AllHome Corp. (HOME) Analysis
AllHome Corp. (HOME) continues its descent below the immediate resistance at ₱6.15 toward the immediate support at ₱4.50. It closed on Monday, September 14, 2020, at ₱5.75 per share, down by 1.20 percent, with a total turnover value of ₱19.76 million.
Foreign investors printed a net foreign selling worth ₱6.45 million. They remain net sellers year-to-date.
I do not see a pressing concern on HOME’s daily volume since its almost always higher than the 50 percent of its 10-day volume average. It just so happens that the daily True Market Sentiment, based on the daily top 10 brokers’ trades, is almost always bearish. As a result, the price of HOME struggles to rise above the 10-day simple moving average.
As a domino effect on HOME’s difficulty to cross above the said moving average, its moving average convergence divergence (MACD) continues to show a bearish divergence from the signal line. Moreover, the directional movement index (DMI) shows that the -DMI continues to increase the gap above the +DMI (another bearish divergence), with the average directional index (ADX) slowly approaching the 25-point mark. These are two bearish signals.
On the other hand, HOME is a low-risk stock due to its 10-day historical volatility score of nearly 18 percent. I refer to this retail company’s daily price movement’s erraticity and not your risk tolerance. Having a low-risk profile based on the stock’s historical volatility score is not a signal for you to buy the stock. In layman’s terms, this means the stock does not fluctuate erratically daily. For new investors, I recommend that you monitor (not buy right away) low- to moderate-risk stocks. You’ll know more about my ways of measuring the stock’s erraticity or risk level through our online stock market course, which is one of our stock market consultancy service’s inclusions.
Now, let’s find out if HOME has a confirmed buy signal despite its declining price.
Trade-Volume Distribution Analysis
Last Price: ₱5.75
VWAP: ₱5.76
Dominant Range: ₱5.75 – ₱5.77
I do not see a confirmed buy signal for HOME because its 10SMACD combo (composed of two elements) and Momentum Power Indicator (composed of four elements) are bearish.
As to what these elements are, where to find them, or how to interpret them is concerned, you’ll learn about it through our online stock market consultancy service.
True Market Sentiment – EOD (September 14, 2020)
True Market Sentiment: BEARISH
4 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: ₱5.7564
Top 10 Players’ Selling Average: ₱5.7543
Bonus Info:
12 out of 29 participants or 41.38% of all participants registered a 100% BUYING activity
5 out of 29 participants or 17.24% of all participants registered a 100% SELLING activity
True Market Sentiment – MTD (September 1-14, 2020)
True Market Sentiment: BEARISH
4 of the top 10 brokers registered a positive Net Amount
3 of the top 10 brokers registered a higher Buying Average than Selling Average
Top 10 Players’ Buying Average: ₱5.9070
Top 10 Players’ Selling Average: ₱5.9155
Bonus Info:
24 out of 69 participants or 34.78% of all participants registered a 100% BUYING activity
3 out of 69 participants or 4.35% of all participants registered a 100% SELLING activity
I can see that some relatively smaller brokers have clients who are fond of the “buy the dips” strategy. Where do I see that? Look under the hood of the “Bonus Info” section of my True Market Sentiment’s statistics.
About 41.38 percent and 34.78 percent of the total trading participants for the end-of-day and month-to-date reports, respectively, show small investors’ interest in buying the dips. However, their pockets’ depth is not deep enough to counter the selling appetite of the relatively bigger traders who chose to sell. As a result, the price continues to decline.
This is why you should not blindly follow the peso cost-averaging strategy just because it already exists even before you were born. Think independently and deeply. Why would you buy more stock shares if there’s a data-driven strategy to measure the probability of a continuous descent in price? Let that sync in your head for a while.
Recommendations
HOME has seen its best days three months from its initial public offering (IPO). Why did I say that? It has stayed in the bearish channel three months from its IPO. By now, your trailing stop (if you used one) must have already been hit.
Why do I recommend that you use a trailing stop? It preserves your capital, protects your gains, and prevents unbearable losses. Memorize those three Ps.
On the other hand, if you honestly say that your trailing stop remains intact, I don’t see a logical reason to average down or buy more shares. Don’t brainwash yourself into thinking that you’re buying more for less at this moment. Buying more shares at a relatively lower price, when all data points show that the descent in price is more likely to continue, is a waste of buying power.
If you’re a low-risk investor (your risk tolerance), I recommend reducing the percentage of risk on your trailing stop. If you’re one of our clients, I should not sound like talking Martian to you. Use our trailing stop calculator. You’ll find it in the TOOLS tab of our online stock market library. Move!
Now, if you don’t have HOME yet, I recommend that you wait for its 10SMACD combo and Momentum Power Indicator to become bullish before you consider buying this stock. You may post a request for our latest analysis on HOME (or any stock) in our Private Clients Forum (exclusively available for our clients) so we can guide you as trading happens.
Once those two indicators become bullish, you need to calculate your reward-to-risk ratio, so you’ll know if your potential reward is bigger than the potential risk. You’ll find our reward-to-risk ratio calculator in the TOOLS tab of our online stock market library, too.
If you’re satisfied with the calculated ration, that’s when you can do a test-buy within the dominant range. We will supply you with our trade-volume distribution analysis upon request in our Private Clients Forum. When you buy within the dominant range, you’re a tactical and realistic investor or trader.
Do You Want to Learn How to Analyze This Way?
You may already know SMAs, MACD, DMI, VWAP, support, and resistance, but maybe you’re wondering what 10SMACD, Momentum Power Indicator, and True Market Sentiment are. You’ll learn my entire methodology through the online stock market course of Equilyst Analytics. Access to the online stock market course is just one of the six services you’ll get when you subscribe to our stock market consultancy service. Read the details of our stock market consultancy service so you’ll know how I can make you learn how to invest independently and trade tactically.
You will find tutorials about SMA, MACD, DMI, VWAP, support, and resistance on Google or YouTube, but you will never find the methodology of how I mix and match them. My service is not about giving you a lecture about the definition of these indicators. My service is about teaching you my methods on HOW to use these indicators, WHEN to use them, WHY use them, and more.
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