Ayala Corporation Trend-Following Update

PRICES ADVANCED MODERATELY from open to close and buyers were aggressive in today's trading of Ayala Corporation stock. The close of 297.50 pesos is greater than the open that also equals the low of 292.50 pesos.

Buyers controlled the price action from the first trade and bid prices higher. Sellers, however, forced prices down from the high of 300 pesos by the end of the session. Consequently, today and yesterday's high and low are identical, which effectively prevented a gap down. In addition, the stock's high/low range of 5 pesos is somewhat narrow.



But check this out. Compared to the volume of 899,562 recorded in May 29, we now see a high volume decline that still means a bearish confirmation. Current volume traded was placed at 103,650 shares. The last time that we had a lower volume was 7 weeks ago on April 23, 2009 with 69,650 shares.

Outlook for June 11, 2009
To be honest, trend-following on a daily basis is not easy. In other words, it is quite hard. Admittedly. Even harder is to make an assessment and a forecast of what may happen in next day's trading. Marginal Stock Trader just tried this one week of trend-following exercise and learned a lot. The hard way.

Now, what is in store for tomorrow? Coming from a greenhorn in candlestick charting, we reckon that the pattern at hand is a bearish harami with respect to our existing uptrend. According to interpretation available from experts, we may expect sustained increase in selling pressure for this week's remaining trading days.

But here is the catch. If we would consider the last couple of days for our short-term forecast, then what we have instead is an existing downtrend to reverse. Thus, our pattern could also be interpreted as a potential bullish harami. This signals that significant selling pressure remains and could indicate capitulation followed by sudden increase in buying pressure and potential reversal in the next 1 or 2 days.

Data Source: Philippine Stock Exchange through online broker BPI Trade




Marginal Stock Trader would to like to share with you a comment we received through an email:

From: Jun
Date: Tue, Jun 9, 2009 at 12:19 AM
Subject: Online Stock Trading
To: microbusinessman@gmail.com


Hello Sir. I'm Jun. I work as an engineer at the Laguna Technopark.
Recently, I got interested in investing in the stock market. Actually po nag-apply nko
for an account at BPITrade waiting for approval nalang. Once, I was browsing the
web for tips regarding day trading, I happen to pass by your Marginal Stock Trader blog.

I will constantly check your blog for new post from now on, and read all your previous posts,
I find it very helpful.

I'm initially investing maybe 20k and try my luck at day trading, hopefully with the help
of your blog and dozens of others, I can also learn and earn from the stock market.

Sincerely,
Jun

Thanks Jun for the email. Your comments are much appreciated.


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