If you think your stock portfolio has been beaten to a pulp, wait till you hear what technical analysts have to say about whether we’ve already seen the worst.
“Has the PSEi reached the bottom? Hell, no,” said Fitz Aclan, head of investment strategy of the trust department of Banco de Oro.
Fitz gave his inter-market analysis and fearless forecast at the Chart Analysis Forum Tuesday night at the PSE trading floor in Ortigas. Fitz is one of the founders of Absolute Traders, the group that organized the forum.
Three hours seemed quite a long time to digest his two-word answer to the burning question of the night. The CAF wrapped up at 11 p.m., but the crowd remained somber and thoughtful until the very end and a side comment from a young trader was all too revealing. “Cut your losses,” he said.
That probably means some traders were likely pinned down by the current market plunge. For an active investor, especially a technical analyst who prides himself with being able to see the signs early on, that’s like an obstetrician-gynecologist who misses the normal delivery date by a month.
The chart looked like someone’s going down the staircase of doom (Snorting at myself here. Don’t ask me what a head and shoulder formation means). If technical analysts are to be believed, things are still bound to get worse before they get better.
“There are still downward pressures…Oil is still trending up. When oil starts to show a reversal, that can be the trigger that we should be watching out for,” Fitz said.
Fitz, Bonner Dytoc and Danny Go who started AT along with technical wiz Arnold Diaz, encouraged traders to look at the market on a long-term perspective. They say those who want to make a quick buck are easily disheartened. The serious ones are those who stay and use the lull to sharpen the saw.
“Now is the time to educate ourselves, to practice and to look at the broader picture,” said Danny Go.
Booming stock markets attract aggressive traders and Buffett-wannabes. In 2007, when the market rose 40 percent, everyone wanted a slice of the action. Someone said the PSEi would go up to 4400 in 2008, which sparked a lot of interest in stocks. Just when the herd was coming in, the bear came lumbering out and the herd scattered.
Alcuin Papa, a member of AT, and a Philippine Daily Inquirer reporter, said Absolute Traders peaked at 80 to 100. My rough estimate was 60 in attendance Tuesday night.
If you fancy yourself as an active investor, AT said keep in mind that the bears are out and the strategy should be to stay in the sidelines and keep exposure to a minimum. If you see a buying opportunity, use money that you can afford to lose and preserve your capital so you can play another day.
And pray that the real bottom is not too far away.
July 14th, 2008 at 5:48 pm
Hopefully, everything will start to do well after the U.S. elections! =)
July 2nd, 2008 at 10:42 pm
some choose the contrarian approach, buy low sell high. some use the trend is your friend aproach, just waiting until the trend is confirmed.others use buy and hold strategy.in this fast changing environment, there is no clear line separating the investor and trader.both use similar strategies depending on their personal preferences.
July 2nd, 2008 at 6:18 am
mzkukuro, i’ve been buying GLO, TEL and EDC also for cash divs..
i’ve started taking MEG din dahil sa sobrang bugbog nito. Come on brokers! Dump MEG pa! =D
“be fearful when others are greedy, be greedy when others are fearful” — may addendum ako dito sa line na to.. “but make sure you have fresh funds coming in” hehe
July 1st, 2008 at 4:11 pm
Bought GLO for 1295, now its 1135. Honestly, I’m very much tempted to buy more.
Other stocks I’m very much tempted to buy are: ALI, BDO, and AT. But I’m still waiting for the right time to buy. I dont think it has come yet.
July 1st, 2008 at 1:14 pm
in that case, it is ideal to be an investor rather than a trader.