PLDT (TEL) Analysis: Can It Hold the Support at ₱1,286.00?

PLDT (TEL) Analysis

PLDT, Inc. (TEL) closed on October 9, 2020 at ₱1,310.00 per share, up by 0.77 percent, with a total turnover value of ₱188 million. The cross trades amounted to ₱78.50 million.

Foreign investors were the main drivers of the trade on Friday. Despite the positive Day Change on the share price of PLDT, the foreign investors were net sellers amounting to ₱94.70 million. That’s a relatively significant amount. They’ve been net sellers for 20 consecutive trading days already. They’re net sellers year-to-date, too.

Those 20 consecutive net foreign selling days caused the price to move in a downtrend channel toward the support at ₱1,286.00. The immediate resistance is at ₱1,400.00.

The last candlestick is moving below the 10-day simple moving average, and the MACD line is trading below the signal line. That makes a bearish 10SMACD combo. At this early, I’d like to say that I see no confirmed buy signal for PLDT yet. As far as Equilyst Analytics’ trading and investment strategy is concerned, our buy signal is present when the 10SMACD and Momentum Power Indicator of the stock are both bullish.

If the price breaks below the immediate support, ₱1,138.00 will be the next support. If the price sees ₱1,286.00 as strong support and breaks out above ₱1,400.00, ₱1,489.00 will be the next resistance.

Despite the bearish sentiment of the foreign investors on PLDT year-to-date, this telecom company remains a low-risk stock as far as the erraticity of its price movement is concerned. By risk level, please take note that I’m not referring to your risk tolerance or risk appetite but the erraticity of the stock’s price movement. If the stock has a 10-day historical volatility score of less than 50 percent, it’s a low-risk stock. It means its price does not change abruptly and erratically.

I would recommend low- to moderate-risk stocks to new traders or investors. Take note that when I say “recommend”, I am not saying you should buy the stock right away. You need to check if there’s a confirmed buy signal like I mentioned above. You may add the stock in your watchlist if it has no confirmed buy signal yet (as long as you have an available slot in your watchlist).

I would recommend that you monitor up to five (5) stocks in your watchlist. That’s the realistic number of stocks that you can monitor with focus.

Meanwhile, PLDT’s directional movement index (DMI) is still bearish, but the downtrend movement is still not very strong since the average directional index (ADX) is still at 15 points. The value of the ADX will surely draw closer to 25 points if and when the price breaks below the immediate support at ₱1,286.00.

Trade-Volume Distribution Analysis – PLDT

Last Price: ₱1,310.00
VWAP: ₱1,308.82
Dominant Range: ₱1,309.00 – ₱1,310.00

I said above that the stock must have a bullish 10SMACD and Momentum Power Indicator for me to issue a confirmed buy signal. We already know that PLDT has a bearish 10SMACD combo. For educational purposes, let’s find out the status of its Momentum Power Indicator.

Surprisingly, all four (4) elements of the Momentum Power Indicator of PLDT are bullish. Therefore, PLDT got a bullish Momentum Power Indicator. Is it logical to buy PLDT then? As I said, BOTH 10SMACD and Momentum Power Indicator must be bullish to have a confirmed buy signal (as far as my methodology is concerned).

I would recommend that you closely monitor the price, especially once it inches closer to ₱1,340.00, which is where the 10-day simple moving average is closest. If and when that happens, let’s see if MACD will register a golden cross above the signal line. At this point, I see no formation of a bullish convergence between MACD and the signal line. So, continue monitoring if you’re interested in the name.

True Market Sentiment – EOD (October 9, 2020) – PLDT

True Market Sentiment: BEARISH
5 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: ₱1308.8897
Top 10 Players’ Selling Average: ₱1308.8453
16 out of 38 participants, or 42.11% of all participants, registered a 100% BUYING activity
5 out of 38 participants, or 13.16% of all participants, registered a 100% SELLING activity

True Market Sentiment – WTD (October 5-9, 2020) – PLDT

True Market Sentiment: NEUTRAL
5 of the top 10 brokers registered a positive Net Amount
6 of the top 10 brokers registered a higher Buying Average than Selling Average
Top 10 Players’ Buying Average: ₱1319.2554
Top 10 Players’ Selling Average: ₱1317.0505
30 out of 72 participants, or 41.67% of all participants, registered a 100% BUYING activity
1 out of 72 participants, or 1.39% of all participants, registered a 100% SELLING activity

True Market Sentiment – MTD (October 1-9, 2020) – PLDT

True Market Sentiment: NEUTRAL
5 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: ₱1325.8586
Top 10 Players’ Selling Average: ₱1324.5989
30 out of 81 participants, or 37.04% of all participants, registered a 100% BUYING activity
2 out of 81 participants, or 2.47% of all participants, registered a 100% SELLING activity

It’s a topsy-turvy True Market Sentiment across three timeframes. It signifies that even the top 10 players of PDLT are eaves-dropping with each other. I would suggest that you do the same. Don’t hurry. Don’t get too excited trading PLDT.

Recommendations

Aside from the objective recommendations I’ve already stated above, I’d recommend that you respect your trailing stop if you have PLDT and your trailing stop is still intact. If you’re using a trailing stop, you don’t need to ask me or anyone if you should sell your PLDT shares. If your trailing stop is intact, hold your position. Otherwise, sell once it’s hit.

Suppose you’re using a trailing stop. If you have a relatively sizable position on PLDT and you’re a low-risk investor, I’d recommend that you trim your losses. Hold your position if you’re a high-risk investor. The bottom line is that you should not add more shares yet. It’s a waste of buying power when you buy even when there’s no confirmed buy signal. I don’t subscribe to the idea of peso cost averaging. Peso cost averaging is buying an equal amount of shares regularly regardless of the price of the stock. Read some related articles below so you’ll see through my eyes my reason for not using peso cost averaging.

4 Reasons Why You Must Stop Using a Buy Below Price and a Target Selling Price

How Does Peso-Cost Averaging Work?

How to Invest Better than the Peso-Cost Averaging Method

Peso-Cost Averaging at Buy Below Price: Nakakatulong Ba Talaga?

Now, let’s say you don’t have PLDT in your portfolio yet. Should you do a test-buy on Monday regardless of the price? Again, as far as my methodology is concerned, I recommend that you stay in a wait-and-see mode. Look for signs of a confirmed buy signal. If you’re one of our clients at Equilyst Analytics, refer to our Investment Guide for Long-term Investors’ table. We update that table twice a day with our recommendations for each of the 30 blue-chip companies. Refer to the sample table below so you can visualize how our investment guide for long-term investors looks like.

NOTE: View the table in a landscape mode if you’re using a smartphone. Swipe or glide from right to left to view the other columns once the table is loaded. The numbers on the table are outdated by now. This is a demo only.

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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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