Download - Tech Outlook 1st Half 2013
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Presented by:Juan G. BarredoChief Technical AnalystCOL Financial
2013: 1ST HALF TECHNICAL OUTLOOK
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GLOBALREVIEW
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US SP500 continues with its channeled advance but
nears its major resistance; decision up aheadSP500 Review
Is proceeding to trade withinan advancing channel asupward momentum still exists
The upwards cascade maydrive a trading range between1,550-1,600 and 1,460 -1,400
However overbought levelsare near and major highs lastseen in 2007 & 2000 (at1,576) may present someshort term problems
USSP500
US: RANGE BOUND CHANNEL CONTINUES
Sup: 1,460 1,400Res: 1,550 1,600
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US Bonds are reacting from long term trend highs;
could this motivate the SP500 above major tops
US: STOCKS AND BONDS
10-Yr Bond
Fed Bond Buying Program
(QE1, QE2, QE3)
SP500
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VIX confirms incidence of Over Bullish sentiment and
Over Complacency = prologues to temporary tops
CROWD SENTIMENT
VOLATILITY INDEX
(VIX)
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OBSERVATIONS
The SP500 is nearing a major decision point
With Overbought threats and major Resistancenearby - it does call for greater degree of caution and
readiness (just in case short term support structuresbreak)
If major resistance can break, coupled with more
reactive substance in bonds, it could effect anextension of the equity advance
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Europe and China proceed to rebound but may face a
heavy obstacle into their range highs
EUROPE & CHINA: RESISTANCE UP AHEAD
Dow Jones EUROPE INDEX CHINA
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Continuing Down Trend in I-rates = Stimulating Flows
INTEREST RATES: PROCEED TO REMAIN LOW
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Even if rates pick up, it will only jolt the market temporarily
INTEREST RATES: A BOTTOM CAN BE BULLISH
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A Recent overbought Euro corrects within a wide band; while the
side-pinned US Dollar tries to stage a foothold in support
CURRENCIES: EURO & DOLLAR AT MIDPOINTS
US DOLLAR INDEXEURO INDEX
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Industrial Metals show strength in line with the global
recovery; Precious Metals sag for now
COMMODITIES: METALS SHOW VARIANCE
SILVERCOPPER GOLD
Sup: 1,600 - 1,571Res: 1,700 - 1,785
Sup: 3.60 - 3.40
Res: 3.81 - 3.91
Sup: 28.20 - 26.82
Res: 32.00 - 34.74
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Oil tests first resistance at $99 then $105; US Gas tests
major highs; Natural Gas reacts off its rally
COMMODITIES: ENERGY PRICES RANGED
NATURAL GASOIL US GASOLINE
Sup: 92.00 - 84.86
Res: 99.00 105.00Sup: 2.90 - 2.59Res: 3.40 - 3.63
Sup: 3.05 - 2.60Res: 3.60 - 3.90
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OBSERVATIONS
Headwinds may exist if major resistance calls upon a pullbackin Europe and China
Although the Low I-Rate environment should keep money
flows open for the longer term for equities
This longer term bullish view is favored by the continuing
recovery in Industrial metals
The Euro & Dollar may be treading on a short term inflection
point with a 60% chance of a resistance break scenario into
the greenback as suggested by the pullback in precious metals(this could present a short term threat to US Equities)
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PHILIPPINEMARKET REVIEW
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PSEi continues its bullish run with high momentum
overshadowing high RSI (Overbought) levels
*RSI levels above 70 are considered
Overbought; 80+ are more extreme
zones that can trigger reactions
** ADX levels (taken from DMI indicator)
greater than 30+ indicate high
momentum trends that can nurture
extended overbought levels
PHILIPPINES - PSEI
PHILIPPINES: STRONGER PERFORMANCE
PSEi Period RSI* ADX**
Daily 77 54
Weekly 84 51
Monthly 81 41
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PSEi shows an aggressive channel & stands above short
term support; these support zones should hold stops
PSEi
Aggressive swing induces the use
of sharper averages for support
stops
Watch short term support placed
by its 8-day (6,478) or 16-day
(6,385) Moving Averages
Short term resistance estimated at
6,650 then the psychological 7,000
Wider corrections may target the
32 to 65-day Mov Averages
PHILIPPINES - PSEI
FOCUS PHILIPPINES:
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PSEiToday
IF HISTORY CAN TELL
Bottom
SP500(2002-2006)
Bottom
Adjustments necessary to
reorient the confines of the
upward band
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Sup: 40.35 40.00Res: 41.25 41.95
Peso breached the P41.00 level and may scope the
lower end of its channels at P40.00- P39.40
PESO
Proceeds to Trend down
(stronger Peso versus Dollar)
Channel pattern proceeds
but could be occasionally
tempered by a temporary
rebound in the Dollar
Rallies to short or medium
term resistance make good
selling (Dollar) spots
PHILIPPINES - PESO
PHILIPPINE PESO: POWERING ON
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OBSERVATIONS
PSEi continues with its Up Trend and has shown no supportlapse as of yet
The Peso strength mirrors (and confirms) the country's
progressive path
We may be coming towards a short term bump (chance of
rain) as major resistance zones from a number of markets &
Overbought levels may need to draw out some reactive fixing
Until such time however (signed on by key breaks into shortterm averages), aggressive trade tactics are still warranted
protected by short term stop assignments
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NOTES ABOUT POTENTIAL REACTIONS:
Profit taking does not automatically translate to meandistribution
People may only be safeguarding gains and are not
necessarily becoming bearish
Key moving averages (i.e. 32 & 65-day MA) are all secure
price reactions above these averages are only corrections and
are not major fallouts nor down trends
These merits should keep buy back options open especiallyon rebounds from pullbacks to short term averages
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Trade Aggressive Markets with Aggressive Means
Rules of the Aggressive Trade
(1)Identify strong durable picks
High ADX >30
Rebounds from Prices
supported above 16-day or
32-day Moving Averages
(MAs)
Positive MACD values Preferably with RSI below
80%
TRADING STRATEGY
Buy Window
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Trade Aggressive Markets with Aggressive Means
TRADING STRATEGY
Buy WindowBuy Window
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Trade Aggressive Markets with Aggressive Means
Rules of the Aggressive Trade
(2)Always utilize protective stops
Adjust profit take stops
preferably to 8, 16, or 32-
day MAs (depending on
the acceleration seen)
Qualify your buy-backs
your issue must show your
aggressive parameters
again if not look for
another option
TRADING STRATEGY
Stop Triggered
No Buy-Back
Poor ADX
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TECH MAP IDEAS
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 regressed 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:
Up trends:These issues show continuing if not strong up trends much of which seem to
be technically stable and open to trading buys if risk-reward measures are
appealing.
Up trends needy of reactions or are reacting:
These issues show continuing up trends but a recent up stretch could show
(or is now showing) vulnerability to some profit taking and reactive
adjustments. Wait for a pullback to short term support or a rally from it to
cast fresh buy trades.
Consolidations (Sideward trends):These issues are running through consolidation phases await key range
breaks for new trend action. Stay sidelined for now but keep watch of these
(*) potential range breaks (up or down).
Down trends needy of rallies or are rallying:
These issues show continuing declines but a recent fall off could inspire (or
is engendering) a temporary rebound wave. Lighten or sell into rebounds to
resistance for now.
Down trends:
These issues show continuing if not strong down trends much of which
seem to be technically stable. Stay out for now until a better demand
pattern appears.
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SOME QUALIFIED PICKS
Some Qualifiers from
our Tech Maps Up
Trends
All Parameters Satisfied
Missing Parameter
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 pu rposes only and is not intended as an o ffer or solicitation for purchase or sale of a secur ity.*Data taken as of 2/18/2013
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SUMMARY
Philippine Up Trends proceed with support intact
Overstretched conditions or/and possible short term
resistance bumps may incite some profit taking incidents
but these reactive bouts should not force on a major
trend reversal
As Macro trends do stay prospective - reactions to
support will present better buy windows
Aggressive markets will warrant Aggressive trades
all justified by the use of protective stops and strong
filtering mechanisms to curb any potential risk
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It requires a greatdeal ofboldness and a great
deal ofcaution to make a great fortune, and
when you have it, it requires ten times as much
skill to keep it. Ralph Waldo Emerson
Thank You!
JUAN G. BARREDOCHIEF TECHNICAL [email protected]