Technical Analysis
San Miguel Corporation (SMC) closed at 193.00 per share as of recess of May 9, 2019.
My three Simple Moving Averages maintain their bullish alignment. My 10SMA-MACD combo was triggered positively on May 3, 2019. That was when MACD touched the signal line towards to the northward direction and the price rose above the 10SMA.
On May 6, 2019, my 4-point criteria for a test-buy was met. That was the day when SMC registered another green candlestick, the price rose higher than SMC’s volume weighted average price (VWAP), the volume was higher than the 50% of SMC’s 10-day volume average, and the most traded and most voluminous range was closer to the intraday high than the intraday low.
Moreover, foreign investors are net buyers of SMC for 2019 YTD.
My Directional Movement Index’s histogram also gives me a bullish signal even though the ADX is still below 25 points. The strength of the upward momentum will enter the “very strong” criterion once the positive DMI maintains its position above the negative DMI without forming a bearish convergence with the latter and when the ADX rose higher than 25 points.
Trade-Volume Distribution Analysis
VWAP: 190.5659
Most Traded Prices: 188, 193, 187.9, 192.9, 187.3
Most Voluminous Prices: 193, 190, 189, 185.4, 194
The most traded and most voluminous range of SMC is registered closer to the intraday high than its intraday low in the first half of trading today.
However, I suggest that you monitor the range between 187 and 189 should the price drops below the 190 level. Why? That’s the other range that also got the second biggest volume and highest number of trades.
Sentiment of the Top 10 Players
Trading participants of SMC with a 100% Buying and Selling Activity as of May-09-2019 at 12:00PM:
- 5 out of 56 participants or 8.93% of all participants registered a 100% BUYING activity
- 29 out of 56 participants or 51.79% of all participants registered a 100% SELLING activity
- Top 10 Players’ Buying Average: 189.9684
- Top 10 Players’ Selling Average: 190.1535
Since SMC does not have a historical resistance anymore, it seems that other trading participants decided to lock-in some profits. That’s not a bad idea. In fact, it’s a logical thing to do.
Note that I got the psychological resistance of 205.70 by plotting an Up Fibonacci and deriving it on the 61.8% Fibonacci extension.
After all, it’s not a promise that the price will “surely” hit that level. So, it’s prudent to lock-in some profits in tranches.
Overall Sentiment and Recommendations
While I remain bullish on SMC, note that RSI is already drawing closer to its classical overbought level.
Do you have SMC? You can have as many options as you want but here are the three I can think of now.
- Option 1: Hold your position and sell only once your trailing stop loss is hit.
- Option 2: Top-up and do an upward adjustment on your trailing stop loss every time SMC registers a higher price.
- Option 3: Pre-empt your trailing stop loss by selling a few tranches on the upper-half of the trade-volume distribution chart.
If you do not have SMC and are planning to trade the name, I suggest that you calculate your reward-to-risk ratio relative to the position of the current price and its distance between the support and psychological resistance. If you’re happy with the ratio you got and if you’re a high-risk trader, you can do a test-buy. Do a test-buy not at any price but within the most traded and most voluminous range. I strongly advise that you do a fresh trade-volume distribution analysis when trading resumes so you can see if the focus is shifting to the other range or if the dominant range is expanding its territory.
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I hope this helps. If it does, please let me know in the comments Thank you!
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