Presented by:

Juan G. Barredo
Chief Technical Analyst
VP –Sales & Customer Support
COL Financial Group Inc.
Presented by:
Juan G. Barredo
Chief Technical Analyst
VP –Sales & Customer Support
COL Financial Group Inc.
Outline:

• Looking for Alpha: Making your

trades count
Trading
• Trading in Your Zone
• Accepting & Managing Risk
to Alpha
• Gauging the Market’s Mood
• Stock Reviews

5
Looking for Alpha: Making Your Trades Count

(𝜶) ALPHA DNL vs PSEi (2 Yrs)

The excess returns of a

fund (investment)
relative to the return of
a benchmark index
INVESTOPEDIA

6
Looking for Alpha: Making Your Trades Count

BDO vs PSEi (1 Yr) MBT vs PSEi (1 Yr)

Outperformance Underperformance

7
Can I make good money in the market easily?
Yup…

8
Can I do better than an index fund?
Yup… but now you gotta work hard
1969-2009 George Warren S&P500
Soros Buffet
CAGR: +26.3% +21.4% +9.4%

Know-nothing
Investors

Professional Professional
Trader Investor

http://hedgefund.blogspot.nl/2010/11/portfolio-manager.html

9
Know this…

• An index (fund) is 100%

invested all of the time
• Yes, including being 100%
invested during declines
• If you can avoid/control your
exposure into declines and get
back into the market at the
right time, you can conceivably
beat the index
Ah! Limiting
risk is the key!

10
But Emotions get in the way:

FEAR GREED

The FOUR FEARS ‘TRADING in the ZONE’

• Fear of Missing Out • Your mind and the
• Fear of Loss market must be in sync
• Fear of being Wrong • Right Mind, Right Action!
• Fear of Letting a Win
Turn into a Loss

11
Trading in your Zone:
TRADING (Short-Medium-Long term):
Hunt for many 5% to 20% short-
term winners, where the goal is to
Choose your trend compound capital quickly by
master then master actively moving in and out of them
your art! • Trend Trading
• Swing Trading
• Momentum Trading
• Day Trading

* Do not switch styles mid-stream

a trade

12
Trading Styles: TREND Trading

A trend trader takes a position COSCO

in an up trend and stays
positioned until the trend
changes.
• Opportunities to buy come
into retracements to major Sell
support (Up Trendlines or
Moving Averages)
• When such major support Buy into Support
areas break… you sell! Rebounds & Hold

13
Are you patient enough?

BLOOM

Markets trend actively 20%

of the time, they spend the
other 80% grinding within
ranges, pullbacks, &
corrections!

14
Trading Styles: SWING Trading
A swing trader takes a position ICT
into fresh breakouts & upon
retracements to support in an Breakout
Up trend; can also Range Trade
Sideways trends
Breakout

Buy into:
1. Breakouts – prices push
over a winding Reactions to
consolidation or Area Support
Pattern
2. Pullbacks – a brief reaction
back to support after a
push
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Trading Styles: SWING Trading
A swing trader takes some ICT Resistance
profits into swing highs

Target
Sell some into Swing highs:
1. Technical targets
2. Major Resistance zones
3. Overbought levels (with RSI
> 70-80%)
4. Use technical indicators to
refine your view (MACD,
Slow Stochastics, DMI-ADX, Overbought
Volume)

16
TREND & SWING Trading Samples
BPI GLO Breakout

Possible
Sell
Stop

Buy into
Support
Rebounds
& Hold

Overbought

17
Can Trading Small Caps Advance My Portfolio?
Average absolute returns based on capitalization
(Four Up Trend Series Swings from 2009 to 2016)
16.00%

14.00%

12.00%

10.00%

8.00%

6.00%

4.00%

2.00%

0.00%
Large Cap Mid Cap Small Cap
Average St. Deviation PSEi
Source: Bloomberg, COL Premium
Notes: The returns utilized logarithmic returns. Std. Dev is the standard deviation of the absolute returns in the four events.
Can Trading COL’s EIP Stocks Add Value?
Average absolute returns of COL’s EIP Stocks
14.00%
(Four Up Trend Series Swings from 2009 to 2016)

12.00%

10.00%

8.00%

6.00%

4.00%

2.00%

0.00%
EIP Stock Non-EIP
Average Return St. Dev PSEi
Source: Bloomberg, COL Premium
Notes: The returns utilized logarithmic returns. Std. Dev is the standard deviation of the absolute returns in the four events.
Which Corrections Should I Focus On?
RETRACEMENTS RESETS: REVERSALS:
(A pullback in prices towards (A wider correction that swings (An even wider correction or
: term moving averages -
shorter back to larger moving averages down trend that falls below
50 to 100-day EMA) 200 to 400 day EMA) larger moving averages)

Stock rebounds fast; may swing Rallies moderately but stops on Takes time to reverse as many
back to an up trend quickly occasion into its recovery resistance zones lie above it
Trends take Time to Turn:

URC

Are you paddling against

the river? Down
Don’t you know the river Sideways

always wins! Up Up?

Sideways

21
Resets and Reversals: Valuable Lessons
SECB JFC

50-Day

200-Day

400-Day
200-Day
50-Day

400-Day

22
Review of our Trading Guidelines
Low Side or High Side?
1) Check you emotions
2) Choose your trend style High (profit take)

3) In Trend trading buy Low (buy backs)

reactions to support and
hold
4) In Swing trading, assess High
your trend ranges and
watch for breakouts and Low
support recalls; take
profits into swing highs
5) Remember, resets &
reversals take time
High

Low 23
Accepting & Managing Risk:
Risk Taking and Control
“Nothing in Life is
worthwhile unless
• The willingness to take a risky
action to achieve a desired
you take risks. Fall
effect
Forward. Every
failed experiment is
one step closer to • Price Stops
success ”
• Position Sizing
Denzel Washington
• Stock Allocations

24
Price Stops:
• A price stop is a tool used MWIDE
to sell off a position if that
price is violated; it is
usually placed at a key
area of support
• Price stops may be Support
adjusted as prices move Stop

upwards away from the

first placed stop – trailing
one’s stop

25
Position Sizing:
• Keep losses at a minimum Starting % Acceptable # Trade losses
Capital Loss Loss before 0
• Losing 2% of your capital ₱1,000,000 1% ₱10,000 100
on a failed trade will 2% ₱20,000 50
nullify you in 50 trades 3% ₱30,000 33
4% ₱40,000 25
• Your positon size is 5% ₱50,000 20
controlled by your 6% ₱60,000 17
accepted loss value 7% ₱70,000 14

• An acceptable loss of
Price Stop Possible Loss
P20k should only buy ₱10.00 ₱9.50 ₱0.50
40,000 shares of a would
be loss of P0.50/share Acceptable % Loss Acceptable Loss Shares to buy
2.0% 20,000 40,000
₱400,000

26
Stock Allocations:
Diversification: Adding up:
• Do not put all your eggs in one • Add up only to a winning
basket position
• Try to run a trade portfolio of 3 to • Do not add to a losing one
5 stocks (33% to 20% each in • Scale Up using the Up Right
value allocation) Pyramid method
• Do not overdiversify… you don’t
need a bazooka to hit one target
Smallest

Smaller than
the 1st

1st is the Biggest

27
Gauging the markets mood:
Mental Preparedness
“There's no harm in • Understand your battlefield
hoping for the best as before entering the fray
long as you're prepared • Review your global
for the worst” surroundings then localize
Stephen King your view
• Trading can be hard enough
without having to be surprised
by your unfamiliarity of
external /internal events

28
How is the US, Europe & Asia doing?

29
How are Currencies & Commods Doing?

30
How is The Philippines doing?
(S) 7,400 /7,285
PSEi (R ) 7,720 /8,118 PESO

200-Day

400-Day
50-Day
200-Day (S) 49.23 /49.00
400-Day 50-Day
(R ) 50.13 /50.40

31
Were still in a wide sideways shift:

PSEi - Elliot Wave B EPHE

A C

32
Stock Review
AYALA LAND INC (35.60)
ALI (S1) 34.80 (S2) 33.05
(R1) 36-36.50 (R2) 38-38.25

• Range bound – but in rally

mode
• A range trade buy may be
attempted looking at an
upside target of 38 to 38.25
• Signals are imperfect but
some improvement is seen
• Support stop at 34.80 then
33.05

33
Stock Review
MEGAWORLD PROP. (4.10)
MEG (S1) 3.91-3.88 (S2) 3.74-3.68
(R1) 4.12-4.35 (R2) 4.62

• Attempting to break
resistance (4.12-4.19)
• A pushover this would herald
a swing to next resistance
• MACD still good to go
• Support stop at 3.91

34
Stock Review
PLDT INC. (1,698)
TEL (S1) 1,636 (S2) 1,600
(R1) 1,800 (R2) 1,869

• PLDT has reacted back to its

trendline and has so far
found support
• This shelf at 1,636 should try
to hold (Stop) but may effect
a new pattern low
• Its MACD suggests a
corrective period – not
surprising since its quick run
• Resistance at 1,800

35
Stock Review
DOUBLE DRAGON (52.25)
DD (S1) 52.00 (S2) 50.20-48.82
(R1) 56-56.50 (R2) 59.00

• DD has just broken its 50-day

EMA (53.36)
• And may suggest some
lightening given its large
toppish rounding pattern
• MACD and RSI show
weakness trend force
• A retreat to next support is
possible

36
Stock Review
METRO PACIFIC (6.51)
MPI (S1) 6.33 (S2) 6.00
(R1) 6.56 (R2) 6.80-6.84

• MPI is now rallying within a

wide horizontal pattern
• A wide range of 6.84-6.00 is
shown in this pattern
• Prices now are little over
mid-way to the upper band
• A range trade – Hold may be
recommended with a range
trade –sell located near
resistance

37
Stock Review
CEMEX (7.91)
CHP (S1) 7.72-7.50 (S2) 6.70
(R1) 8.44-8.60 (R2) 9.16

• CHP is trying a reversal

swing; but may be lacking a
basing pattern (support
retest or higher-low)
• MACD shows only a bearish
rally so far
• Resistance stands closer to
8.44-8.60 which it did near
• A sell on strength will remain
until a clear reversal pattern
is confirmed
38
Stock Review
FIRST GEN (22.00)
FGEN (S1) 20.89-20.85 (S2) 19.50
(R1) 22.32 (R2) 23.00

• FGEN shook itself down to

the bottom of its large
sideways pattern then rallied
• A trading band between
23.00 and 20.89 is seen
• A range trade is carried on
• Only a break over 23.00 can
turn it into a stronger buy

39
Stock Review
D&L INDUSTRIES (22.00)
DNL (S1) 12.50-12.40 (S2)12.20/ 11.70
(R1) 13.16 (R2) 13.64

• DNL seems to be losing some

strength (poor MACD) and may
be being distributed
• But as long as it can hang on
over its range low of 12.50-
12.40 a Hold can remain
• A break of this shelf may
prompt for a skid towards next
support

40
Stock Review
METROBANK (83.50)
MBT (S1) 81.50-80.97 (S2) 75.00
(R1) 87.30-88.00 (R2) 91.40

• MBT rallied after nearing its

recent breakout point (80.85)
• But its MACD is now in
correction mode and may keep
rallies limited for now
• A new wind up pattern may be
needed after its reacted from
its channel range highs
• Support stop at 80.97

41
Stock Review
SM PRIME HOLDINGS (29.28)
SMPH (S1) 29.30 (S2) 28.50-28
(R1) 30.25 (R2) 31.50-31.77

• SMPH broke off from its long

reactive channel but is still
encountering some resistance
• A push over 30.25 is needed to
sponsor more upside action
• MACD has weakened a little
but a resistance break can still
save the day
• Support stop at 28.50-28

42
Stock Review
MERALCO (281)
MER (S1) 271 (S2) 257
(R1) 284.60 (R2) 290-297

• MER may be crafting a wide

pattern between 271 - 297
• It is experiencing some mid-
zone resistance at 284.60
• It needs to break this to swing
back to 290 to 297
• A range trade is maintained
• Support stop at 271

43
Stock Review
HARBOR STAR (3.23)
TUGS (S1) 3.10-2.88 (S2) 2.59
(R1) 3.30-3.45 (R2) 4.13

• TUGS has shifted into

corrective channel and
volumes have dried
• Either it makes a move now or
it may succumb to more
reactive sway
• It needs to hold over 3.10; if
not, it will intensify its reaction
• Support stop at 3.10 then 2.88

44
Stock Review
ALLIANCE GLOBAL (14.70)
AGI (S1) 14.00 (S2) 13.25
(R1) 15.00 (R2) 15.66

• AGI stormed up higher after

breaking out of 2 patterns
• MACD still shows strong
following – could extend a little
but more (15.00)
• It has however hit overbought
levels and may soon need to
pause or correct
• Next support is at 14 then
13.25

45
Stock Review
SM INVESTMENTS (711)
SM (S1) 705 (S2) 688
(R1) 747-755 (R2) 779

• SM is moving to correct its

earlier flight after reaching its
range target (750)
• MACD shows the same
reactive call
• It may need to windup or even
correct further – take some
profits on 2nd rallies to
resistance
• Support stop at 705

46
Stock Review
JOLLIBEE FOODS (208)
JFC (S1) 201 (S2) 192-182
(R1) 210-212 (R2) 214.56-219.80

• JFC broke out of its reactive

trend and now moves to tackle
its next resistance (210-212)
• MACD is showing some slow
down and may drive a price
envelope between 201-212
• A push over this may then work
on testing 214.56-219.80
• Support stop at 201

47
Stock Review
UNIVERSAL ROBINA (170)
URC (S1) 167.70-166 (S2) 163
(R1) 174.50 (R2) 180-186

• URC broke out of its rounding

bottom after staging a higher-
low base
• It is now making another
preparatory pattern and would
do well if it can break 174.50
• For now it may have to
complete its winding
• Support stop at 166-165

48
Stock Review
BLOOMBERY (8.71)
BLOOM (S1) 8.05-7.78 (S2) 7.19-7.01
(R1) 8.75-9.35 (R2) 10.30

• BLOOM broke out of its

consolidation range and nears
next resistance (8.75)
• Some slow down in MACD may
inhibit strong drives and drive
more choppy action
• Its wide spread to its 50-day
may also cause some drag
• Support stop at 8.05

49
Presented by:
Juan G. Barredo
Chief Technical Analyst
VP –Sales & Customer Support
COL Financial Group Inc.
@coltradingtoalpha

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Presented by:
Juan G. Barredo
Chief Technical Analyst
VP –Sales & Customer Support
COL Financial Group Inc.
Presented by:
Juan G. Barredo
Chief Technical Analyst
VP –Sales & Customer Support
COL Financial Group Inc.