The Philippine Stock Exchange Composite Index (PCOMP) or PSEi closed last Friday (May 14, 2021) at 6,269.36, up 0.53% for the day and up 10 points from the previous week’s closing of 6,258.71.
Nothing spectacular or unusual if one just looks at the closing level. But if one would look at the chart, he’d notice a hammer with a very long handle.
A hammer candlestick indicates that sellers overwhelmed buyers during the day but, by the close, the selling had been absorbed and buyers had pushed the price back to near the open.
So the PCOMP was down big time during the whole day but managed to eke out a gain eventually, thanks to investors buying up at the close specific names such as SM (+4.33%), AEV (+2.29%), TEL (+1.60%), SMPH (+1.52%), URC (+1.49%), and AGI (+1.40%).
No thanks though because the day’s gain of the index was not broad based. Actually, stocks heavily battered in the last few days, like PGOLD (-3.95%) and MEG (-7.8%!), were left heavily clobbered as they were throughout the day. It’s like a dead cat bounce (DCB) for the index with only the head bouncing and the whole body of the cat lying flat on the ground.
I hope though that next week we see a rotation among the index stocks, i.e., those recently sold heavily would see their own DCB and those bought up at the close last Friday sold down as traders realize profits.
Else, we continue to accumulate undervalued names while ignoring the pain of some red numbers in our portfolio.
Have a happy but safe Sunday everyone!
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