Bullseye Report Weekly Overview

Authored by: Juanis G. Barredo VP; Chief Technical Analyst COL Financial Group Inc. (632) 636-5411 Juanis.barredo@colfinancial.com

Disclaimer: All opinions and estimates constitute the judgment of COL’s Equity Research Dept as of

the date of the report and are subject to change without notice. The report is for informational

purposes only and is not intended as an offer or solicitation for purchase or sale of a security.

Philippine Equity Research

Oct 18, 2015

WEEK’S HIGLIGHTS • The Philippines’ PSEi lost 83-pts pressured by resistance

• Average Daily Value Turnover slipped to P6.5-B from P8.7-B the week previous

• Net foreign flows again showed a net sell of P1.9-B from P426-M the previous week

• The PSEi (at 7,056) reacted 1.1% after feeling some pressure close to resistance. This triggered some profit taking and proceeds to acknowledge a consolidation range for the meantime. The range shows itself between the highs of 7,209-7,240 and the low of 6,720-6,600. MACD readings still show negative values and this also a tender situation as it declares the rally to be tentative… and could still be prone to selective sell downs. But with higher-low frames being put up, the short term rally initiative continues off a medium term reactive trend. This would still offer a sell or lighten into rallies towards resistance until the medium term down trend can be overturned.

• US markets along with Europe and parts of Asia did show some continuation swings into rallies as well but could also face some resistance pressures this week. The US Dollar bounced from its 1-Yr MA and this forced some volatility back to Asian currencies. This may prompt for a new fixed range for some of them. Gold prices proceeded to rally while Oil slid but did bounce from support

Focus Items Highlight Page

Philippines : Weekly Stats 2

Philippines : PSEi & Peso 3

Tech Map: Some key stocks and trend calls 4

US and Europe: In review 5

Asia: In review 6

Currencies & Commodities: In review 7

Issue Prev Wk Last Wk Wk Chg Wk Chg % YTD %

Philippines 7,139 7,056 (83.17) (1.17) (2.42)

Peso-$ 45.870 46.050 0.180 0.39 2.97

MSCI Phils 36.75 36.36 (0.39) (1.06) (4.82)

PLDT US 49.200 48.570 (0.630) (1.28) (23.26)

DJIA 17,084 17,216 131.48 0.77 (3.41)

SP500 2,015 2,033 18.22 0.90 (1.25)

Nasdaq 4,830 4,887 56.22 1.16 3.18

England 6,416 6,378 (38.12) (0.59) (2.86)

Nikkei 18,439 18,292 (146.87) (0.80) 4.82

Hong Kong 22,459 23,067 608.57 2.71 (2.28)

China 3,183 3,391 208.20 6.54 4.84

US 30yr Bond 156.21 157.91 1.70 1.09 4.05

10-Yr Yield 20.990 20.230 (0.760) (3.62) (6.77)

Dollar Indx 94.880 94.590 (0.29) (0.31) 4.38

Gold 1,155.60 1,177.40 21.80 1.89 (0.49)

Oil 49.49 47.73 (1.76) (3.56) (11.13)

GTX 2,735.80 2,650.95 (84.85) (3.10) (18.00)

-1.085

16.5

7.3

0.92

9.5 4.3

1.6 2.3

-0.282

0.555 0.478 3.06 4.2

0.61

-5.66

0.086

-4.4 -0.993

-3.6 -2.1 -2.5 -4.9 -3.2 -2.6 -2.6

0.266

-2.51 -0.745 -2.02 -3.5 -0.613

-3.7 -2.4

-11.8

-2.2 -3.01

-24.4

-2.1 -0.557 -0.566 -1.9

-30 -25 -20 -15 -10

-5 0 5

10 15 20

Net Foreign Flows (PHP Billions)

Philippines: Weekly Stats** Bullseye --- Page 2

*Source: PSE PER data uses four-quarter trailing financial data

2015 Net Outflows of P44.2-B

Philippines: PSEi & Peso Bullseye --- Page 3

Recommendation: Range trade to 1st or 2nd resistance

Support: 6,924-6,720 Resistance: 7,240 – 7,455

• The PSEi slid up 83-pts for the week at 7,055 as sellers took some profits as prices near resistance

•But an earlier successful double support test emplaced the necessary demand to enact a short term recovery from a medium term down trend

• Prices will now attempt a recovery to major averages estimating resistance at 7,209-7,240 and then 7,482

•A range trade then to such projected resistance spots is offered; as always the recovery swing should be followed with a protective stop on recent support lows (shown above)

Recommendation: Range trade (45.70 or <) to 47.00

Support: 45.70 - 45.50 Resistance: 47.00 - 47.18

• The Peso-$ (at P46.05) weakened vs the Dollar and moves into a short term consolidating trend after showing off a double top high at 47

•MACD reading confirm the consolidation drive and endorses the range trade on the Peso-Dollar

•As such we look to estimate support closer to 45.70-45.50 while resistance sits at the double tested high of 47.00

• The Dollar is under watch as it recently tested its 260-day MA and has so far bounced from this zone to consolidate – but any breach from the 260 may allow the Peso to firm

Double Top Resistance Holds

Tech Map

DIZ DD 2GO TA AGI NIKL AP JFC MPI ABS UNI ANS ORE AR

MER NOW AC* URC APC OV BHI SMPH AEV AT PCOR CEB X ALI BLOOM PHA CHIB AUB BPI PLC CIC BDO CNPF PNB FDC BEL COAL PSE FLI CAL^ CPG PSPC FOOD COSCO DMC PX HOUSE CROWN* DMPL PXP RCB DAVIN* EEI RFM SSI DNL* EMP ROCK EDC EW RRHI ELI FNI RWM FED* FPH SMC FGEN GERI STI GTCAP GLO TAPET IMI HLCM TEL ION ICT UBP JGS IS VLL MBT LC MEG LPZ PGOLD LR PIP LTG PNX MA RLC MARC SBS MAXS SCC* MCP SECB MWC SGI MWIDE SM NI

3 (-1) 5 (+1) 35 (+10) 53 (-5) 12 (-4)

Bullseye --- Page 4

Some Key Stocks and Trend Calls

GREEN

RED

BLACK

-These issues improved their technical condition for the week (moving to the left of their column category on the Tech Map) -These issues deteriorated on their technical condition for the week (moving to the right of their column category on the Tech Map) -These issues carried the same technical condition for the week (standing on the same column category on the Tech Map)

Legend: (Note: Trends are cast in the short term)

Up trends: These issues show continuing if not strong up trends. Look for trading buys now if risk-reward measures are appealing or if not, buy into slight dips.

Up trends needy of reactions or are reacting: These issues show continuing up trends but are showing some reactive adjustments due to profit taking. Look for pullbacks to short term support or a rally from such support to cast fresh buy trades.

Consolidations (Sideward trends): These issues are running through consolidation phases. Either wait for key range breaks or range trade and buy into a support bounce. Keep watch of possible range break bias in the following direction [~-up/down, ̂ -up, *-down).

Down trends needy of rallies or are rallying: These issues show continuing down trends but are undergoing a temporary/oversold rally. Lighten or sell into rebounds to resistance for now.

Down trends: These issues show continuing down trends. Stay out for now until better demand patterns appear.

Stock Code Color Guide:

Total Issues (change from last report)

US and European Markets Bullseye --- Page 5

US & Europe proceed to recover

• US markets drove higher after successfully showing a retest of support lows. This is what we wanted to see in order to condition a more lingering rebound. Prices have since rallied to or over one month highs and stills shows some rally momentum built in it its MACD

• Prices will now target following resistance zones as shown below

• Short term Support and Resistance estimates for US indices are the ff:

Dow: (S) 16,500 – (R) 17,250-17,500

SP500: (S) 1,955 – (R) 2,055-2,075

Nasdaq: (S) 4,487 – (R) 4,900-4,960

• US 10-Yr Bond Yields (roughly at 2.02%) edged down for the week after bond prices recovered. The 10-Yr Yield is now consolidating (between 19.05-23.00) after successfully holding over its August lows. Yield’s may need to narrow its range before any major decision its given

• European indices showed generally sideways shifts after its previous week’s rally. The German DAX was up 0.08% for the week while the French CAC was up 0.03%, and the English FTSE was down 0.59%. The FTSE and CAC have broken or is testing September highs while the DAX still has to test move back and test its Sept highs

* Simple Moving Averages: 20-Period 50-Period

Asian Markets Asia was mixed but showed more recoveries

• Asian markets did generally well as successful support braces allowed rallies to proceed

• China and Hong Kong outperformed after establish strong support bases as well

• Rising support frames, improving MACDs, and some key breaks over 1st resistance zones do show better recovery impulses

• The PSEi (7055.74 -83pts WoW) eased as it felt pressure over the overhang of resistance… this challenge was seen close to its September high of 7,209. But prices have established higher lows so far keeping rally prospects open. Prices need to break over this zone to up its target zone to 7,240 - 7455

Bullseye --- Page 6

* Simple Moving Averages: 20-Period 50-Period

Currencies & Commodities Dollar falls to support & rebounds, Euro &

Yen ease from Resistance; Gold climbs

• The US Dollar index (94.59 -0.31% WoW) was lower for the week after it encountered heavy resistance close to 97; the price slip pushed the Dollar below its rising trendline and fell to its 1-Yr MA (94.04). It has so far found some Support here

• The Euro index (113.58 unchanged WoW) was sideways for the week but did attempt to push over resistance when the Dollar fell to its 1-Yr MA… If a higher low is made then the Euro may re-angle up into the short term

• The Yen index (83.71 +0.64% WoW) [$¥119.46] was higher for the week but maintains a short term pattern after a failed attempt at resistance. The Yen needs to break over 84.26 to induce more upward recovery. Support is at 82.36

• Gold ($1,177.40 +1.89% WoW) was higher for the week and presented a very nice breakout from a pattern. The push over resistance ($1,156-$1,169) allowed it to free itself from this pattern and target $1,181-$1,208. Support is at $1,147

• Copper ($2.40 -0.74%) reacted but is still in rally mode

• Oil ($47.73 -3.56%) eased from last weeks’ strong move and may yet show some ranged recovery action

Bullseye --- Page 7

* Simple Moving Averages: 20-Period 50-Period

1-Yr MA