Sentimental and Technical Analysis for Converge ICT Solutions, Inc. (PSE:CNVRG)
Converge ICT Solutions, Inc. (PSE:CNVRG) is one of the battered stocks due to the direct and indirect effects of the ongoing political and war-related concerns, locally and internationally, respectively.
CNVRG is not alone, though. Most, if not all, PSE-listed stocks are affected, too.
Converge started to paint the line of its downtrend channel after it hit its all-time high on October 6, 2021 at P45.40 per share. As of closing on March 15, 2022, Converge printed a closing price of P22.00 per share, down by nearly 52% from its all-time high.
I know many traders were hoping for Converge to bounce near P25.30 only to see it breaking below that previous support level. Now, this stock is moving towards its immediate support near P20.20. If it doesn’t bounce at P20.20, I’m looking at P14.90 as the next support level to test.
As of the trading on March 15, 2022, the price points of Converge that accumulated the biggest volume and the highest number of trades were closer to the intraday low than the intraday high. If you attended my 1-on-1 masterclass training, you know what is more likely to happen now.
What seems contradictory to what I mentioned in the previous paragraph is the bullish number of participants that registered a positive net amount as of closing on March 15, 2022. Did you know that 57 of the 74 participating brokers registered a positive net amount or 77.03% of all participants? Also, 51 of the 74 participating brokers, or 68.92% of all participants, registered a higher buying average than the selling average.
On the other hand, the 74 participating brokers’ buying average of P22.04725 is less than their selling average of P22.06726.
So, how will you interpret these opposing trading participants’ sentiments? Again, if you attended my 1-on-1 masterclass training with a free 1-year subscription to Equilyst Analytics, interpreting these statistics should be bliss.
I’m not trying to add more confusion, but 35 out of 74 participants, or 47.30% of all participants, registered a 100% BUYING activity. In contrast, only 4 out of 74 registered a 100% SELLING activity as of closing on March 15, 2022.
Foreign Investors
Foreign investors are not buying the dips. Even though their selling activities are not as intense as their selling back in the last quarter of 2021, they’re still net sellers year-to-date.
What do you expect when the deep-pocketed investors are ignoring the dips?
Volume
I see no pressing concerns on the daily volume of Converge. The problem is that as the downtrend in price intensifies, the volume increases. This means the sellers have not reached that level of exhaustion you may be waiting for. They still have lots of Converge shares to expel, so to say.
Moving Average Convergence Divergence
By classical interpretation, Converge’s MACD remains bearish. Do I see any formation of a bullish convergence between the MACD and the signal lines? Nope!
Still a Newbie-friendly Stock?
Converge has a moderate erraticity level due to its 10-day historical volatility score of nearly 53%. It’s still a newbie-friendly stock as long as it doesn’t reach the high to extremely high erraticity level. But should you buy a newbie-friendly stock just like that? Of course, not! There’s got to be a confirmed buy signal.
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: NO
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: NO
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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