Can WLCON Hit the 38.2% Fibo Ext Near 11.82 or Retrace Near the 9.66-9.40 Range?

0
588

WLCON is the most requested stock when I ran a survey on the Facebook Group of Stock Signals Philippines. Although I only divulge the meat of my analysis on our Private Clients Forum, I’ll let you get a synopsis of my analysis of WLCON.

Wilcon Depot, Inc., (WLCON) registered its new all-time high last February 9, 2018 at 10.80. The obvious question is whether its ascent is sustainable or not and up to what price.

When a stock registers an all-time high, I use either my Price Forecaster or Fibonacci.

My Price Forecaster tool tracks volatility. When I developed it, I considered the ability to input customizable holding and smoothing periods.

What I want to show you today is WLCON’s chart using Fibonacci.

WLCON - Chart - 2.9.2018

The 38.2% Up Fibonacci extension sits near 12.50 while the 38.2% retracement is positioned near 9.66. Now, what is that 9.40 I mentioned in the title? That’s the position of the 50% Fibonacci retracement. In other words, I’ve cited the 38.2% and 50% retracements as the range for the support area.

The deeper support level at 9.10 is in confluence with the 61.8% Fibonacci retracement.

As far as the simple moving averages are concerned, I see that WLCON is moving in a confirmed bullish pattern both on the short- to long-term basis. Although not appearing on the chart, RSI and Stochastic say that WLCON is overbought.

But take this. When the ascent of the price is supported by volume and net foreign buying, you cannot afford to be blinded by the classical interpretation of the positions of RSI and Stochastic.

See the volume chart below. Are you familiar with the correlation between price and volume? Here’s how I take it.

The ascent is more likely to continue if the price is bullish and the price is above its 30-day volume average.

The ascent is less likely to continue if the price is bullish but the price is less than the 30-day volume average by 50 percent.

You follow that pattern when the price is moving on a downward level.

Digest what I’ve mentioned above and what you see on the volume chart below.

WLCON - Volume - Dec 28-Feb 9 2018

If you have access to our Automated Stock Ranking System, you will see that foreign investors have never stopped registering a daily Net Foreign Buying stance since December 22, 2017.

On a 30-day trading period, WLCON is on a Net Foreign Buying worth PHP798,032,119.00.

WLCON - Foreign Fund Flow - Dec 28-Feb 9 2018

Now I’ll start showing you the top 10 players’ sentiment on WLCON based on multiple time frame. I am also the developer of this proprietary Top 10 Players chart-generator.

This Top 10 Players calculator helps me see the buying and selling confidence of ALL brokers who traded the stock within my chosen time frame. It also shows me the buying and selling averages of the participants within my chosen time frame.

I do not need to guess who the confident buyers and sellers are. I do not need to lose my sanity in calculating the buying and selling averages of all trading participants within my chosen time frame.

When you have access to my charts and these pieces of information I’ve shared with you, your conviction will no longer be based on pure emotional angst but data. In short, you become data-driven. You can tame your emotions when you are data-driven.

I am not going to interpret the charts below because I did my best to make sure the text-based interpretation below each chart is self-explanatory. Compare my findings with the other Top 10 Players charts on different time frames. I’m sure your rationality can take care of you.

WLCON - Top 10 Players - Dec 13-Feb 9 2018

Participants with a 100% Buying and Selling Activity from Dec-13-2017 to Feb-09-2018 at 03:30PM:

  • 2 out of 112 participants or 1.79% of all participants registered a 100% BUYING activity
  • 17 out of 112 participants or 15.18% of all participants registered a 100% SELLING activity
  • Top 10 Players’ Buying Average: 9.1345
  • Top 10 Players’ Selling Average: 9.1988

WLCON - Top 10 Players - Feb 1-9 2018

Participants with a 100% Buying and Selling Activity from Feb-01-2018 to Feb-09-2018 at 03:30PM:

  • 3 out of 94 participants or 3.19% of all participants registered a 100% BUYING activity
  • 36 out of 94 participants or 38.30% of all participants registered a 100% SELLING activity
  • Top 10 Players’ Buying Average: 10.0511
  • Top 10 Players’ Selling Average: 10.0404

WLCON - Top 10 Players - Feb 5-9 2018

Participants with a 100% Buying and Selling Activity from Feb-05-2018 to Feb-09-2018 at 03:30PM:

  • 2 out of 92 participants or 2.17% of all participants registered a 100% BUYING activity
  • 39 out of 92 participants or 42.39% of all participants registered a 100% SELLING activity
  • Top 10 Players’ Buying Average: 10.1901
  • Top 10 Players’ Selling Average: 10.1706

WLCON - Top 10 Players - Feb 9 2018

Participants with a 100% Buying and Selling Activity as of Feb-09-2018 at 03:30PM:

  • 2 out of 57 participants or 3.51% of all participants registered a 100% BUYING activity
  • 28 out of 57 participants or 49.12% of all participants registered a 100% SELLING activity
  • Top 10 Players’ Buying Average: 10.5542
  • Top 10 Players’ Selling Average: 10.5189

Below is my Risk Level chart. Through volatility and a little bit of arithmetic using standard deviations, this calculator can tell me the risk level of each stock listed on PSE. Higher risk score means more erratic price fluctuations in the past relative to the stock’s previous price movement on a daily basis.

This tool is useful for advanced traders, especially for beginners. Beginners should only test the water with low-risk stocks. WLCON is within the moderate risk level.

WLCON - Risk Level - Dec 28-Feb 9 2018

My Advice

As far as my overall assessment is concerned, I am bullish on WLCON. My trailing stop loss will take care of me.

I’m sure you’re itching to ask, “Sir, is it okay to buy WLCON today?”

If you’ve been following me for a while already, you know that I do not spoonfeed decisions to people. I feel that spoonfeeding investment decisions to someone disrespects their ability to rationalize and decide with what they would want to do with their money.

As an analyst, my job is to show you what I know and let you see what I see. Now that you know what I know about WLCON as far as the data I’ve used is concerned, I believe you are equipped to make an intelligent data-driven decision based on your financial goals, investment horizon, and risk tolerance.

The evergreen advice is this.

  1. Calculate your reward-to-risk ratio before you enter a new position. Calculating the RRR forces you to identify the stock’s support and resistance levels. It also motivates you to respect the loss percentage that you can afford to handle. If the projected reward is worthy of the potential risk, relative to your risk tolerance, then test the water with a trailing stop loss.
  2. Use a trailing stop loss. It protects your gains, preserves your capital, and prevents losses more than what you can only handle. Remember those 3 Ps. Read this article to learn more about why I recommend using a trailing stop loss.
  3. Buy or sell in tranches, especially if you hold a significant number of shares in a stock. Stay away from the “all-in” or “one-time, big-time” mentality. Reckless thinking habits never work. Tranche buying or selling is one way to avoid getting whipsawed or booted out too early in the game.

Did you learn something from my brief analysis? I would love to read your comments below so I know if my posts are helpful to you.

Jaycee De Guzman

Jaycee De Guzman

I have helped thousands of Filipinos trade independently and invest profitably through the Equilyst Analytics, Inc. I have also helped hundreds of SMEs and Fortune 500 companies build and boost their online presence through iPresence Digital Marketing, Inc. Read my About Me page.
Jaycee De Guzman

Do you have a comment?