Philippine Equity Research

Feb 26, 2018

WEEK’S HIGLIGHTS
• The Philippines’ PSEi lost 144-pts for the week as prices moved to
Bullseye Report retest its support column
• Average Daily Value Turnover increased from P8.2-B the week
Weekly Overview previous to P9.3-B
Issue Prev Wk Last Wk Wk Chg Wk Chg % YTD % • Net foreign flows were negative again but tapering showing
Philippines 8,612 8,468 (144.88) (1.68) (1.06) Php2.3-B in outflows as against Php3.2-B the previous week
Peso-$ 52 51.89 (0.110) (0.21) 3.93 • The PSEi (at 8,468) corrected by 1.68% for the week after the index
MSCI Phils 37.2 36.79 (0.41) (1.10) (5.23) came close to its 32-day Moving Average (MA) resistance. It now
PLDT US 29.36 29.87 0.510 1.74 (0.70) moves to retest its support structure closer to 8,434-8,390 (130-
DJIA 25,219 25,310 90.61 0.36 2.39 day MA)… if this can hold then a wider recovery may be seen. If
SP500 2,732 2,747 15.08 0.55 2.76 not then a possible shift down closer to 8,130 may be in store. The
Nasdaq 7,239 7,337 97.92 1.35 6.29 two scenarios were illustrated in our Feb 23 Tech Spotlight. We
Germany 12,452 12,484 31.83 0.26 (3.35) clearly need the recovery to generate lift from a host of weak
Nikkei 21,720 21,893 172.53 0.79 (3.83)
stocks seen in our techguide
Hong Kong 31,115 31,267 151.74 0.49 4.51 • US markets as well as with markets from Europe and parts of Asia
China 3,199 3,289 89.86 2.81 (0.55) did work in rallies as well. Although US Bond Yields drew up some
US 30yr Bond 143.22 143.06 (0.16) (0.11) (5.84) threats in the early part of the week, we did notice some
10-Yr Yield 2.877 2.871 (0.006) (0.21) 19.38 momentum flaws that argued for its likelihood to correct. If it
breaks below the 16-day MA (2.857%) it may allow for more
Dollar Indx 89.01 89.81 0.80 0.90 (2.20)
reaction time and may allow markets to proceed to rally as a
Gold 1,356.20 1,330.30 (25.90) (1.91) 1.60
response. This may weaken the Dollar and may allow commodities
Oil 61.55 63.55 2.00 3.25 5.18
to remain prospective (some are consolidating as of the moment)
CRB Index 193.58 195.99 2.41 1.24 1.10
Focus Items
Authored by:
Highlight Page
Juanis G. Barredo
Philippines : Weekly Stats 2
VP; Chief Technical Analyst
COL Financial Group Inc. Philippines : PSEi & Peso 3
(632) 636-5411 Tech Map: Some key stocks and trend calls 4
Juanis.barredo@colfinancial.com US and Europe: In review 5
Disclaimer: All opinions and estimates constitute the judgment of COL’s Equity Research Dept as of Asia: In review 6
the date of the report and are subject to change without notice. The report is for informational
purposes only and is not intended as an offer or solicitation for purchase or sale of a security. Currencies & Commodities: In review 7
 Bullseye --- Page 2

Philippines: Weekly Stats**

2018 Net Foreign Flows of –P10.03-B

*Source: PSE
PER (Price/Earnings Ratio) data uses four-quarter trailing financial data
 Bullseye --- Page 3

Philippines: PSEi & Peso-$

Recommendation: Range trade &watch support
Support: 8,434 – 8,390/8,130 Resistance: 9,078 - 9,130
• The PSEi was down 144-pts (-1.68%) for the week after
prices moves to retest its recent lows
• Prices have pulled back from its rally and close to our
estimated support fronts – estimated between 8,434-8,390
then 8,130
• If support into this dip can hold then a possible wider
recovery may be seen - one which can open a range trade
as prices may rally then consolidate
• Place stops at 8,390

Recommendation: Range trade the channel

Support: 51.50-50.80 Resistance: 52.25 – 52.50
• The Peso-$ (at 51.89) is still into a weakening trend but may
have hit high band of its new channel
• A possible channel may control price swings and if so could
see resistance closer 52.25-52.50
• Although weekly MACD still sees weakness for the P-$ its
daily version maybe showing some momentum loss allowing
for some correction time
• Look to range trade its support and resistance or its
apparent channel
 Bullseye --- Page 4

Some Key Stocks and Trend Calls

Tech Map Legend: (Note: Trends are cast in the short term)

Up trends:
HVN ANI AC SBS 2GO ABS These issues show continuing if not strong up trends. Look for trading
MRC BLOOM AEV SCC APC AGI buys now if risk-reward measures are appealing or if not, buy into
BPI ALI SECB AR AP slight dips.
HOUSE ANS^ SGI BEL CHIB
ION AT^ SLI BHI CHP Up trends needy of reactions or are reacting:
NOW AUB SM* CLI CLC
PIZZA BDO SMPH* COAL CPG
These issues show continuing up trends but are showing some
SSP CEB TECH COSCO DD reactive adjustments due to profit taking. Look for pullbacks to short
PXP CIC TEL DIZ DMC term support or a rally from such support to cast fresh buy trades.
SMC CNPF VLL DMPL EAGLE
TUGS CROWN WPI* EDC ELI Consolidations (Sideward trends):
UBP DAVIN EEI EW These issues are running through consolidation phases. Either wait
WLCON DNL* EMP FGEN for key range breaks or range trade and buy into a support bounce.
FPH FDC FNI
GLO* FLI FOOD Keep watch of possible range break bias in the following direction
GTCAP GERI HLCM [~-up/down, ^-up, *-down).
ICT IS LC
IMI MA LPZ Down trends needy of rallies or are rallying:
JFC MRP MARC These issues show continuing down trends but are undergoing a
JGS* MPI MAXS temporary/oversold rally. Lighten or sell into rebounds to resistance
LR MRSGI MEG for now.
LTG^ NI MWC
MBT* ORE NIKL Down trends:
MER* PHA PCOR
MWIDE^ PHEN PGOLD
These issues show continuing down trends. Stay out for now until
OV PLC PX better demand patterns appear.
PIP ROCK RCB
PNB* SSI RLC
PPG STI RWM Stock Code Color Guide:
PNX VITA SHLPH
PSE WEB UNI
GREEN -These issues improved their technical condition for the week
RFM URC (moving to the left of their column category on the Tech Map)
RRHI X RED -These issues deteriorated on their technical condition for the week
Total Issues (change from last report) (moving to the right of their column category on the Tech Map)
2 (-2) 13 (-1) 44 (+1) 31 (+14) 33 (-12) BLACK -These issues carried the same technical condition for the week
(standing on the same column category on the Tech Map)
 Bullseye --- Page 5

US and European Markets

* Simple Moving Averages: 20-Period 50-Period
US indices proceed to rebound:
• US markets did manage to score up rebounds
from dreadful slides 2-weeks previous which hit
oversold levels. Both the Dow and Sp500
bounced back to their 16 to 32-day MA while
the NASDAQ was stronger clearing these
resistance points. As we suggested this rebound
may allow for some range trading in the
meantime as prices may move to consolidate
after its rally to next resistance levels
• Short term Support and Resistance estimates
for US indices are shown below:
Dow: 24,792-23,803 – (R) 25,468-26,014
SP500: 2,697-2,615 – (R) 2,753-2,812
Nasdaq: 7,070-6,800 – (R) 7,362-7,505
Europe also continues with its rebounds:
• Euro-zone indices were also higher after seeing
the rebound action from the US. The rally in
Europe was also triggered by some weakness
into the Euro after the US Dollar index managed
to recoup. Europe will also swing into a
consolidation after the rally hits a meaningful
area of resistance
 Bullseye --- Page 6

Asian Markets
* Simple Moving Averages: 20-Period 50-Period
Asia proceeded to recover as well:
• Asian markets took advantage of the US rebound
and framed its own recovery swings last week save
for the Philippines that is. China and Singapore led
the recovery after China opened strongly after the
lunar holidays. Rallies may try to move towards
next major resistance spots then will have to
decide there – though we expect some
consolidation time thereafter.
Asian Indices (for the week) YTD RSI
China 2.81% -0.55% 43.73%
Singapore 2.61% 3.83% 57.65%
Malaysia 1.50% 2.46% 60.28%
S Korea 1.23% -0.65% 48.33%
Indonesia 0.79% 5.04% 59.05%
Japan 0.79% -3.83% 42.78%
Hong Kong 0.49% 4.51% 51.56%
India 0.39% 0.25% 44.74%
Thailand 0.12% 3.10% 53.68%
Philippines -1.68% -1.06% 39.95%
Malaysia ($MYDOW) & Indonesia ($IDDOW) represented by their ETFs
• The PSEi (8,467 -1.68% WoW) was lower by 144-
pts pushing back down close to support after
staging an intraweek rally to 8,757. This area of
support between 8,434-8,390 must hold prices so
as to provide for another drive of lift. This next
rebound (if support holds) may be a little wider.
Failure of this support may lead into a reach
towards 8,130.
 Bullseye --- Page 7

Currencies & Commodities * Simple Moving Averages: 20-Period 50-Period

US Bond Yields shake markets, boosts Dollar:
• The US Dollar index (89.81 +0.89% WoW) rose
for the week but did reach into resistance as
shown by its down trendline. This resistance
test is important and if broken can lead into
more rally action into the short term (Sup 88.25-
88.15/Res 90.45-91.66)
• The US 10-Yr Bond Yield [$tnx] (2.871% -0.21%
WoW) was lower for the week as weakening
momentum seem to be asking for some
correction time. Also hitting daily and weekly
overbought levels may soon cause some pause
or reaction time. Major resistance is at 3.0%-
3.03%. (Sup 2.857-2.739/Res 2.943-3.00)
• The Euro (122.95 -0.89% WoW) reacted and
moved test its consolidation range lows. Its is
now closer to support (Sup 122.06-120.50 / Res
125.22-125.37)
• Gold ($1,330.30 -1.91% WoW) slid back after
reaching a previous high. It now consolidates as
it watches the US dollar (Sup 1,304-1,276 /Res
1,365-1,377)
• Copper ($3.21-1.11% WoW) dipped a little but
still stands close to its range highs, preparing for
a possible breakout (Sup 3.16 /Res 3.27-3.32)
• Oil ($63.55 +3.25% WoW) rebounded well and
may try to rework itself closer to next resistance
and its previous high of $66.6 (Sup 58.00-
55.59/Res 63.67-66.66)