Stock Trading

Don’t Know Where To Start? Stock Market Investing Tips Will Help You!

For newbie in stock market, as strong start is to have stock market tips. Now, how do you get these stock market tips? There are lot of ways and to begin with, you can ask those people you know who are involved with the business and get their personal stock market investing tips. Now if your are bookish type of person, you may read lots of book in the library about stock market leading you to page to page stock market tips? But in my own point of view, there is no other easier way to get tons of stock market tips and that is to do it online.

Where can you get best sites for stock market tips or stock investing tips? Get it easily, just visit Read more…

Stock Market Tip and Investing Advice

Stock Market Investment Advice‘ is a white paper report featuring secrets of the world’s top investors, including the trailing stop and scaling strategies.-www.investmentu.com

Stock market investing advice

Beginner stock market investing advice is far popular already in the internet. The individual investor will find it hard to make money in stocks. Almost  many individuals are ready to invest in stocks right now. Yet to make lots of money means you need to study and studying takes motivation, which is very hard if all you want to do is impatiently throw your money into stocks.

If you hate to study then here are some stock investing tips.

Throw out the rulebook as there are no set rules for investing and there are no guarantees of success.

The best analysts are those who make informed decisions because they have detailed Read more…

Trading Band Exemptions for Some Stocks

The Philippine Stock Exchange (PSE) approved in August 2009 rules to exempt certain stocks from the price trading band or the limit in the increases or decreases of stock prices within the day.

Trading band: Max 50% price increase; max 40% price decrease

Stocks traded on the PSE currently have a limit of 50% in terms of price increases (price ceiling) and 40% in price decreases (price floor). This trading band is supposedly installed to protect investors from price volatility.

With the August 26 memorandum, the PSE agreed to lift the trading band in the following scenarios:

1. When trading resumes for securities that have been suspended for a period of one year or more;
2. When the Exchange determines that: (a) there has been an event or occurrence that may cause the price of the security to change drastically; or (b) the application of the trading band on the price may render impractical the trading of the security upon prior notice by the Exchange as may be warranted under the circumstances.

Stockbrokers see a benefit to the trading band exemption primarily with regard to the first scenario because, according to them, a stock suspended for more than a year will have to catch up with its fair market value upon resumption of trading.

Read more at pinoymoneytalk.com

Profit-taking for the Local Stock Market

Since many are taking advantage with most of their investments due to profit-taking in the past week, we are expecting that the local stock market to pull lower. This is what we see from our point of view. Check the article below and say your piece:

LOCAL STOCKS ARE SEEN becoming increasingly vulnerable to profit-taking despite the rosy economic backdrop here and abroad, analysts said.

The main-share Philippine Stock Exchange index rose 2.41 percent last week to 2,850.01 after the Federal Reserve said the recession gripping the United States was easing.

“There are two bright spots in the fundamentalists’ glasses today. First, inflation is at record lows. Second, this has pulled policy interest rates to similar levels as well. Furthermore, there are other bright spots developing. Most recently, although exports were reported to continue to slow, the pace at which it does has dissipated. Concerns on the budget gap for this year has largely been addressed with the successful bond float,” said Justino Calaycay Jr., a dealer at Accord Capital Equities.

He said corporate earnings did not look too bad as listed firms remained generally profitable and profit levels were “a lot more hope-inducing” in the second quarter compared to the first.

“Yet, the charts suggests caution. Technicians are singing the correction chorus. Indeed, we are currently enjoying a 50-percent year-to-date gain, give or take. While such is evidence of the magnitude of the positive sentiment, it alternatively raises the flag with ‘beware’ boldly written on it. A decline of a big magnitude is not entirely discounted,” Calaycay said.

Calaycay added that the market could go either way but noted that the bias would be toward a downside in the near-term but over the medium- to long-term, the momentum was still favorable.

Banco de Oro Unibank chief strategist Jonathan Ravelas said last week’s close suggested a test of the 2,875 to 2,900 levels.

“However, trading volume shows the current rally is waning. This is supportive of a topping out market,” Ravelas said.

A clear break of 2,780 would suggest that a reversal was in place, Ravelas said. Doris C. Dumlao

Entry Credit: http://business.inquirer.net

What is Ghost Month?

If you’re new to the world of Stock Market, you might be hearing the term “ghost month” by the investors/traders circle. Well, we visited some sites on how they view the Ghost Month as it influences business market for many. Read below:

* This years Ghost month starts on August and ends September.

The Ghost Festival is a traditional Chinese festival and holiday, which is celebrated by Chinese in many countries. In the Chinese calendar (a lunar calendar), the Ghost Festival is on the 14th night of the seventh lunar month.

In Chinese tradition, the seventh month in the Chinese calendar is called the Ghost Month, in which ghosts and spirits, including those of the deceased ancestors, come out from the lower world to visit earth. The Ghost Festival is the climax of a series of the Ghost Month celebrations. Traditionally, ancestor worshiping was an important part of the festivals, with activities including preparing ritualistic offering food, and burning hell money and bags containing cloth to please the visiting ghosts and spirits of the ancestors, as well as other deities. A very solemn festival of ancestor worshiping, the festival nevertheless represents a connection between the ancestors and the descendants, the living and the dead, earth and heaven, as well as body and soul.

So why does this matter to you? Well ghost month is embedded in the chinese tradition where you’re not supposed to spend unnecessarily during the ghost month. this really does happen every lunar ghost month of the year, as some foreign (Asian) funds do not like to make investments at this time. Stock trading is considered an unnecessary expense what this means for traders is less liquidity. If there’s nobody there to really buy up a stock then there’s really no way for stocks to go but sideways or even…. DOWN

Credit to: http://financemanila.net

*Bearish mood to persist as ‘ghost month’ rolls in

TRADING AT the stock market this week would still be influenced by crude prices and the performance of US stocks, analysts said, but consolidation is also expected during this “ghost month.”

“The outlook for the market remains bearish for the long and medium term,” said Jose L. Vistan of AB Capital Securities, Inc. “Short-term view looks cautiously positive as the near-term rally seems to be on shaky legs.”

He added that although last week’s rally might continue this week, the market still lacks the solid fundamentals to make it snap out of its downtrend.

The composite index last week made a surprising gain of 2.8% or 71.49 points to 2,584.21 as local investors focused on crude prices on Friday, ignoring the drop in US stocks.

Credit to: http://www.bworldonline.com

* Ask advice with any old timer in stock market and he’ll tell you to stay away from stocks during the Chinese ghost month. Indeed, the table below shows that stocks tended to perform poorly during this period (12 out of the last 19 years), registering an average loss of 4.1 percent.

PHISIX Performance during the Hungry Ghost Months (1987 – 2005)

*Source: Technistock, Philequity Research

Double whammy

This year is a double whammy of sorts because of the occurrence of a double ghost month. The Chinese lunar calendar (as the name implies) follows the cyclical movement of the moon. Therefore, in the Chinese calendar, a year has a total of 354 days or 11 to 12 days shorter than the solar year. To balance the lunar and solar calendars, a leap lunar month is added every three years. And this year, the leap month occurs in the seventh month with the regular seventh month from July 25 to August 23 and a leap seventh month from August 24 to September 21.

So far, the Philippine Stock Exchange Index (PSEi) is up 3.9 percent since the ghost month started last July 25. Will it stay up or will the jinx of the ghost month finally haunt it in the end? Only time will tell.

Trading simulation

Heeding the old advice of staying out of the stock market during the ghost months should have earned investors more money in their pockets. A simulation below shows that if one peso was invested in the PSEi in 1987 and a strategy of selling before the ghost month and buying it back afterwards was employed, the investment would now be worth P15.10 (or an annual compounded rate of 14.8 percent). Meanwhile, a simple buy-and-hold strategy would have resulted to only P5.01 (or an annual compounded rate of 8.6 percent).

Credit to: http://www.yehey.com/finance

*August is known to be the Chinese ghost month where the perception is that liquidity and the index takes a breather due to the Chinese tradition. However, it has been proven that this phenomenon does not have its usual hold on the market anymore. How will it be this year?

Credit to: http://www.absolutetraders.com

Will Philex Mining (PX) follow Meralco (MER) trend?

Big time stock market veterans might be on the verge of bid war in acquiring shares of ownership with Philex Mining (PX). Be expecting the two big group who are suspected to be responsible on Meralco’s (MER) sudden boom in price value for the past months will continue to do some bidding business!

To quote a post from pinoymoneytalk.com”

In just one week, the price of PX has ballooned by 36%, closing today (August 11) at P10.75.

Look at the recent 3 trading days’ price increase of PX:

* August 7: Closed at P9.00; up 13.9% from previous trading day
* August 10: Closed at P9.90; up 10.0%
* August 11: Closed at P10.75; up 8.6%

Are you interested in buying PX now? Buy at 10.50 or below. Target to sell at 12. But hold to buy at 9 just in case it goes south. Note, PX is quite into the bullish trend and our current market is not yet so BULLISH yet. So how much more if it is? Profit! This is just my view, if you take it, it’s up to you. Happy trading!

Meralco’s Rise and fall

Rise and fall of Meralco: Your questions answered
PHILEQUITY CORNER By Valentino Sy (The Philippine Star) Updated August 03, 2009 12:00 AM

We have received many queries on the recent price action of Meralco. Many are still befuddled on the steep rise and the equally sharp fall of its stock price. Last week, market watchers have been asking why Meralco shares have gone up to a closing price of P205 per share. They commented that at P205 per share it was already overpriced.

However, after Meralco reached P302.50 per share this week, the same people are questioning why it dropped when in fact it closed at P229 per share, which is 12 percent higher than the previous week’s close.

Because of the many queries of our readers and investors, we are changing the format of our column today to a question and answer (Q&A) type.

1) Why did Meralco’s share price zoom to astronomical levels these past few weeks?

In our article Turf Wars (see July 13, 2009 issue of The Philippine Star), we said that Meralco’s price action continues to defy gravity because the battle for control, given the limited free float circulating, is exerting upward pressure on the share price.

We mentioned the possible scenarios:

a) That the PLDT Group or the SMC group may be buying in the market to get a majority stake,

b) That fund managers sympathetic to either side may be accumulating

c) That a risk arbitrageur may be gobbling up the free float with the intention of selling the shares to the highest bidder

d) That maybe all of them are doing the buying at the same time.

Note that buying in the market is less costly than for one party to buy the other out which would trigger a tender offer for all the shares.

2) Why did it reach a staggering level of P302.50 per share?

It appeared that the race to own 50-percent stake + one share was decided by “photo finish”. Therefore that last one or two percent — which matter the most — commanded a huge premium. Buying two percent of the company at P300 per share to gain control is actually cheap.

Morover, many fail to realize that the bulk of the stakes of PLDT Group and SMC Group are priced at P90 per share (in SMC’s case it is even less because it is payable in three years).Thus, even if the winning bidder paid P300 per share for the last two percent, the average cost would just be a little over P90 per share.

3) Why did the Meralco drop sharply after reaching P300 per share?

To the experienced eye or seasoned investors, the block of shares that was crossed at P300 per share last Wednesday was a clear signal that the game was over. It was clear at that instance that one party sold and that the other party bought the deciding block.

It did not really matter which party won. It was apparent that when the fight for control was over, the demand for the shares and the buying frenzy would no longer continue.

4) Why is that block of shares traded on Wednesday a game-changer?

It was a game-changer because that block of shares represents nearly two percent of Meralco. Therefore it meant minus two percent for one side and plus two percent for the other side – a swing of around four percent.

5) So, who eventually got control of Meralco?

A quick look at the PSE quotation report last Wednesday showed a net foreign buying of P2.03 billion. A foreign broker known to be used by the PLDT Group and foreign funds sympathetic to PLDT crossed 6.7 million shares last Wednesday. Meanwhile, a local broker which represented one of the local funds sympathetic to the SMC Group crossed six million shares.

Apparently the funds that are allies to SMC Group flipped and sold to the highest bidder. Obviously, the PLDT Group now owns the majority of Meralco.

6) Why is getting control of Meralco important for PLDT?

The PLDT group sees real synergies between Meralco and PLDT. The company mentioned eight specific areas where they can work together, namely: powerline broadband, fiber optic backbone network, electric power poles, easements and rights of way, prepaid electricity service, business offices, ICT or data center, bill statement printing & enveloping and access to subscriber base.

Moreover, losing Meralco at this point, when it has already invested billions of pesos, would be disastrous for PLDT. In fact, PLDT’s share price has lagged the market during the battle for control of Meralco but when it was clear that PLDT maintained control, the stock price went up.

7) What do we do now with Meralco?

For those who have a short-term perspective, especially the punters, the answer was clear. If the fight for control is over, they have no choice but to sell.

For those with a long-term view, PLDT Group’s entry in Meralco brings many opportunities. Manny Pangilinan’s track record of turning companies around, cost-cutting and creating synergies to optimise profits and enhance shareholder value is definitely a positive for the stock. MVP has proven this in PLDT with its shareholder value and stock price steadily increasing since he has taken over.

While Meralco’s stock price has gone up too fast too soon, the company has a strong franchise, a good business model and sound fundamentals.

Is the turf war over?

As far as the fight for control of Meralco is concerned, the game is over. But in other battle turfs, the war would probably continue as both parties are involved in telecommunications, infrastructure and other businesses in the Philippines.

Lessons learned

The meteoric rise in the share price of Meralco and the sharp drop afterwards provide valuable lessons for investors.

1) One important lesson is that you should do your own research rather than following without thought what your brokers are doing. In Meralco’s case, most brokerage houses had recommended a SELL on Meralco when it first reached P90 per share. Their recommendation may have been based on fundamentals, not considering the battle for control.

But if you did your homework and realized that there was a battle for control and limited free float circulating, you would have known that the rich valuations were justified.

In the same manner, when the race to get majority is over, you should recognize that valuations will revert back to fundamentals.

2) Another lesson is that you should follow strictly your investment profile. If you are a short-term trader, you should be alert and nimble because while profit potential is high, volatility at the turn will be wild.

If you are a retail punter, it is important to do your homework rather than following blindly what bigger brokers or investors are doing. In this case, the block sale of Meralco may have triggered an immediate change in view from these investors. Instead of being buyers, they may have become sellers.

Finally, if you are a long-term investor, you should buy when the price is being offered at a bargain or as Warren Buffet and Benjamin Graham put it “you should buy when the price of a stock offers a huge margin of safety.”

Stock Trading Tips

Once you already got familiarized with the stock market and started doing stock trading, here are some of the useful tips that I learned from my stock trading experience:

Stock Trading Tip No. 1: First of all, I’ve seen a study conducted by ATR-Kim Eng Securities comparing the monthly stock returns on election years as against any other “normal” year. As seen from the graph, the month of August, historically is considered as the “ghost month” in stock trading since it is in this month that registered the lowest yield as against other months whether election year or not. You can also see from the graph that historically, the month of December gives the most yield and so it “may” be good to buy stocks on the month of August when stocks are low and later sell it on December when stocks prices are picking up.

Stock Trading Tip No. 2: Don’t buy in smaller volumes. If you have enough capital to spend in stocks, then try to buy huge volumes of your favorite stocks because if you buy in smaller volumes, then chances are you will incur higher stock trading fees such as broker’s commission, VAT, etc.

Stock Trading Tip No. 3: Transaction costs in buying vs. selling stocks. Each time you make a transaction, whether buying or selling stocks, you will incur transaction fees. Based on the transaction costs that I learned, it is “more expensive” for you to sell stocks than to buying it because selling stocks incurs a much higher transaction costs.

Read more…

Playing with the Stock Market

First and foremost, what is

the stock market? A stock market is an avenue for companies and corporations to offer their shares in the public. Once a company listed their shares in the stock market, then the public is free to buy and sell those

stocks. So what’s the pros and cons of

a company in listing their

stocks publicly?

Pros:

1. To raise capital. Companies hire an advisor called underwriter to formulate the Initial Public Offering (IPO) price of the company’s stock depending on several factors. Then executives of these companies will conduct a roadshow usually out of the country to entice foreign investors to buy these shares. The IPO price is the starting price of the company’s stock in

the stock market when it first traded publicly. An oversold stock mean that it did well in its

initial public offering. It means that a lot of investors bought the stock. It can be twice or thrice oversold depending on the turn out of the IPO.

Cons:

Since the company’s stock is now open for public, it can be subject to several external factors. Investors can now play its stocks. It can now be a subject for scrutiny by investors and analysts. Also, it can be a subject for manipulation. A company that did well, meaning, it beats analysts estimates on its earnings and profits will probably go higher as investors buy these shares. In contrast, those that did not meet or has some problems in liquidity, credit, labor, compliance, etc. will be dumped by the investors that will lead to the so-called ‘equity dry up’. This led to the recent bankruptcy of Lehman Brothers.

Read more…