Monthly Trending Stock Picks – November 2017

Before we proceed to another set of QDS Stock Picks for this month, let's see how our picks last month performed in the slideshow below. To view October Stock Picks, please click here.

OUR STOCK PICKS FOR THIS MONTH

SM Prime Holdings

SM Prime Holdings (SMPH) is one of the property companies that could be negatively affected by U.S. President Donald Trump’s “America First” policy which might stop the entry of new BPO companies in the Philippines.  The good thing is this has not yet happened and actually at present, there's an increasing office space leasing demand from Philippine offshore gaming operators. The revenue contribution of office space leasing to SMPH's total revenues is around 3%.

SMPH's 3rd quarter net income grew by more than 16% compared to the same period last year. Company's residential segment also grew by 21.6% this quarter due to the increase in sales of RFO (read-for-occupancy) units. The incoming Php100 billion, 600-hectare Pasay and Parañaque reclamation project is seen to be value-accretive. With these, it's easy to expect SMPH still has a potential for growth in the future.

SM Prime Holdings

SMPH daily chart. Click to enlarge.

SMPH is still in the bull market for years now and showing no signs of a reversal in the near future.  Stock price broke above 35.00, turning the resistance into support.

If looking to buy, we suggest accumulating ONLY near the support area or on a breakout.  Check the chart above for support and resistance levels.

SM Prime Holdings

Signals

The QuantDS PSE signals table above suggests that SMPH is in a strong bullish momentum.  A Breakout Buy recommendation with a high probability of 58% was also generated in the data coupled with Buy Stop alert. With these signals, we may expect the stock price to continue moving upwards. See the table below for support & resistance price levels.

SM Prime Holdings

Support/Resistance levels


 

Ayala Corporation

Last month, Ayala Corp. (AC) clarified the news report released by manilastandard.net on Oct. 1 that the group of Metro Pacific Investments Corp. (MPI) and AC offered to invest up to P20 billion to rehabilitate, operate and maintain Metro Rail Transit Line 3. AC said that MPI had earlier submitted an unsolicited proposal to take over the rehabilitation and operations and maintenance of MRT3 and the discussions are still ongoing with respect to Ayala Corporation’s participation in the project.

On the other side, the Ayala-led Globe Telecom Incorporated (GLO) 2017 3rd quarter core net income rose by 11% due to continued demand for data products, compared to the same period last year. 

Ayala Corporation

AC daily chart

For those who don't have AC in their portfolio and want to accumulate, here are the two possible scenarios:

  1. There's a descending triangle and a breakdown could happen; and
  2. A potential price build-up might form followed by a breakout above the resistance levels.

We suggest traders who want to buy AC to be a little more patient. A breakout above the resistance levels at 1.10 and 1.116 with a huge volume will give a clearer signal to buy.

Ayala Corporation

Signals

The signals table above is telling that AC is in a strong bullish momentum. The High-Risk Buy recommendation suggests it's risky for now to accumulate AC but the probability (of high risk) is below 50%. The last column, QDS Alert, shows Buy Stop which means 'buy on resistance breakout'. At this point, we suggest to focus more on the QDS Alert and accumulate only after a breakout. For multiple support & resistance levels of AC, see the image below.

Ayala Corporation

Support/Resistance levels


Meralco

According to the news by philstar.com,  'Customers of the Manila Electric Co. (Meralco) will see an increase of P0.3436 per kilowatt-hour in electricity bills this month mainly due to higher electricity spot market prices and the peso depreciation that pushed up the generation charge.' Due to the tighter supply condition, charges from Wholesale Electricity Spot Market or WESM increased by P0.4810 per kWh despite the decreased in Luzon power demand this month.

MER's commercial customers' sale grew by 3.7% and industrial sale by 3.0%. Analysts are expecting these sales to continue growing in the 2nd half of this year due to healthy domestic consumption to support PH manufacturing and strong demand for PH real estate.

Meralco

MER daily chart

MER now is on a bullish reversal from the consolidation that started December last year. Price broke above 296.80 resistance which also confirms MER's transition into a new trend. Another breakout above 300.2 and 304 levels will give a clearer buy signal for those who want to accumulate. Stop loss can be set below 280.8 support level confluence with 200-day EMA.

Meralco

Signals

The QuantDS PSE signals table above suggests that MER is in a strong bullish momentum. The High-Risk Buy recommendation suggests it's risky for now to accumulate MER but the probability (of high risk) is very low at only 40%. The last column, QDS Alert, shows Buy Stop which means 'buy on resistance breakout'. For a safer entry, we suggest buying the stocks only on resistance breakout. For resistance levels, check the table below. Support levels at red columns can be used to set stop-loss prices.

Meralco

Support/Resistance levels

Feel free to share your thoughts in the comment section below.

 

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