SMPH (SM PRIME HOLDINGS, INC ) – DECEMBER 6, 2019 TRADING GUIDANCE FOR NEWBIES WHO NEED HAND-HOLDING WHILE LEARNING TO TRADE INDEPENDENTLY
SMPH (SM PRIME HOLDINGS, INC ) – DECEMBER 6, 2019
TRADING GUIDANCE FOR NEWBIES WHO NEED HAND-HOLDING WHILE LEARNING TO TRADE INDEPENDENTLY
As usual before preparing our Trading Plan let us first establish our Trade Setup. SMPH appears to be breaking out from an Inverted Head and Shoulders Pattern giving us a very good trade setup.
To establish our Target Price using the Inverted Head and Shoulders Pattern all we have to do is to use the price distance from the Head of the Pattern to the Neckline and project the same from the breakout point of the neckline. This also helps us in determining our Critical Action Zones.
We now proceed to our Procedures.
STOCK CHARTS AND ANALYSIS – TRT PROCEDURES
FIVE QUESTIONS
The first part of our Stock Charts and Analysis is to answer Five Questions about the stock:
- What is the present trend and how strong is the trend?
The stock is in an Uptrend and breaking and at the point of reaching its 52-week High. The ADX is 24.15 with the +DI pointing up.
The stock is also in its most Bullish Orientation with the price above all the Moving Averages.
- Based on our Trading Strategy Map, at what Phase is the Stock in?
The stock is still on Stage 1 moving on to Stage 2.
- Is there any Chart Pattern that will serve as guide for establishing our Critical Action Zones?
The Stock appears to be breaking out from an Inverted Head and Shoulders Pattern giving us a very good way of projecting our Price Targets
- Does the Trade Setup offer sufficient Risk/Reward ratio?
Yes. The set up offers a Risk/Reward ratio of 1:3.50
- Do we see any Trading Signal?
Yes. There is a golden Cross of the 15 EMA and 20 SMA giving Buy Signal and price action is above all the Moving Averages.
We now present our findings and observations.
POSITIVE:
- Buy signal as evidenced by the Golden Cross of the 15 EMA and 20 SMA.
- The stock is in its most Bullish orientation with price action above the 15 EMA, 20 SMA, 50 SMA and 200 SMA. This indicates that the stock is Bullish Short-term, Medium-term and Long-term.
- The Stock appears to be breaking out from an Inverted Head and Shoulders Pattern giving good price targets.
- Buy Volume of 70% indicates stock continued to be on Accumulation.
NEGATIVE
- NONE
TRADING PLAN
Based on this analysis, following is our Trading Plan
Target Price: P45.00
Buy Price: P41.00
Stop Loss: P39.75
Risk: (P41.00 – P39.75) = P1.25
Reward: (P45.00 – P41.00) = P4.00
Risk/Reward Ratio: (P4.00/P1.25) = 3.20 so 1:3.20
Trading Capital: P1,000,000.00
VAR: 1% of P1,000,000.00 or P10,000.00
Position Size adjusted for Board Lot: 8,000 shares
Total Amount Committed: (8,000 shares x P41.00) = P328,000.00
Trading Capital used is P1,000,000.00. This is scalable up if you have more or down even if you have only P100,000 or less.
Good luck on all your trades.
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Good luck on all your TRADES today.
DISCLAIMER There is a very high degree of risk involved in TRADING. Past results are not indicative of future returns. Nothing contained in this newsletter constitutes a solicitation, recommendation, PROMOTION or endorsement of any security. In accordance with the Responsible TRADER’s Creed: I will never tell and you take full responsibility for all your TRADING results
NOTES: Please take note of the following changes. Effective August 6, 2015: 1. Caption Market Breadth has been changed to Total Traded Value to simplify the presentation. 2. Market Breadth is expressed in terms of Number of Advances and Declines. Expressing this as a Ratio by using the larger number as Numerator we derive the Market Sentiment whether Bullish or Bearish. 3. Based on Past three-year data of Average Total Traded Values, following classifications will be used to make the presentation more relevant to present times. a. Low – Total Traded Value less than PhP 8 Billion b. Medium – Total Traded Value Php 8 Billion but not more than P15 Billion c. High – Total Traded Value more than Php 15 Billion.
Starting with August 11, 2017 data we are including the Top Ten Gainers and Losers for a more comprehensive coverage of significant stock movements during the day.