Megawide Construction Corporation (MWIDE) Technical Analysis
Megawide Construction Corporation (MWIDE) has been consolidating between the immediate support near ₱4.60 and the immediate resistance near ₱8.00 since March 2020. I see huge spikes on Megawide’s daily volume for the past three consecutive trading days, but there’s no significant advancement in its share price. Megawide seems to be transitioning from the consolidation to the distribution phase.
As the daily volume of Megawide grows taller, the foreign investors’ daily net foreign selling gets deeper. Today, they registered a net foreign selling worth ₱73.60 million. They are net sellers year-to-date.
On the positive side, Megawide’s last price is trading above the 10-day simple moving average (SMA). The last volume bar is green and is higher than the 100 percent of Megawide’s 10-day volume average. Megawide’s MACD line also registered a golden cross above the signal line today. This makes my 10SMACD combo bullish. We need to see a bullish Momentum Power Indicator to say that MWIDE has a confirmed buy signal. We’ll find out later in my trade-volume distribution analysis.
Meanwhile, Megawide is a moderate-risk stock due to its 10-day historical volatility score of 56 percent.
I also see a bullish divergence between the +DMI and the -DMI. However, the upward momentum is not yet confirmed strong because the average directional index (ADX) is only at 18 points. MWIDE needs to break the immediate resistance at ₱8.00 and draw closer to the next resistance at ₱10.50 to not only increase the gap between the MACD and the signal line but also for the ADX to score near 25 points.
Trade-Volume Distribution
Last Price: ₱8.00
Intraday Low: ₱7.51
Intraday High: ₱8.32
VWAP: ₱7.93
Dominant Range: ₱8.00 – ₱8.25
The last price of ₱8.00 is higher than MWIDE’s volume-weighted average price of ₱7.93. The dominant range is also closer to the intraday high than the intraday low. The other two elements of MWIDE’s Momentum Power Indicator are bullish. Therefore, the overall rating of its Momentum Power Indicator is bullish.
On the other hand, watch out for the next dominant range between ₱7.60 and ₱7.80 if Megawide starts at a price lower than ₱8.00 by the next trading day. You can see this secondary dominant range in my Trade-Volume Distribution chart for MWIDE.
True Market Sentiment – EOD (November 11, 2020)
True Market Sentiment: NEUTRAL
7 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: ₱7.9301
Top 10 Players’ Selling Average: ₱7.9527
10 out of 68 participants, or 14.71% of all participants, registered a 100% BUYING activity
24 out of 68 participants, or 35.29% of all participants, registered a 100% SELLING activity
True Market Sentiment – WTD (November 9-11, 2020)
True Market Sentiment: NEUTRAL
6 of the top 10 brokers registered a positive Net Amount
5 of the top 10 brokers registered a higher Buying Average than Selling Average
Top 10 Players’ Buying Average: ₱7.6446
Top 10 Players’ Selling Average: ₱7.6769
13 out of 84 participants, or 15.48% of all participants, registered a 100% BUYING activity
11 out of 84 participants, or 13.10% of all participants, registered a 100% SELLING activity
True Market Sentiment – MTD (November 3-11, 2020)
True Market Sentiment: NEUTRAL
6 of the top 10 brokers registered a positive Net Amount
5 of the top 10 brokers registered a higher Buying Average than Selling Average
Top 10 Players’ Buying Average: ₱7.6284
Top 10 Players’ Selling Average: ₱7.6076
13 out of 87 participants, or 14.94% of all participants, registered a 100% BUYING activity
11 out of 87 participants or 12.64% of all participants registered a 100% SELLING activity
The average True Market Sentiment across three timeframes is neutral. I want to interpret this as a sign of a potential sell-off near ₱8.00. There’s a chance for the price to bounce away from ₱8.00 by the next trading day.
Nonetheless, my sentiment is subject to change depending on the prevailing status of the Momentum Power Indicator and intraday True Market Sentiment of Megawide by the next trading day. So, I recommend that you ask for our latest analysis and recommendation in our Private Clients Forum, as trading happens if you’re one of our stock market consultancy services’ subscribers.
Recommendations
Suppose you already have Megawide, and your trailing stop is intact. If that’s the case, you have two data-driven options.
First Option: If you’re a high-risk trader or investor, you may top-up within the primary dominant range. If the price starts at a price lower than ₱8.00, monitor the secondary dominant range I mentioned. Better yet, ask for the prevailing dominant range of MWIDE by posting a request in our Private Clients Forum (if you’re one of our clients).
Second Option: Hold your position if you’re a low-risk trader or investor. Top up once the intraday True Market Sentiment becomes bullish (assuming the 10SMACD and Momentum Power Indicator of Megawide remain bullish when that happens).
Follow the same recommendations above if you don’t have MWIDE in your portfolio yet. However, you must calculate your reward-to-risk ratio first. It’s possible that you’re not satisfied with the reward-to-risk ratio despite the bullishness of the 10SMACD and Momentum Power Indicator of MWIDE.
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