DITO CME Holdings Corp. (DITO) Technical Analysis
DITO CME Holdings Corp. (DITO) tries to maintain its position between ₱5.50 and ₱7.00, its support and resistance levels, respectively. On Friday, November 6, 2020, it broke below the deeper support at ₱4.85 and registered an intraday low of ₱4.80, but it managed to recover at ₱6.11, 3.74 percent higher than its previous closing price.
DITO’s total turnover value reached ₱1.40 billion on Friday, but I’m not impressed by the net foreign buying worth ₱13.80 million. You will see a spike in the foreign investors’ participation in trading DITO beginning October 2020 when you look at its Net Foreign histogram. However, their participation’s absolute value is not as sizable as their participation in the index or blue-chip stocks.
DITO’s last volume bar is quite impressive, though. It engulfs all daily volume bars beginning October 7, 2020. Since it’s green and the last candlestick is green, too, we’ll see later in my trade-volume distribution analysis if the two other elements of the Momentum Power Indicator of DITO are also bullish.
Despite the impressive intraday recovery of DITO on Friday from its intraday low of ₱4.80, the MACD line is still moving below the signal line. After zooming in the MACD’s histogram, I saw no bullish convergence forming between the MACD and signal lines. DITO needs to draw much closer to its immediate resistance near ₱7.00 to bend the MACD line’s tip toward the northward direction.
DITO remains a moderate-risk stock due to its 10-day historical volatility score of 69 percent. It’ll be a high-risk stock once it crosses the 70 percent level. Understand that I’m referring to how erratic its price moves when I say risk level. I’m not referring to your level of personal risk tolerance. Those are two different things.
The bearish structure of the Directional Movement Index (DMI) histogram agrees with the bearishness of the MACD. The -DMI continues to hover the +DMI. The Average Directional Index (ADX) is higher than 25 points, which confirms that DITO is still not out of the woods regarding the possibility of re-testing the support near ₱4.85. So, be careful about your go or no-go decision to buy DITO.
Trade-Volume Distribution Analysis
Last Price: ₱6.11
Intraday Low: ₱4.80
Intraday High: ₱6.14
VWAP: ₱5.44
Dominant Range: ₱6.00 – ₱6.11
The last price of ₱6.11 is higher than the volume-weighted average price (VWAP) of ₱5.44. The dominant range between ₱6.00 and ₱6.11 is closer to the intraday high than the intraday low. Therefore, all four elements of the Momentum Power Indicator of DITO are bullish.
Does this mean DITO has a confirmed buy signal already? Unfortunately, it still has no confirmed buy signal, as far as my methodology is concerned. Why? Its last price is still moving below the 10-day simple moving average (SMA), and its MACD is moving below the signal line. Its 10SMACD combo is bearish. The 10SMACD combo and Momentum Power Indicator of a stock must be bullish to have a confirmed buy signal.
True Market Sentiment – EOD (November 6, 2020)
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: ₱5.4568
Top 10 Players’ Selling Average: ₱5.4414
12 out of 92 participants, or 13.04% of all participants, registered a 100% BUYING activity
2 out of 92 participants, or 2.17% of all participants, registered a 100% SELLING activity
True Market Sentiment – WTD (November 3-6, 2020)
True Market Sentiment: NEUTRAL
3 of the top 10 brokers registered a positive Net Amount
7 of the top 10 brokers registered a higher Buying Average than Selling Average
Top 10 Players’ Buying Average: ₱6.0184
Top 10 Players’ Selling Average: ₱5.9630
9 out of 102 participants, or 8.82% of all participants, registered a 100% BUYING activity
4 out of 102 participants, or 3.92% of all participants, registered a 100% SELLING activity
The neutral True Market Sentiment across two timeframes supports the suggestion of being a little bit conservative or cautious with your buying decision on DITO.
Recommendations
Whatever your strategy is, whether you’re following my Evergreen Strategy in Trading and Investing in the Philippine Stock Market or not, decide with caution. Don’t be overly aggressive with your buying decision unless your fearless decision is anchored on years of experience and a disciplined mind. If you’re nowhere near that, do yourself a favor by not being a reckless trader or investor.
Suppose you already have DITO, and your trailing stop is intact. If that’s your case, I would recommend that you hold your position for now. Buy in tranches once both the 10SMACD and Momentum Power Indicator of DITO are bullish. Do this if you’re following my methodology (I’m assuming you’re one of our clients already).
More importantly, remember to upgrade your trailing stop whenever a higher price is register. Higher than what? Higher than the previous price you used in adjusting (upward) your trailing stop. Review our online stock market course (if you’re one of our clients) for the detailed execution of this strategy.
Now, suppose you don’t have DITO yet. I would recommend that you wait for a breakout above the resistance at ₱7.00 so you’ll have a better reward-to-risk ratio. Even if the last candlestick is closer to the immediate support than the immediate resistance right now, there’s no confirmed buy signal yet. As far as my methodology is concerned, I only calculate the reward-to-risk ratio if, and only if, there’s a confirmed buy signal already. Feel free to use my reward-to-risk ratio and trailing stop calculators in the TOOLS tab of our online stock market library at Equilyst Analytics.
If you’re one of our clients at Equilyst Analytics, I strongly advise that you ask for our latest analysis, especially our trade-volume distribution and true market sentiment analysis, in our Private Clients Forum when you see significant changes on the price and volume of DITO so we can guide you further.
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