Insights for Semirara Mining and Power Corporation (PSE:SCC)
Shareholders of Semirara Mining and Power Corporation (PSE:SCC) might have gotten a little nervous after the said stock dropped from P26.30 to P25.00 by 4.94% as of closing last Thursday, February 24, 2022.
Semirara came out of the downtrend channel (trading between October and December 2021) when it broke above P23.80, making that pricepoint is immediate support level. The prevailing resistance level is now near P27.30. Breaking above that resistance line will make P30.60 as the next target, but breaking below its immediate support line might re-test the support at P20.50 back from where it bounced off last December 2021.
As of the time of reporting, Semirara is trading above its 10-day simple moving average. It’s still not out of the woods for it is still testing the resistance at P27.30.
Foreign Investors
Despite the negative day change last Thursday, the foreign investors forced a net buying amount worth P6.6 million, which remains relatively insignificant. They are yet to register an 8-digit net buying amount since their nearly P57 million net buying amount last December 1, 2021.
The foreign investors were more participative in trading Semirara in the last quarter of 2021 than this quarter of 2022. By the looks of their most recent transactions, they do not have the upper-hand in influencing the daily sentiment in trading Semirara.
Volume
The relatively significant drop in share price last Thursday came with a significant volume that exceeded the 100% of its 10-day volume average. If this intraday bullishness will be supported with and be sustained by a huge volume that is higher than the 100% of SCC’s 10-day volume average, we might see this mining stock testing P30.60 in March 2022.
Moving Average Convergence Divergence
By classical interpretation, Semirara got a bearish stance according to its MACD. I see a formation of a bullish convergence between the MACD and the signal line, but this convergence might only turn into a crossover once Semirara breaks above the resistance at P27.30 all the way to P28.50.
Still a Newbie-friendly Stock?
Semirara was having a low erraticity rating until today, February 28. As of the time of reporting, SCC has a 10-day volatility score of nearly 62%, which puts SCC in a moderate erraticity level. Crossing the 70%-mark will put it in the high erraticity level. At its current level, I still classify Semirara has a relatively newbie-friendly stock. However, do not misinterpret that as a signal to buy. Not all stocks with a low- to moderate-erraticity level have a confirmed buy signal.
Is There a Confirmed Buy Signal?
Let’s take a look at the ratings of the six indicators that compose my proprietary methodology called The Evergreen Strategy in Trading and Investing in the Philippine Stock Market. If all of them are bullish, then, there’s a confirmed buy signal.
Once there’s a confirmed buy signal, you need to calculate your reward-to-risk ratio and initial trailing stop. Do a test-buy or top-up on your existing shares if and when you’re satisfied with the ratio.
Parameter 1: Is its last price moving above its 10-day simple moving average (SMA)?
Answer: YES
Parameter 2: Is its last volume bar higher than 50 percent of its 10-day volume average?
Answer: YES
Parameter 3: Is its moving average convergence divergence (MACD) moving above its signal line?
Answer: NO
Parameter 5: Is its Dominant Range Index bullish?
Answer: Login to your account and ask for the DRI of this stock.
Parameter 6: Is its Market Sentiment Index bullish?
Answer: Login to your account and ask for the DRI of this stock.
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