Megaworld Corporation (MEG) registered a green volume higher than the 100 percent of its 10-day volume average as of closing on August 19, 2020. The price went up by 2.67 percent at ₱3.08 per share, with a total turnover value worth ₱66.90 million.
Local investors were the dominant movers of Megaworld today. Also, the foreign investors registered another Net Foreign Selling (NFS) worth ₱31.50 million. This NFS has been their 19th day of consecutive NFS. They remain as net sellers year-to-date.
Megaworld’s immediate support is at ₱2.90, while its immediate resistance is near ₱3.45. You’ll get an attractive reward-to-risk ratio if you use my reward-to-risk ratio calculator. You’ll find it in the TOOLS tab of our online stock market library. However, I only recommend the calculation of the reward-to-risk ratio if, and only if, there’s a confirmed buy signal already. After all, it doesn’t make sense to calculate your reward-to-risk ratio if there’s no confirmed buy signal.
Do I see a confirmed buy signal despite the bearish take of the deep-pocketed foreign investors? Let’s find out the status of my 10SMACD and Momentum Power Indicator.
Trade-Volume Distribution Analysis
Last Price: ₱3.08
VWAP: ₱3.075
Dominant Range: ₱3.07 – ₱3.10
My 10SMACD combo is bullish. All four elements of my Momentum Power Indicator are bullish, which makes the overall state of my Momentum Power Indicator is bullish. Therefore, I see a confirmed buy signal.
Before you calculate your reward-to-risk ratio (just because I said I see a confirmed buy signal), you must first see what the True Market Sentiment of the top 10 traders of Megaworld say. I’m going to present the end-of-day, week-to-date, and month-to-date True Market Sentiment charts and statistics of Megaworld.
True Market Sentiment – EOD
True Market Sentiment: NEUTRAL
5 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: ₱3.0706
Top 10 Players’ Selling Average: ₱3.0753
Bonus Info:
12 out of 46 participants or 26.09% of all participants registered a 100% BUYING activity
17 out of 46 participants or 36.96% of all participants registered a 100% SELLING activity
True Market Sentiment – WTD
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: ₱3.0288
Top 10 Players’ Selling Average: ₱3.0392
Bonus Info:
16 out of 62 participants or 25.81% of all participants registered a 100% BUYING activity
8 out of 62 participants or 12.90% of all participants registered a 100% SELLING activity
True Market Sentiment – MTD
True Market Sentiment: NEUTRAL
4 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: ₱2.9818
Top 10 Players’ Selling Average: ₱2.9819
Bonus Info:
21 out of 83 participants or 25.30% of all participants registered a 100% BUYING activity
3 out of 83 participants or 3.61% of all participants registered a 100% SELLING activity
All three statuses tell me that there’s still a tug-of-war between the bears and the bulls. You might want to say, “Isn’t that the case everyday, Jaycee? The bears and the bulls are always fighting every single second as trading happens.”
Let me be clearer then. When I say there’s a tug-of-war between the bears and the bulls, I refer to indecision between the optimistic buyers and pessimistic sellers. They haven’t registered a significant or solid stance yet. This means there’s still a chance for the price to re-test the support near ₱2.90.
Didn’t you notice that the top 10 players’ selling average is higher than their buying average for the three timeframes?
Didn’t you notice that the number of brokers (among the top 10) that registered a positive net amount didn’t get past the count of five for all three timeframes?
For me, this means everyone’s still eavesdropping with each other.
Recommendations
If you have Megaworld in your portfolio, you don’t need to ask whether you should hold your position or sell as long as you know where your trailing stop is. If the last price is still above your trailing stop, there’s no need to make an abrupt decision to sell. Your trailing stop is intact, anyway.
However, you’re in trouble if you don’t know what a trailing stop is. You can’t use peso-cost averaging or averaging down as your perpetual strategy. It’s okay to buy more shares if your trailing stop is intact and if you see a confirmed buy signal, whether your basis is fundamental analysis, technical analysis, or both. It’s okay to average down or up as long as you have a data-driven basis for your action.
As far as my methodology is concerned, do I recommend that you buy more shares of Megaworld if you already have it in your portfolio?
If you’re a high-risk investor, you may top up within the dominant range I mentioned above.
If you’re a low-risk investor, you may want to wait for the True Market Sentiment (at least for the EOD) to become bullish. Hopefully, the 10SMACD and Momentum Power Indicator of Megaworld are still bullish when that happens.
On the other hand, do I recommend that you enter a new position if you don’t have Megaworld yet?
My answer is the same as for those who are planning to buy more shares of Megaworld. Just make sure you calculate your reward-to-risk ratio if you choose to do a test-buy. There’s no standard or universal answer on what’s acceptable and not for a reward-to-risk ratio. It requires a personal response. If you’re happy to enter a new position with a reward-to-risk ratio of 3:1, it’s up to you. If you’re satisfied with 2:1, it’s up to you. Just be on top of your trailing stop, so you know what to do if the reality doesn’t match your data-driven forecast. You will find my trailing stop calculator in the TOOLS tab of our free stock market library.
If you’re one of our clients, you may check our Investment Guide for Long-term Investors since MEG is one of the index stocks. We update our investment guide for long-term investing (for our clients only) twice a day while we’re in the shortened trading hours due to the COVID-19 pandemic. We were updating it four times a day during the pre-COVID19 period, and we will continue doing that once we revert to the pre-COVID19 trading schedule.
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.
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