concern on DITO’s daily volume, at least, in the past 30 trading days. Most of its daily volume is above the 50 percent of DITO’s 10-day volume average. Why am I being particular about the daily volume being above the 50 percent of the stock’s 10-day volume average? It’s completely discussed in the online stock market course included in our stock market consultancy service.
Risk Level Analysis
The 10-day historical volatility score is near 53 percent. That’s a low-risk level. Remember, when I say risk level based on the stock’s historical volatility score, I’m referring to the erraticity of the price movement and not to your risk tolerance. If the risk level is low to moderate, that means the stock does not register relatively huge price gaps daily. I’d say it’s not a “heart attack” stock if I were to say it in the vernacular of local traders. I recommend low- to moderate-risk stocks to relatively new traders or investors. However, having a low-risk level does not automatically mean that you should buy the stock. My historical volatility-based risk level analysis is not a buy signal confirmation.
Moving Average Convergence Divergence (MACD) Analysis
The MACD line is moving above the signal line. It’s a bonus that the MACD line is already moving above the zero line. Since the last candlestick is already moving above the 10-day simple moving average (SMA), this makes my 10SMACD combo bullish.
The Momentum Power Indicator of DITO must be bullish for me to say that this company in the Services sector already has a confirmed buy signal. We’ll find out in my trade-volume distribution analysis.
Directional Movement Index (DMI) Analysis
DITO’s +DMI hovers the -DMI. That’s a bullish signal. The average directional index (ADX) at 31 points puts an extra emphasis on that bullish signal. In other words, the bullish DMI confirms the bullishness of the MACD line.
Trade-Volume Distribution Analysis
Last Price: ₱4.12
VWAP: ₱4.00
Dominant Range: ₱4.12 – ₱4.13
All four elements of my Momentum Power Indicator are bullish. Therefore, the entire Momentum Power Indicator is bullish. Please review our stock market consultancy service’s online stock market course to know what those four elements are.
DITO has a confirmed buy signal.
True Market Sentiment – EOD (September 21, 2020)
True Market Sentiment: NEUTRAL
6 of the top 10 brokers registered a positive Net Amount
4 of the top 10 brokers registered a higher Buying Average than Selling Average
Top 10 Players’ Buying Average: ₱4.0024
Top 10 Players’ Selling Average: ₱4.0163
Bonus Info:
15 out of 85 participants or 17.65% of all participants registered a 100% BUYING activity
11 out of 85 participants or 12.94% of all participants registered a 100% SELLING activity
True Market Sentiment – MTD (September 1-21, 2020)
True Market Sentiment: NEUTRAL
6 of the top 10 brokers registered a positive Net Amount
5 of the top 10 brokers registered a higher Buying Average than Selling Average
Top 10 Players’ Buying Average: ₱3.6530
Top 10 Players’ Selling Average: ₱3.6616
Bonus Info:
7 out of 105 participants or 6.67% of all participants registered a 100% BUYING activity
9 out of 105 participants or 8.57% of all participants registered a 100% SELLING activity
Despite the presence of a confirmed buy signal, the neutral True Market Sentiment in the EOD and MTD timeframes is a reminder that you should not go all-in. In simple words, it means you should only buy in tranches. As a matter-of-factly, I recommend that you buy in tranches and never go all-in regardless of what the True Market Sentiment is. What I’m saying is this neutral True Market Sentiment in two timeframes seconds the motion on tranche-buying.
Recommendations
Be vigilant. It’s not far from the possibility of seeing a reversal once the price touches the resistance at ₱4.30. So, if your allocated buying power starts at ₱100,000.00, consider dividing it into 2 to 4 tranches.
Use the first tranche to buy within prevailing the dominant range. If it breaks above the resistance and shows no sign of weakening, good for you. At least, you still have a buying power to buy more shares. If it reverses at or near the resistance level, be thankful that you didn’t go all-in. Having an investment strategy is not about pinpointing what will exactly happen in the future. It’s about preserving your capital, protecting your gains, and preventing unbearable losses regardless of what the future brings.
I said, “prevailing dominant range.” The dominant range may change by the second. If you’re one of our clients, please post a request for the latest trade-volume distribution analysis of DITO in the Stock Analysis Requests section of our Private Clients Forum so we can guide you as trading happens.
Please review our online stock market to know the other steps you need to go through before you buy your first shares of DITO. You will still have to calculate your reward-to-risk ratio, set up your trailing stop, and so forth. You can use our calculators in the TOOLS tab of our online stock market library. I can’t discuss the details to be fair to those who got their exclusive access to our online stock market course (The Evergreen Strategy in Trading and Investing in the Philippine Stock Market).
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