Hunkering down Den Somera Philippine Daily Inquirer
July 03, 2009
JUST when other regional markets were displaying relative calm, our local market was—oddly—reacting the opposite way.
Noticeably since Monday, after stock prices failed to break out higher the week before particularly Friday, market activity started to hunker down. This was despite a double event that usually stirs some market-making activity, namely the closing for June and the second quarter.
Curiously, none of our virtual market riders were as “predisposed” to the market mood. Only the CycleReader appeared affected. But this was mainly because her charts—being some kind of a pure technical analyst when it comes to timing trading calls—was telling her to sell parallel to what is actually bugging the market.
Week four at the virtual game
The stock market challenge is now on its fourth week. As of this writing only three of the seven market riders had made new trading moves.
As early as Monday, June 29, the CycleReader has decided to lighten up her investment basket as stated. According to her charts, “Megaworld Corp. (MEG) may have hit the top of leg B at P1.06 after closing at P1 last Friday; (it) may retrace (its price at ) P0.92-P0.88 as leg C of the fourth wave is formed.”
Her order was to sell 265,000 shares at P1.02. This was declared invalid because there were only 50,000 shares traded at that price for the day. She gave the same sell order the following day realizing that her order did not materialize. Tough luck for her, the highest MEG trade on Tuesday was P1. She was unable to unload.
She finally had her wish on Wednesday, July 1. But this was after selling at radically reduced price because, as she explained, the “Chart of the Dow and S&P has formed a head and shoulder top (which) portends of more price weakness ahead for stocks.” Her sell price was P0.96 but was validated at P0.97 because the market opened at this price.
The next was The Oracle, who last Tuesday, June 30, was not lucky enough to buy any of his new additional stock picks. He wanted to “buy 30, 000 shares of Paxys Inc (PAX) at P2.30 together with 10,000 shares of Universal Robina Corp. (URC) at P6.80.” PAX traded higher for the day with a low of P2.32 only. URC traded higher likewise with a low of P6.90 only.
The QB Trader practically invested all her remaining investible cash on Tuesday, June 30. She ordered to “buy 1,000 shares Jollibee Foods Corp. (JFC) at P49.50” but was validated at the opening price of P49; and 6,000 shares of Robinsons Land Corp. (RLC) at P6.80 per share” which was validated at said price. (Beside are the partial standings for Week 4.)
Bottom line spin
When the market is down, cash is said to be king, according to an old market adage. This will explain why the market riders who are heavy on stock investments are suffering. And those retaining bigger cash position seem to be ahead. But don’t be lulled by such a scheme. Watch out for the risk-takers get a handle of their stock plays—in bad or good market. In the meantime, keep your ears close to the ground why the market is oddly moving as it is. My friend who I call “Whispers” could have really captured some shoulder talks around town to expect some market upsetting activities ahead.
Corporate update
Stockholders of Philcomsat Holdings Corp. (PHC) may finally have something good to look forward to. First, the trading of the shares of the company at the Philippine Stock Exchange (PSE) may soon be restored as the rightful set of board of directors has taken control to resolve the problem. Second, efforts to retrieve the P800 million or so cash of the company is underway. For example, last June 23, 2009, the honorable Judge Oscar B. Pimentel of Branch 148 of the National Capital Judicial Region in Makati City has denied the petition ex-PHC director Philip Brodett and ex- PHC bankers Leonides Val Ortega, Vicente J. Campa Jr. and Javier A. Quintos to withhold the issuance of a warrant of arrest to their person in connection with the estafa case filed by current PHC director Jose Ma. Ozamiz to recover company funds equivalent to P66.8 million.
More importantly, the present management and directors are set to organize and align corporate expertise to evaluate business opportunities in connection with its organizational duty to find good return on investment for the stockholders.
(The public should be aware that the writer may have a conflict of interest that could affect the objectivity of his report or mentioned investment story. You may reach the Market Rider at marketrider@inquirer.com.ph or directly at densomera@yahoo.com)
