Sentimental and Technical Analysis for PhilWeb Corporation (PSE:WEB)
I heard from the grapevine that local traders and investors believed that if Ferdinand Marcos, Jr. won the presidential election, it would benefit WEB. With that survey-based optimism, they started to push PhilWeb Corporation (WEB) to a higher share price as early as May 4, 2022. That’s quite noticeable if you compare the surge in volume on that day with the volume of the previous trading days.
Associating that phenomenon with Bongbong Marcos is non-quantifiable. So, let me do away with non-quantifiable speculations and bring you to what’s quantifiable, which is my data-driven analysis.
If you’ve been trading for a while like me, you know that the happy days of WEB in the Philippine stock market ended sometime in the second half of 2016. Compress your daily chart to that year if you can’t recall or imagine what I’m saying.
Then, from the last quarter of 2018 until today, WEB has been just moving sideways between P1.00sh and P4.00sh.
Just as how unprecedented the tsunami-esque lead of Bongbong Marcos in the presidential race, WEB’s breakout above the previous resistance at P3.45 was also remarkable. This situation is where newbies or beginners in the trade should police themselves. Not because the stock gapped up once, it doesn’t mean it’ll be Christmas every day.
Check some statistics to get a data-driven gut feel if those who bought WEB shares earlier than you aren’t positioning for the selldown already. May these numbers below help you.
As of closing on May 10, 2022:
– 28 of the 77 participating brokers, or 36.36% of all participants, registered a positive Net Amount
– 33 of the 77 participating brokers, or 42.86% of all participants, registered a higher Buying Average than Selling Average
– 77 Participating Brokers’ Buying Average: ₱3.95788
– 77 Participating Brokers’ Selling Average: ₱3.96173
– 5 out of 77 participants, or 6.49% of all participants, registered a 100% BUYING activity
– 19 out of 77 participants, or 24.68% of all participants, registered a 100% SELLING activity
Foreign Investors
The breakout above P2.40 last May 4, 2022 was seen as a sell-on-strength opportunity for foreign investors. Don’t be mistaken by the value of that long, southward-pointing net foreign bar, though. That was just a measly P7.23 million net foreign selling. It’s a relatively insignificant amount of trade from foreign accounts. Is it alarming? From my point of view, it isn’t, but it’s worth knowing. Today, WEB registered a net foreign selling worth of P1.6 million only.
Volume
Since May 4, 2022, WEB’s daily volume has exceeded 100% of its 10-day average. Its price’s ascent has become sustainable because it’s supported by volume. As long as the current price is higher than the previous trading day’s closing price and as long as the prevailing volume is higher than at least 50% of the stock’s 10-day volume average, the price is more likely to continue moving toward the northward direction. However, I also suggest that you check the stock’s prevailing Market Sentiment Index (MSI), which you can request in the Private Clients Forum of Equilyst Analytics if you’re one of our clients.
Moving Average Convergence Divergence
What else do you expect in the moving average convergence divergence (MACD) line of a stock going up for four consecutive trading days, with the most recent one registering a gap above the previous one? Of course, the MACD line will register a bullish divergence from the signal line. By classical (and obvious) interpretation, that’s a bullish signal. As my rule of thumb, don’t just rely on one indicator. Get a confirmation using my Dominant Range Index and Market Sentiment Index indicators. I hope you’ve already read the Subscriber’s Manual if you’re one of our clients, so you’ll understand the significance of this indicator.
Still a Newbie-friendly Stock?
With a 10-day historical volatility score of nearly 164%, WEB is far from being a newbie-friendly stock. It has an extremely high erraticity level with that 10-day historical volatility score. Elementary science taught us that hot air goes up. You got to monitor WEB’s Dominant Range and Market Sentiment Indices so you can temp-check when the cold air is starting to go down.
Is There a Confirmed Buy Signal?
Let’s look at the ratings of the six indicators that compose my proprietary methodology called The Evergreen Strategy in Trading and Investing in the Philippine Stock Market. If all of them are bullish, there’s a confirmed buy signal.
Once there’s a confirmed buy signal, you need to calculate your reward-to-risk ratio and initial trailing stop. Do a test-buy or top-up on your existing shares if and when you’re satisfied with the ratio.
Parameter 1: Is its last price moving above its 10-day simple moving average (SMA)?
Answer: YES
Parameter 2: Is its last volume bar higher than 50 percent of its 10-day volume average?
Answer: YES
Parameter 3: Is its moving average convergence divergence (MACD) above its signal line?
Answer: YES
Parameter 5: Is its Dominant Range Index bullish?
Answer: Login to your account and ask for the DRI of this stock.
Parameter 6: Is its Market Sentiment Index bullish?
Answer: Login to your account and ask for the DRI of this stock.
Need Help?
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