Technical Analysis
First off, please don’t wonder why GMA7 registered a gap on April 15, 2019. There was a P0.45 cash dividend with an Ex-Div Date of April 15, 2019.
GMA Network, Inc. (GMA7) closed on Tuesday at 5.23. which is below its Volume Weighted Average Price of 5.24. Volume was below the 50% of the 10-day volume average of GMA7 on Tuesday. This stock has occasional liquidity issues. Those are bearish signals.
GMA7 is not only bearish in the short-term but also in the long-term. The immediate support is near 5.00 while the immediate resistance is near 5.35.
This issue is now closer to its immediate resistance than its immediate support. Therefore, you won’t get an attractive reward-to-risk ratio relative to the distance of the current price from the immediate support and resistance levels.
MACD is still bearish. Although a slight formation of a bullish convergence between MACD and signal line was formed when the price bounced from 5.10, my conviction isn’t high to say that the bullish convergence between MACD and signal lines will come into fruition any time soon unless GMA7 will print bullish volume bars that are at least above the 50% of the stock’s 10-day volume average on a daily basis.
Although volume isn’t part of the equation when calculating MACD, I associate the sustainability of the prevailing trend with the size of the volume. If the stock registers a green candlestick with a relatively thin volume, the ascent in price may not be sustained.
GMA7 may have found its psychological bottom at 5.10. That was the price level when RSI entered the classical oversold level. RSI bounced away from the classical oversold level when the price hit 5.10.
GMA7 has a historical volatility score of 53 percent. That’s a moderate risk level for me. It would be more prudent for relatively new traders to pick low- to moderate-risk stocks for a start.
Trade-Volume Distribution Analysis
VWAP: 5.2391
Most Traded Prices: 5.25, 5.21, 5.21, 5.24, 5.23
Most Voluminous Prices: 5.25, 5.21, 5.27, 5.24, 5.23
It looks like volume and trades were evenly distributed last Tuesday. I will translate this as a sign of an indecision.
I’ve noticed this behavior (signs of indecisions) among stocks with think resistance levels every time they become closer to the resistance than the support level.
For this reason, a data-driven trader can’t help but consider reducing some positions near the resistance area.
Overall Sentiment and Recommendations
My overall sentiment on GMA7 is bearish both in the short-term and long-term scales.
If you bought GMA7 near 5.10, you may want to consider locking in some profits near 5.35.
If you don’t have GMA7, don’t enter on a new position just yet. Wait for these 4 criteria below to appear (all of them) before you decide to do a test-buy.
– the prevailing candlestick must be green
– the prevailing price must be higher than the prevailing VWAP
– prevailing volume must be at least higher than 50% of the stock’s 10-day volume average
– the most voluminous and traded range must be closer to the intraday high than the intraday low
When all four criteria are present, don’t buy at any price. Buy within the range that got the biggest volume and the highest number of trades. You may also use VWAP as your candidate for an entry price. Calculate your reward-to-risk ratio.
As always, please be on top of your trailing stop loss. If the concept of using a trailing stop loss is new to you and you’ve accustomed yourself to using a target selling price, please watch this video.
Trailing Stop Loss vs Target Selling Price
In this video, Jaycee De Guzman, our founder and CEO, explained in Filipino why a Trailing Stop Loss trumps a Target Selling Price in terms of the ability to maximize your potential gain and of having a stress-free way of limiting your potential losses within your tolerable risk.Just a little correction on the 17:44 part of the video. It's about the calculation of the yield from the entry price of 19.80 to the Target Selling Price of 21.30. One of the correct formulae is this: (21.30-19.80)/19.80 = 0.0757 or 7.58%Do you need our assistance? Subscribe to our services today!You'll get access to ALL of these three services when you subscribe TODAY!✅ Investment Guide for Long-term InvestorsLearn more: https://www.equilyst.com/invest/✅ Trade Setups for Short-term TradersLearn more: https://www.equilyst.com/trade/✅ Consultation in the Private Clients ForumLearn more: https://www.equilyst.com/mentor/We also encourage you to read our testimonials at https://www.equilyst.com/testimonials/.Subscribe below 👇🏿👇🏿👇🏿 https://www.equilyst.com/subscribe/https://www.equilyst.com/subscribe/https://www.equilyst.com/subscribe/
Posted by Equilyst Analytics on Thursday, April 11, 2019
How about you? What’s your overall sentiment and trade setup for GMA7?
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I hope this helps. If it does, please let me know which part of my analysis you liked best. Thank you!
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