Feb 21, 2012- Uncovering the Accumulated Stocks

These are the stocks that big institutions are buying and this buying can take weeks or months (Thanks to SpicySiomai for helping me with the data gathering).

Below is the total Net Foreign Buys for the Year 2012:

Presenting the Stocks with High Accumulation 🙂

1.) Money flow and Accumulation are fairly important variables when we look at stocks and sectors.

2.) Strong volume increases signal that mutual funds and other big funds are actively taking positions.

Recommendation : Institutional Sponsorship is generally a good thing.  A good pullback entry with the big houses by your side is a good place to bet upon.  😀

It’s also interesting to see whether the foreign buying is consistently buying, or is sometimes buying all the stocks in just one month or not.  For instance, I particularly like the following consistency in buying:

I guess what’s more important is to see, whether the buying is done haphazardly, or in small bits every single day etc.

Example: Stealth Buying – ensued into massive strong gains

Nevertheless, from the slew of stocks you see with more than Php 1.5 Bil  worth purchased in the stocks, you cannot say it’s over until it’s over.  Hang on and sit tight 😀

Handy Tip:

1.) Go to the quotation reports released by PSE website, get the .csv files, and make the studies yourselves 😀  It’s worth it.

2.) Just because there’s a lot of foreign selling doesn’t mean the stock won’t go up.  However, it may consolidate or take some time before going up.

(Example: PGOLD is net foreign sell Php 340 Mil, although local firms seem to be able to buy the shares, that the price hasn’t sunk yet. TEL has also met some foreign selling but it is still able to go up 😀 .)

It makes me think that, when the foreigners are selling their shares in very small sizes, they could signal a pause and consolidation, but not exactly a distribution, since they were willing to buy a lot of shares previously.

Distribution charts are like these (Notice huge foreign selling, and unabated) :

– Faceless Trader

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17 Responses to Feb 21, 2012- Uncovering the Accumulated Stocks

  1. Ben says:

    Thanks for the list FT. I like OV. 🙂

    Like

  2. spicysiomai says:

    Your welcome 🙂

    as long as we can help newbies and other traders, ok lang naman magshare 🙂

    Thanks mam FT

    Like

  3. Nobody says:

    hey FT, just wanted to know what you think of PCOR at its current levels? @10.84? haha. it seems uber low right now.

    Like

    • Hello 😀
      First disclosure- I’m not in a position to say anything fundamentals related to PCOR because I didn’t study the company. So the first thing I’ll do, is if “it seems uber low right now”, is to check— whether there’s a catalyst for it to go up. Remember, stocks can remain cheap for the longest time. Even if it may seem “valuation-wise cheap”, that’s not the reason why it’s a buy. A lot of stocks can continue to be cheap for a long time. What if a long time is equal to 1 year? Can you place your money there and let it stay earning nothing for 1 year? How about the downside? Do you think that it will not fall anymore? 2nd, Check the sellers- are they major fund flows that are selling, or just profit taking? It looks to me taht these are major funds cutting losses, so as Gerald Loeb (a very great trader who lived during the depression days of 1920s would say), trading is like a battlefield. You need to survive first, before you take offense. Notice that defense is always the greatest offense. You have to focus on having the funds by your side, not against you (especially if you’re still a small retail trader.) It takes a lot of buying power to overcome the huge sellers — and in order to overcome the huge sellers, you have to have a fundamental reason— why you’ll buy. For instance, I like to comment that for Cebu Pacific— though this looks on a p/e valuation wise cheap, the problem is that the fundamentals is diverging from the technicals- the expected outlook for oil could rise, and 50% of expenses of Ceb is fuel -related. It’s all about expectations in the future— for PCOR, it’s a refiner, so when oil increases, they have to import oil at higher prices from the market place— so it’s going to be quite bad for them. Anyway, I’m not a good fundamental analyst, I think it takes a lot of years and experience and many cycles to do a good fundamental report, but I think what is clear is that— if the fundamentals, technicals and fund flows are all mixed signals– u have to stay out. For PCOR, funda, techni and fund flows are saying sell- so just stay at the sidelines. You can probably make money trading it in and out, but why go into a battle without shield and armor and a lot of cannons behind you right? Trading is like a battlefield. Have the fundamentals, technicals and fund flows by your side to win the war. You can use that thinking when you think about other stocks as well. When the funds stop selling- when the technicals stop declining, and if your fundamentals–and your analysis tells you that the stock is ready to go up, that’s when you buy (and always have a stop loss to keep your losses small). Follow those rules and you can carefully win. Trading is really like an art of war. You win the battle by knowing the enemy (who are the sellers, are they many and why are they selling etc etc.).

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      • Nobody says:

        Wow very nice reply! yeah true, at first I was taking positions in EDC and PCOR mainly because they were getting battered and I thought that it was just an overreaction (I was trying to think in a contrarian way), but yeah, I cut my losses early and good thing I did! 😀

        What do you think of the overall market sentiment today? Haha, its a bit exciting now that we’re about to go over PSEi 5k, hmm… Are we bound for a good correction?

        I can relate to what you’re saying.. “Knowing your enemy”. Been watching accumulation of big brokers of AGI, SMDC, PNB, RCB and COL?

        What do you think about these stocks, PNB and RCB already broke out, I’m wondering if they still have a good upside, but for AGI, SMDC, COL? I think they’re bound to go up soon since fundies have been accumulating them for a while–specially AGI and SMDC. For COL on the other hand, it seems that it now got the attention of fundies since COL trade volumes seems to go with the growth of PSE volume. These are just only my sentiments though, what do you think?

        Thank you in advance, you are very helpful for a newbie trader like me 🙂

        Like

      • Read my new post – Post analysis of market sell off- 😀

        Yeah. I think COL looks interesting 🙂
        Try reading the annual reports, management reports if you have time para technicals + fundamentals + fund flows 😀

        Re PNB – maganda ung technicals and flows niya recently, but I dont know the funda..alam ko lang may merger eh 70 pesos ung merger so di ko na alam.

        Re the other stocks you mentioned- sori i dont know eh.

        AGI mejo interesting nga ung setup niya para sakin–kasi nagconsolidate lang naman sa 10 60 area tapos nagpush to 11, then today sa selloff- bili pa rin ung foreigners kaya..para sakin– from a risk reward standpoint- take a look nga tong stock na to, baka may perang makuha hehe. 🙂

        Among jap stocks nga pala, gumagana ang fund flows ah. Noticed that NI being sold, pero DIZ naman being bought :)– just as what happened in the price chart itself. I dont know if its coincidence lang or what. parehas naman kasing nagpullback pero ung isa lumipad, isa hindi.
        -FT

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  4. cutter says:

    Hi FT,

    Where can I get that graphical data of NFB /NFS? Thanks

    Like

  5. rey says:

    Hi FT, thank you so much for this very informative post.

    Like

  6. Pingback: 2.21.12 OPM PHES EEI _what is P/E? EPS? (videos) « spicysiomai

  7. mark says:

    nice. really helpful 🙂

    Like

  8. Amiel says:

    FT what percentage of reserved cash do you leave in your portfolio to serve as buffer for averaging down your positions for a sudden black swan like EDC,PCOR, SMC etc. Do you recommend using margins or loans given by brokers.

    Like

    • EDC,PCOR and SMC – for these kinds of black swans- in general, I will not recommend averaging down your positions. 1 of the first things I’ll even do is to lighten down on any rally on these stocks. I myself got my own blackswan when I bought JGS and then it had a placement. I cutloss on the position. It happens, that’s why the company allocation cannot be 100% in our portfolio, or else when we get those 10-15% drops in one day, it will take us a very difficult time to recover. Sell on the rallies. Margins or loans will kills you faster if you average down on these companies because the funds will definitely selling. It’s like going into war where you have only a dagger, while the others have cannons and guns. You’ll just die in the battle. Exit and survive . 😀

      Like

  9. 100kpinoy says:

    very nice informative post,
    thanks FT 🙂

    Like

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