tech outlook 1st half 2013

7/29/2019 Tech Outlook 1st Half 2013

1/28

Presented by:Juan G. BarredoChief Technical AnalystCOL Financial

2013: 1ST HALF TECHNICAL OUTLOOK


2/28


3/28

GLOBALREVIEW


4/28

US SP500 continues with its channeled advance but

nears its major resistance; decision up aheadSP500 Review

Is proceeding to trade withinan advancing channel asupward momentum still exists

The upwards cascade maydrive a trading range between1,550-1,600 and 1,460 -1,400

However overbought levelsare near and major highs lastseen in 2007 & 2000 (at1,576) may present someshort term problems

USSP500

US: RANGE BOUND CHANNEL CONTINUES

Sup: 1,460 1,400Res: 1,550 1,600


5/28

US Bonds are reacting from long term trend highs;

could this motivate the SP500 above major tops

US: STOCKS AND BONDS

10-Yr Bond

Fed Bond Buying Program

(QE1, QE2, QE3)

SP500


6/28

VIX confirms incidence of Over Bullish sentiment and

Over Complacency = prologues to temporary tops

CROWD SENTIMENT

VOLATILITY INDEX

(VIX)


7/28

OBSERVATIONS

The SP500 is nearing a major decision point

With Overbought threats and major Resistancenearby - it does call for greater degree of caution and

readiness (just in case short term support structuresbreak)

If major resistance can break, coupled with more

reactive substance in bonds, it could effect anextension of the equity advance


8/28

Europe and China proceed to rebound but may face a

heavy obstacle into their range highs

EUROPE & CHINA: RESISTANCE UP AHEAD

Dow Jones EUROPE INDEX CHINA


9/28

Continuing Down Trend in I-rates = Stimulating Flows

INTEREST RATES: PROCEED TO REMAIN LOW


10/28

Even if rates pick up, it will only jolt the market temporarily

INTEREST RATES: A BOTTOM CAN BE BULLISH


11/28

A Recent overbought Euro corrects within a wide band; while the

side-pinned US Dollar tries to stage a foothold in support

CURRENCIES: EURO & DOLLAR AT MIDPOINTS

US DOLLAR INDEXEURO INDEX


12/28

Industrial Metals show strength in line with the global

recovery; Precious Metals sag for now

COMMODITIES: METALS SHOW VARIANCE

SILVERCOPPER GOLD

Sup: 1,600 - 1,571Res: 1,700 - 1,785

Sup: 3.60 - 3.40

Res: 3.81 - 3.91

Sup: 28.20 - 26.82

Res: 32.00 - 34.74


13/28

Oil tests first resistance at $99 then $105; US Gas tests

major highs; Natural Gas reacts off its rally

COMMODITIES: ENERGY PRICES RANGED

NATURAL GASOIL US GASOLINE

Sup: 92.00 - 84.86

Res: 99.00 105.00Sup: 2.90 - 2.59Res: 3.40 - 3.63

Sup: 3.05 - 2.60Res: 3.60 - 3.90


14/28

OBSERVATIONS

Headwinds may exist if major resistance calls upon a pullbackin Europe and China

Although the Low I-Rate environment should keep money

flows open for the longer term for equities

This longer term bullish view is favored by the continuing

recovery in Industrial metals

The Euro & Dollar may be treading on a short term inflection

point with a 60% chance of a resistance break scenario into

the greenback as suggested by the pullback in precious metals(this could present a short term threat to US Equities)


15/28

PHILIPPINEMARKET REVIEW


16/28

PSEi continues its bullish run with high momentum

overshadowing high RSI (Overbought) levels

*RSI levels above 70 are considered

Overbought; 80+ are more extreme

zones that can trigger reactions

** ADX levels (taken from DMI indicator)

greater than 30+ indicate high

momentum trends that can nurture

extended overbought levels

PHILIPPINES - PSEI

PHILIPPINES: STRONGER PERFORMANCE

PSEi Period RSI* ADX**

Daily 77 54

Weekly 84 51

Monthly 81 41


17/28

PSEi shows an aggressive channel & stands above short

term support; these support zones should hold stops

PSEi

Aggressive swing induces the use

of sharper averages for support

stops

Watch short term support placed

by its 8-day (6,478) or 16-day

(6,385) Moving Averages

Short term resistance estimated at

6,650 then the psychological 7,000

Wider corrections may target the

32 to 65-day Mov Averages

PHILIPPINES - PSEI

FOCUS PHILIPPINES:


18/28

PSEiToday

IF HISTORY CAN TELL

Bottom

SP500(2002-2006)

Bottom

Adjustments necessary to

reorient the confines of the

upward band


19/28

Sup: 40.35 40.00Res: 41.25 41.95

Peso breached the P41.00 level and may scope the

lower end of its channels at P40.00- P39.40

PESO

Proceeds to Trend down

(stronger Peso versus Dollar)

Channel pattern proceeds

but could be occasionally

tempered by a temporary

rebound in the Dollar

Rallies to short or medium

term resistance make good

selling (Dollar) spots

PHILIPPINES - PESO

PHILIPPINE PESO: POWERING ON


20/28

OBSERVATIONS

PSEi continues with its Up Trend and has shown no supportlapse as of yet

The Peso strength mirrors (and confirms) the country's

progressive path

We may be coming towards a short term bump (chance of

rain) as major resistance zones from a number of markets &

Overbought levels may need to draw out some reactive fixing

Until such time however (signed on by key breaks into shortterm averages), aggressive trade tactics are still warranted

protected by short term stop assignments


21/28

NOTES ABOUT POTENTIAL REACTIONS:

Profit taking does not automatically translate to meandistribution

People may only be safeguarding gains and are not

necessarily becoming bearish

Key moving averages (i.e. 32 & 65-day MA) are all secure

price reactions above these averages are only corrections and

are not major fallouts nor down trends

These merits should keep buy back options open especiallyon rebounds from pullbacks to short term averages


22/28

Trade Aggressive Markets with Aggressive Means

Rules of the Aggressive Trade

(1)Identify strong durable picks

High ADX >30

Rebounds from Prices

supported above 16-day or

32-day Moving Averages

(MAs)

Positive MACD values Preferably with RSI below

80%

TRADING STRATEGY

Buy Window


23/28


TRADING STRATEGY

Buy WindowBuy Window


24/28


Rules of the Aggressive Trade

(2)Always utilize protective stops

Adjust profit take stops

preferably to 8, 16, or 32-

day MAs (depending on

the acceleration seen)

Qualify your buy-backs

your issue must show your

aggressive parameters

again if not look for

another option

TRADING STRATEGY

Stop Triggered

No Buy-Back

Poor ADX


25/28

TECH MAP IDEAS

GREEN

RED

BLACK

-These issues improved their technical condition for the week (moving

to the left of their column category on the Tech Map)

-These issues regressed on their technical condition for the week

(moving to the right of their column category on the Tech Map)

-These issues carried the same technical condition for the week

(standing on the same column category on the Tech Map)

Legend:

Up trends:These issues show continuing if not strong up trends much of which seem to

be technically stable and open to trading buys if risk-reward measures are

appealing.

Up trends needy of reactions or are reacting:

These issues show continuing up trends but a recent up stretch could show

(or is now showing) vulnerability to some profit taking and reactive

adjustments. Wait for a pullback to short term support or a rally from it to

cast fresh buy trades.

Consolidations (Sideward trends):These issues are running through consolidation phases await key range

breaks for new trend action. Stay sidelined for now but keep watch of these

(*) potential range breaks (up or down).

Down trends needy of rallies or are rallying:

These issues show continuing declines but a recent fall off could inspire (or

is engendering) a temporary rebound wave. Lighten or sell into rebounds to

resistance for now.

Down trends:

These issues show continuing if not strong down trends much of which

seem to be technically stable. Stay out for now until a better demand

pattern appears.


26/28

SOME QUALIFIED PICKS

Some Qualifiers from

our Tech Maps Up

Trends

All Parameters Satisfied

Missing Parameter

Disclaimer: All opinions and estimates constitute the judgment of COL s Equity Research Dept as of the date of the report and are subject to change without notice.

The report is for informational pu rposes only and is not intended as an o ffer or solicitation for purchase or sale of a secur ity.*Data taken as of 2/18/2013


27/28

SUMMARY

Philippine Up Trends proceed with support intact

Overstretched conditions or/and possible short term

resistance bumps may incite some profit taking incidents

but these reactive bouts should not force on a major

trend reversal

As Macro trends do stay prospective - reactions to

support will present better buy windows

Aggressive markets will warrant Aggressive trades

all justified by the use of protective stops and strong

filtering mechanisms to curb any potential risk


28/28

It requires a greatdeal ofboldness and a great

deal ofcaution to make a great fortune, and

when you have it, it requires ten times as much

skill to keep it. Ralph Waldo Emerson

Thank You!

JUAN G. BARREDOCHIEF TECHNICAL [email protected]

tech outlook 1st half 2013

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