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MEG – Megaworld Corporation – Technical Analysis – November 18, 2016

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Megaworld Corporation (PSE:MEG) might have hit its support near the 3.68 area, which is 10 fluctuations higher than the support that I’ve plotted near 3.58. You can’t be very complacent at this stage yet, however. If you will observe the behavior of MEG over the past three months, you’ll notice on the chart that it made a series of dead cat bounces (DCBs). Watch or listen to this video to learn more about a DCB.

MEG  is both bearish on a short-term and long-term perspective as far as the alignment of the Simple Moving Averages (10-, 20-, and 200-day SMAs) on my chart is concerned. The longer-term SMAs hover the shorter-term SMAs. MEG’s current price is below all three SMAs.

MEG must break out above the resistance near 4.11 for this stock to have a higher chance of crossing above the 20-day SMA. MACD must have already crossed above the signal line by the time the 10-day SMA crossed above the 20-day SMA, which is a confirmation of a bullish sentiment on a short-term period.

The 3.00-3.10 range is the main or major support level of MEG. However, the support near 3.58 must be broken with a strong selling momentum for the chance of drawing closer to 3.00-apiece will become highly possible.

Nonetheless, participants for November month to date have registered a tied-up buy and sell averages at 3.89-apiece. Nearly 20 percent of this month’s participants have registered a 100 percent buying confidence on MEG.

Apparently, foreign fundies are not yet done disposing their shares.

MEG - MEGAWORLD CORPORATION - Chart - November 18, 2016

Top 10 Players’ Sentiment

Participants with a 100% Buying and Selling Activity from Oct-03-2016 to Oct-27-2016 at 03:30PM:

  • 23 out of 117 participants or 19.66% of all participants registered a 100% BUYING activity
  • 3 out of 117 participants or 2.56% of all participants registered a 100% SELLING activity
  • Top 10 Players’ Buying Average: 3.8994
  • Top 10 Players’ Selling Average: 3.8960

MEG - MEGAWORLD CORPORATION - Top 10 Players - November 18, 2016

Online Foreign Brokers’ Transactions

From October 3, 2016 to October 27, 2016, 11 out of 11 active online foreign brokers traded MEG.

  • Online foreign brokers’ Buy Average: PHP3.90
  • Online foreign brokers’ Sell Average: PHP3.88
  • Number of net buyers among the participating online foreign brokers: 4 out of 11
  • DEUTSCHE bought the biggest number of shares among online foreign brokers amounting to PHP249,252,160.00.
  • UBS sold the biggest number of shares among online foreign brokers amounting to PHP245,928,090.00.

MEG - MEGAWORLD CORPORATION - Foreign Brokers - November 18, 2016

Foreign Fund Flow

On a 30-day trading period, MEG is on a Net Foreign Selling worth PHP419,639,389.00.

MEG - MEGAWORLD CORPORATION - Foreign Fund Flow - November 18, 2016

Risk Level

MEG has a moderate risk level based on my proprietary risk level indicator.

MEG - MEGAWORLD CORPORATION - Volatility - November 18, 2016

Volume

See the downtrend pattern on MEG’s volume for the past 6 trading days.

MEG - MEGAWORLD CORPORATION - Volume - November 18, 2016

Conclusion

For position traders, you have the option to anticipate the crossing of the MACD above the signal line and the touching of the price above the 10-day SMA. Read this article to learn how I use the 10-day SMA and MACD to identify potential entry signals.

Notice that while the price is slowly inching up, the volume is in a downtrend pattern. When the price is moving up but volume is going down, it is believed that the ascent in price may not be sustainable. However, that isn’t true all the time. Real-time monitoring on MEG’s price movement is advised if you plan to day-trade, swing-trade, or whatever-kind-of-play-you-like with this stock.

If you’re eyeing MEG for your long-term portfolio, it is not a bad idea to consider fundamental criteria in your decisions. MEG’s net income after tax for 9M2016 is 12 percent higher than the same period last year. Its 3Q2016 net income after tax is almost 11 percent higher than the same period last year. Then, you can use technical analysis to identify your entry and exit levels.

Use the data I’ve presented above so you can make an informed decision.

If you have questions, feel free to comment below. Sign-up in our free newsletters so we can inform you once we go live with our all-new services.

This Post Has 4 Comments
  1. Hi! I am eyeing for these three, Ali, Meg And JFC. I already bought MEG at 3. 7 now Its on 3. 85. The trend was not good as of this moment. Also the news regarding BPOs are not good. Do you think I need to sell it now? If so, can you recommend me a stock good for long term?

    thanks

    1. Hi, Jane!

      Thank you for reaching out.

      If you bought MEG at 3.70-apiece, that means it is up by 4.05 percent (before tax and fees) in your portfolio. The combined taxes and fees in one set of a buy and sell transaction could eat up a total of 2.50 percent of your portfolio.

      I cannot give an objective answer to the question “Do you think I need to sell it now?” because the only right answer to that question is the answer that is based on your investment goal, your investment horizon, and your risk tolerance. Let me help you find the right answer to that question by asking you, “What is the percentage of risk tolerance that you can only handle?”

      If your answer is 10 percent, the 7.50 percent (you’ll get 10 percent when you add the nearly 2.50 percent tax and fees, anyway) below your initial buying price can serve as your trailing stop-loss (TSL). In other words, if you have a 10 percent risk tolerance, you can stomach MEG’s movement all the way to 3.42-apiece. You have two options now. It’s either you set your TSL at 3.42 or the support that I’ve mentioned in my post, which is 3.58.

      If your position is big enough, you have the option to sell in tranches if the price is moving down instead of selling everything in a one-time approach. Please note that I am not “recommending” that you do this or that. I am laying down your options so you can choose whichever suits you best.

      Now, if and when MEG’s price continues to move up, your trailing stop-loss must adjust (upward), too.

      Click here to know more about a TSL.

  2. I am sure this post has touched all the internet people, its really really pleasant piece of writing on building up new webpage.

    1. Hi, Ben.

      Thank you for the positive feedback. Don’t forget to tell your friends and family to visit and register to Stock Signals Philippines.

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