July 25, 2014 – Whale Spotting _ A Review to Enhance Your Entry and Exit Points

Large whales will dominate the tape.  Chart levels are useful but it takes money to prove the point.  Got that?  Money.  If you wish to create a chart as a support or resistance, you’d have to basically know how much a level has to be sold and bought in order to know if the breakout, breakdown, support or resistance is legitimate or a fictitious work of art.  Value traded is real money.  Never forget that. It takes money to draw the support and the resistance.

 

MBT – Large Whales Spotted Defending 86 all the way to 84.  

This means that the sellers will have to sell more than 10M shares to get through every 1 peso level going down.  Buyers are in control despite the drop in prices.  This is a bullish sign to start watching and positioning in by tranching.  Enter with the big whales.

 

initial support

 

mbt battle explained

 

In other words, the bears have to sell 10-20M shares to send the price downwards to 84.00.  Bargain hunters are not yet sure of their 86.00 entry so  they are “tranche” buying with their tranche amounting to 10M shares a single day.  We see that whoever wins (buyers or sellers) – these are critical numbers to see if the “fight” is for buyers or sellers.  It takes money to bet.  The sellers have to sell 10M shares or 860M pesos before proceeding lower to 85 and 84.  As the price falls, we approach levels which have proven to be strong supports at 80 thus, these falling prices are not falling knives but opportunities to enter into a pullback of a longer term uptrend zone.  Use pullbacks to your advantage.

Top traded value means take note as large funds cannot fight large funds as well as the public.  Note that MBT is your strongest candidate for a good low-risk entry- buying opportunity as the evidence is simply seen via money against money. The high number of trades of 1,495 means there are enough players who are buying and selling.  This battle ain’t over so it’s a thing of beauty to watch actual support and resistance in charts happen in real time.  Nothing can replace the best place of action which is the bid/ask tape.

top traded value means take note

mbt uptrend intact

 

Watch large players in the bids.  The higher the value traded, the higher the stakes, the more you should participate (especially as a newbie plankton)  This is where the game is.  Watch high stakes games because whoever wins dictates where the market action goes.  It is an indicator for you.  When 100M peso bets for the bulls win, your 1M peso bet is an easy winner even if you just pay 30 cents higher or 86.30.  This is where your risk gets lowered.  Note also that the buyers are not yet fully certain they are right.  It just means that it takes another 10M shares or almost P1Bil to sell the stock down by 1-2 pesos.  Note that these levels can be support or resistances.  The uptrending market however favors the bulls as the winners since 80 which is simply a 5% downside will only happen with a mild 10% probability because even selling it down to that level will take 100M shares or around 8 Bil pesos.  You’d have to have a really bearish view in the company to take it down to that level and fight the bulls.

 

watch large players in the bids watch high stakes

 

*****

Let’s take another example: SMPH

large exchange of hands

Large Exchange of Hands- 1M shares per change but this pales in comparison to MBT.  Still large but not THAT large.  Needs more time to prove that the moneyed buyer can defend current levels.  Still though, sizeable bets.  250M to be exact.

250m bets

 

Know your buyers and sellers.  Know their average costs so that when you enter, you’re near a safe entry level and with the large money entering or exiting.

know your buyers and sellers

 

Know the sellers if weak (meaning they’d re-enter upon a sizeable pullback) or strong (meaning they have ability to destroy the prices as low as possible.)  The strength of the seller is only as good as the number of shares he/she/they can sell just as the strength of the buyers is only as good as the money he/she/they can defend it with.  Money Flows dictate the game, especially in the short term.

know the sellers if weak or strong

Tight bids, small ranges are best entry points.  Limited risks.  Limited slippages and strong activity shows presence of strong money coming in at a defined point which enables traders and investors to be more confident in calculating their risk reward ratios, in this case, 15.50 – which is a round number support and 15.00 is very near which makes a tranche buy at current level (15.82 until 15.00 low risk buy entries with reward standpoints at 17 initially.)  Practice until this becomes second nature.

tight bids but high value traded action is important

 

*****

One last thing to note, yes MEG has presence of strong whale action.  MEG 4.38 acts like a magnet for strong buying and selling zone.  While the sellers dominate the short term, the buyers are willing to pay 100M pesos to defend.  While this is sizeable, it needs more buyers (around 10-50M more shares to dominate the tape.)  When value traded hits more than 500M pesos, you can see where the high stakes game is played and play on that table.

 

meg 438 magnetKeen eyes.

Note calculated large buyers.  You have professionals buying and waiting until the prices fall near a level they’re comfortable with to start nibbling.  You may be nibbling only 7,500 shares.  Don’t worry.  7.5M shares is along your side. Observe how large players trade.  Even just by observing you can learn more than any textbook can teach you. It is imperative to watch the ripples made by the large players.

important to watch large players

More importantly 7.5M shares or a large amount of trades happened only in the afternoon with 7M shares placed 5 minutes before the market closed. Keen eyes.  Important observations.   Support levels to be retested for MEG is at 4.30 but if this gives way, 4.00 is a strong psychological support but every 10 cents will be met by another 10M shares.  The selling pressure should be approximately 50M shares everyday to send the stock tanking down to 4.00, watch the bid/ask.  Thanks. 😀

calculated large buyer

*****

Let’s add the Macquarie conviction buyer in Philex shall we?

We have a forceful buyer and new hands who will defend Philex Mining at 12.00 In other words, we have a higher low, a higher support and while we cannot expect it to fly high, we know that bulls dominate the tape.  It is important to note that the wall of sellers at 12.00 got eaten.    Naturally the buyers will have had to eat all the shares sold at 12-12.40 which means the buyers’ average prices will be between 12-12.40.  A bullish flag is expected on Philex, where a technical resistance will reside at P14.00 unless there’s more shares that will be sold, frustrated at the waiting time of a bullish consolidation or flag which may take months and months before proceeding higher.

Philex Strong Conviction of Buyers is evident in the tape and the charts.   While it is worrisome that gold prices are sinking (currently $1290-$1295), we do have a strong buyer betting P300M pesos in Macquarie.

philex strong conviction of buyers

notice that large buyers will have to have higher average prices

12 new hands as new support

 

But note as well, sometimes conviction can turn out to be resistance.  If it stalls … Macquarie can be left holding a P300M peso bag of Philex shares which will be stuck in consolidation.  He/She/They are the strong buyers and everyone else simply follows the ring leader.

– Faceless Trader 😀

 

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2 Responses to July 25, 2014 – Whale Spotting _ A Review to Enhance Your Entry and Exit Points

  1. PLANKTON says:

    Thanks Ms. Nikki 🙂

    Like

  2. RP says:

    Hi Miss Nikki!

    What is your opinion on these new offering from BPI Asset Management? Seems to be the first here in the Philippines. Thanks! 🙂

    https://www.bpiassetmanagement.com/upload/files/FAQ%20for%20BPI%20US-European%20Equity%20Index%20Feeder%20Funds.pdf

    Like

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