Bullseye ReportWeekly Overview

Authored by:Juanis G. BarredoVP; Chief Technical AnalystCOL Financial Group Inc.(632) 636-5411Juanis.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

Mar 13, 2017

WEEK’S HIGLIGHTS• The Philippines’ PSEi lost 100-pts for the week and swings close to

its range lows threatening support

• Average Daily Value Turnover was improved at P7.4-B and comingfrom P5.5-B the week previous

• Net foreign flows were negative again but this time by only P57-M as against P2.4-B the previous week

• The PSEi (at 7,146) dropped heavily on Friday after a last minute sell off in some blue-chips drove the index close to its support. An unusual last second sell-off in SM (-9.24% on Friday) pressed the index heavily lower, likely because of that exchange rule that allows for such outlandish last second buy-ups and sell-downs… that can result to woes to everyone else. Hopefully though that this selling blip can be remedied today with a realistic counter move that can effect a rally. If not then we have something to worry about as the index stands very near its 7,123 support.

• US indices were lower as corrective tugs from recent overbought levels moved to manage this extendedness. US Indices now find themselves near short term support and such a support test may show some choppy action. The Dollar was lower for the week after a heavy Friday sell-off (and Euro-rally) – this may challenge the rally spirit of the Dollar despite the expectation of a rate hike this week by the FED. Oil and Gold remained in corrective action.

Focus ItemsHighlight 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 7,247 7,146 (100.85) (1.39) 4.47

Peso-$ 50.4 50.36 (0.040) (0.08) 1.29

MSCI Phils 33.73 33.76 0.03 0.09 4.20

PLDT US 28.76 30.23 1.470 5.11 9.73

DJIA 21,006 20,903 (102.73) (0.49) 5.77

SP500 2,383 2,373 (10.52) (0.44) 5.97

Nasdaq 5,871 5,862 (9.02) (0.15) 8.89

England 7,374 7,343 (31.18) (0.42) 2.80

Nikkei 19,469 19,605 135.44 0.70 2.56

Hong Kong 23,553 23,569 15.95 0.07 7.13

China 3,218 3,213 (5.55) (0.17) 3.52

US 30yr Bond 149.95 147.27 (2.68) (1.79) (1.69)

10-Yr Yield 24.92 25.82 0.900 3.61 5.56

Dollar Indx 101.55 101.11 (0.44) (0.43) (1.15)

Gold 1,226.50 1,201.40 (25.10) (2.05) 4.32

Oil 53.33 48.49 (4.84) (9.08) (9.74)

CRB Index 189.72 182.65 (7.07) (3.73) (5.12)

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

*Source: PSEPER (Price/Earnings Ratio) data uses four-quarter trailing financial data

2017 Net Outflows of P7.17-B

Philippines: PSEi & PesoBullseye --- Page 3

Recommendation: Hold watch support

Support: 7,123 - 6,500 Resistance: 7,355 - 7,402 /7,720

• The PSEi reacted 100-pts for the week, pressured back to short term support after resistance failed to break

• Resistance holds between 7,355-7,402 and has so far obstructed its recent rally

•Given that resistance failed to break, expect a longer corrective phase to ensure and now we move to watch support at 7,123

•We do hope that 7,123 can hold to keep its sidewards shift alive - if this breaks next is at 6,500

Recommendation: Buy $ into support dips

Support: 49.45 - 48.50 Resistance: 50.40 /51.60

• The Peso (at P50.36) firmed slightly against the Dollar & so far prevents itself from weakening below next resistance

• Its weekly MACD leans more on corrective action which may inhibit too much devaluation threats for the meantime –next resistance after 50.40 then 51.60

•A rally in the Dollar did put pressure back into the currency – but the Dollar remains in a consolidation after its rally

• In fact last Friday saw more weakness into the Dollar which may allow the Peso the ability hold below the 50.40

Wave-3 low

Tech Map

AUB 2GO ABS* MEG* AR AGIBLOOM ALCO AC MER^ BHI CAL

EW ANI AEV MPI* CHP CPGMCP ANS ALI MRSGI DMC DIZPIP BDO AP MWC FNI EMP

PIZZA BEL APC MWIDE* HOUSE GERIPLC BPI AT NOW^ LC HLCM

X CHIB CEB* OV MARC ISCROWN CIC PGOLD PSE JFC

EDC CNPF^ PHEN VLL LRGLO COAL PNB NIIMI COSCO* PX NIKLPNX DAVIN RCB OREPSPC DD RFM PCORSCC DMPL ROCK PHASGI DNL RRHI^ PXP

SMC EEI SBS* RLCSTI ELI SLI RWM

UBP FDC* SMPH* SECBFGEN TAPET* SHLPHFLI* TECH SM

FOOD* TEL SSIFPH TUGS URC

GTCAP UNIHVN VITA*ICT

ION*JGSLPZLTGMA

MAXSMBT*

8 (+2) 19 (-6) 58 (-3) 10 (-4) 23 (+11)

Some Key Stocks and Trend CallsBullseye --- Page 4

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 MarketsBullseye --- Page 5

US corrects slightly to short term support:

• US markets eased gently slipping closer to short term support and testing this demand ledge. Recently heavy overbought levels have asked for this retreat and now the three main US indices have pulled back to their respective 16-day MAs. If these demand arms can hold then some rally back to recent highs or more can be shown; if they break then a further slip back to their 32-day MA may be seen

• Short term Support and Resistance estimates for US indices are shown below:

Dow: 20,750-20,500 – (R) 21,300-21,650

SP500: 2,355-2,335 – (R) 2,400-2,425

Nasdaq: 5,812-5,768 – (R) 5,960-6,000

• European indices were slightly lower for the week as well but unlike the US, the FTSE, DAX & CAC show possible signs of divergence (although it may be a little too early to tell). A rally in the Euro (see page 7) may add pausing power to their recovery. Only Spain did very well showing a 2.12% swing up after a recent breakout. But the IBEX is now overbought

• The US 10-Yr Bond Yield ($tnx) climbed strongly, breaking over its sidewards range. Perhaps this in preparation for a possible rate hike in the FED’s March 15 session. Despite this the Dollar did not respond comparably and even pushed significantly Friday… could this be telling us that the Yield rise may stall?

* Simple Moving Averages: 20-Period 50-Period

Asian MarketsAsia remains mixed; Phil & Thailand drawback:

• Asian markets showed mixed reads again last week with Thailand, the Philippines and China showing corrective drives. Many seem to be drawing the inclination to correct.

• The PSEi (7,146 -1.39% WoW) slid 100-pts for the week and withdraws to the lower end of its consolidation range. In fact it now threatens its essential support low of 7,123. But the index was weighed down after a possibly exaggerated selloff in SM on Friday (-9.24%). If a counterrally manifests here then it could provide some lift away from support. But we may yet have to deal with a few others that have neared or broken support. This drives us to raise some careful consideration and defensiveness over a possible support breach.

Bullseye --- Page 6

* Simple Moving Averages: 20-Period 50-Period

Asian Indices (for the week) YTD RSI

S Korea 0.89% 3.50% 56.70%

Japan 0.70% 2.40% 59.33%

Malaysia 0.63% 6.21% 64.23%

India 0.39% 9.79% 65.84%

Singapore 0.35% 8.45% 59.36%

Indonesia 0.10% 1.33% 52.34%

Hong Kong 0.07% 8.16% 48.67%

China -0.17% 3.77% 49.80%

Philippines -1.39% 4.47% 41.33%

Thailand -1.68% 0.14% 33.72%

Currencies & CommoditiesDollar index falters, Oil and Gold fall:

• The US Dollar index (101.11 -0.43% WoW) was lower for the week and may have broken its rallying trendline. This goes against the recent move of Bond Yields to climb – would this suggest that the Dollar rally is exhausting? (Sup 100.85-99.57/Res 102.27)

• The Euro index (106.74 +0.48% WoW) rallied for the week proceeding with its break over a corrective trendline – this may give more rally power into the Euro; weakness into the Dollar (Sup 104.95/ Res 106.80- 108.29)

• The Yen index (87.11 -0.66% WoW) [$¥114.78] was lower for the week but the faltering Dollar may limit its reactive swing (Sup 87.00-86.49 / Res 89.59-91.30)

• Gold ($1,201.40 -2.05% WoW) corrected heavily but reaches its next support (50% Fibo Ret) and could attempt some rally action soon. (Sup 1,197-1,179 /Res 1,265-1,287)

• Copper ($2.60 -3.76% WoW) broke support of its consolidation and swung into a correction. It has reached next support levels however (Sup 2.55-2.45 /Res 2.69-2.77)

• Oil ($48.49 -9.08% WoW) also broke down from its consolidation pattern and took into a selling wallop. Falling quickly below its 3-month lows, the commodity was plagued by rising inventories and a rise up in US Oil rig count. (Sup 47.18-45.00/ Res 51.22-53.00)

Bullseye --- Page 7

* Simple Moving Averages: 20-Period 50-Period