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Philippine Stock Exchange Index (PSEi) Update as of November 11, 2016

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The Philippine stock market has started to tumble down even before the pronouncement of president-elect Donald Trump of the US. Foreign investors started selling billions worth of shares in the first trading days of November 2016. The nearly P2.5 billion Net Foreign Selling (NFS) last November 11, 2016 was the biggest NFS in the past 30 trading days.

Philippine Stock Exchange Index - Foreign Fund Flow - November 14, 2016

Philippine Stock Exchange Index - Volatility- November 14, 2016

Philippine Stock Exchange Index - Volume - November 14, 2016

The risk level derived from statistical volatility has increased. It is still within the low-risk level, however. Last week, we saw volume surges that were beyond PSEi’s 30-day volume average. If the index is going down and volume is going up, that means the sell-off has not been neutralized yet.

This is the Monthly Chart of the Philippine Stock Exchange Index (PSEi). The support near 6,670 is at the brink of being tested. If NFS won’t calm down, that support level might be broken down. If and when that happens, the trend is poised to go near the 5900-6000 support level. It’s all the more that everyone must invest with caution.

When I said “invest with caution”, I didn’t say “be fearful”.

Fear is a product of not knowing what you’re doing. Fear is a product of acting based on random, angst-full but data-less opinions you read on Facebook. Fear is an outcome of the “buy now, ponder later” strategy.

Investing with caution means reviewing your investment goals, investment horizon, risk appetite, and the data of the stocks you’re invested into.

A PSEi that is trending down is not a call to abandon your portfolio. It’s all the more that you need to study the companies you’re invested into so you can identify which ones are good to buy or top up with at a bargain price.

I also advise that you should not take someone else’s opinion on an “as is, where is” basis, most especially if the person’s opinion is not an evidence-based one.

By data, I’m referring to fundamental and technical statistics. Use fundamental stats to determine if the company has healthy financial sheets. If it has, is it sustainable?

Use technical stats to determine your entry and exit points. Do not forget to set your trailing stop-loss, too.

Philippine Stock Exchange Index - Monthly Chart - November 14, 2016

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