VUL Technical Analysis: Is Its Explosion Above the 10SMA Sustainable?

VUL Technical Analysis

Vulcan Industrial and Mining Corporation (VUL) closed at 1.36 per share, up by 10.57 percent, as of 12 noon of September 10, 2019. The total turnover value is at P116 million.

Foreign investors are not the main movers of VUL this morning since they only registered a Net Foreign Selling worth half a million pesos.

Vulcan Industrial and Mining Corporation (VUL) - Daily Chart Intraday 1 - 9.10.2019

I am not going to cite the foreign investors’ stance for year-to-date since it’s an insignificant amount.

VUL registered an intraday high of 1.60 per share this morning with an intraday low of 1.33 per share.

With the current price being closer to the intraday low than the intraday high, does this mean there’s a huge percentage of chance for the gap to be filled down this afternoon?

Continue reading my analysis so you’ll have a data-driven projected answer to that question.

My 10SMACD combo for VUL remains valid. In fact, it has been valid since August 20, 2019. So if you are a subscriber of Equilyst Analytics or if you attend The Evergreen Strategy in Trading and Investing in the Philippine Stock Market seminar, you could have entered a position on VUL on that day. My Momentum Power Indicator was bullish on that day, too.

Here are my 6 proprietary methods, which I teach in my Evergreen Strategy in Trading and Investing in the Philippine Stock Market seminar.

Lesson 1: how to identify the best stocks to trade
Lesson 2: how to check if the current trend is more likely to continue
Lesson 3: how to know the true market sentiment
Lesson 4: how to identify a confirmed buy signal
Lesson 5: how to identify the best price range to trade
Lesson 6: how to sell more logically and less emotionally

The Evergreen Strategy in Trading and Investing in the Philippine Stock Market SEMINAR

Philippine Stock Market Seminar by Jaycee De Guzman of Equilyst Analytics

Despite the appearance of a red candlestick this morning, the last price maintains its position above the 10SMA. This makes the 10SMACD combo maintain its valid status.

However, due to that red candlestick, my Momentum Power Indicator is already bearish. If you attended my Evergreen Strategy seminar, you know that it is not a signal to enter a new position.

RSI is in the neutral territory and it’s upward-sloping. Meaning to say the tide is still in favor of the bulls as far as what transpired in the past 30 trading days is concerned.

The risk level of VUL is already moderate due to its historical volatility score of 64 percent. I classify low- to moderate-risk stocks as newbie-friendly stocks. Don’t quote me wrongly. Not because this stock is a newbie-friendly stock, it doesn’t mean you should blindly enter a new position now because the Momentum Power Indicator is still bearish.

The positive DMI is hovering the negative DMI and the ADX is moving above 25 points. This confirms that the uptrend is still strong as far as what happened in the past 30 trading days is concerned.

The immediate support is near 1.00 and the immediate resistance is near 1.45.

Trade-Volume Distribution

Last Price: 1.36
VWAP: 1.457378187
Most Traded: 1.43 – 1.58
Most Voluminous: 1.43 – 1.58

Vulcan Industrial and Mining Corporation (VUL) - Trade Volume Distribution 1 - 9.10.2019

The dominant range is between 1.35 and 1.45. You might say that this is bearish because the dominant range is closer to the intraday low than the intraday high. I say the otherwise. Why? Since VUL gapped up this morning, whether the dominant range will register itself closer to the intraday low than the intraday high or vice versa, it’ll still be a bullish dominant range.

Does this mean my Momentum Power Indicator for VUL is bullish?

No. It’s bearish.

Why?

The dominant range is not the only basis for the bullishness of my Momentum Power Indicator. There are 3 more components that need to be considered. You know what those 3 other components are if you are a subscriber of Equilyst Analytics or if you attended my The Evergreen Strategy in Trading and Investing in the Philippine Stock Market seminar.

True Market Sentiment

True Market Sentiment of VUL as of Sep-10-2019 at 12:00PM, with a last price of 1.3600.
4 of the top 10 brokers registered a positive Net Amount
5 of the top 10 brokers registered a higher Buying Average than Selling Average
True Market Sentiment: BEARISH
Top 10 Players’ Buying Average: 1.4527
Top 10 Players’ Selling Average: 1.4537
Bonus Info:
9 out of 71 participants or 12.68% of all participants registered a 100% BUYING activity
14 out of 71 participants or 19.72% of all participants registered a 100% SELLING activity

Vulcan Industrial and Mining Corporation (VUL) - True Market Sentiment 1 - 9.10.2019

The risk-averse mood of the top 10 brokers reflects in the bearish true market sentiment.

I’ve observed that traders hyped up VUL from 1.58 to 1.60, but it wasn’t sustained due to the lack of a strong catalyst to maintain the price closer to the intraday high.

Those who entered a new position on VUL between 1.50 and 1.60 are now the ones worried. I’d say you should be fine, technically speaking (not emotionally speaking), for as long as you know where your trailing stop loss is.

Remember lesson # 6 during my Evergreen Strategy in Trading and Investing in the Philippine Stock Market seminar. Review your handouts, please.

Recommendations

If you have VUL..

Do you have VUL because it’s still trading above your trailing stop loss? If your answer is affirmative, you have two data-driven options. It’s either you hold your position or top up within the dominant range.

Yes, do not top up at any random price just like what those who follow a Buy Below Price do. Trading within the dominant range is more strategic and realistic than buying at any price below the Buy Below Price.

If you attended my Evergreen Strategy in Trading and Investing in the Philippine Stock Market seminar, I don’t need to bend over backward explaining or justifying why it is so.

If you don’t have VUL…

If you are yet to enter a new position on VUL, I don’t suggest entering a new position right now because of two reasons. Firstly, the Momentum Power Indicator is bearish. Secondly, the last price is closer to the immediate resistance than the immediate support. That means you have a bigger potential risk than your potential reward at this moment.

You’re better off waiting for a pullback closer to the immediate support or a breakout above the immediate resistance for a more attractive reward-to-risk ratio.

Nonetheless, at the end of the day, it’s up to your satisfaction level for whatever reward-to-risk ratio you’ll get relative to the position of the last price to the immediate support and resistance levels of VUL.

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About the Author
Jaycee De Guzman is an online business strategist, an equity analyst, an entrepreneur, and a computer scientist by profession. Visit his website at www.jayceedeguzman.com.

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