Can FNI and China's Baiyin Deal Spur FNI's Price All the Way to 1.80?
Jaycee De Guzman

Jaycee De Guzman

Hi! I'm Jaycee De Guzman. I have helped thousands of Filipinos trade independently and execute investment plans profitably through the Stock Signals Philippines. I have also helped thousands of international clients and businesses from 100+ countries build their online presence and boost their sales through iPresence Business Solutions. Read my About Me page.
Jaycee De Guzman

In a disclosure to the Exchange, Global Ferronickel Holdings, Inc. (FNI), the second largest nickel producer in the Philippines and the largest single lateritic mine exporter in the world, has signed a Memorandum of Cooperation with China State-owned Enterprise, Baiyin Nonferrous Group Co., Ltd., when President Rodrigo Duterte visited China.

The MoC was signed by both company’s Chairmen.

Baiyin Nonferrous Metals Company mines and produces various nonferrous metals. The Company’s products include copper, aluminum, lead, zinc, gold, and silver products. Baiyin Nonferrous Metals also operates smelting and chemical business.

FNI and Baiyin signed the MoC to promote closer industrial and commercial cooperation as both companies recognize the economic benefits of a partnership arising from the availability of low-cost nickel ore in the Philippines, for which FNI is a key supplier to major customers in China and China’s large and growing demand for nickel ore which is a key ingredient in China’s production of stainless steel, coins, rechargeable batteries, and special alloys. China is the largest consumer of nickel in the world, accounting for around 50% of world consumption.

The partnership is set to place $500-700 Million in the Philippines which includes evaluating the feasibility of constructing an integrated 200-series Stainless Steel Plant in the country with a capacity of 1 million tons using low-grade nickel ore sourced in the Philippines.

In turn, Liao Ming, Chairman of Baiyin, said Baiyin is looking forward to a long and mutually beneficial partnership with FNI.

Let’s talk about FNI’s chart, foreign fund flow, volatility, liquidity, and market’s sentiment.

Daily Chart

Do you consider a price movement above the 10-day SMA and an MACD above the signal line as a good tandem for a buy signal? If you already read my article entitled “How I Use 10SMA and MACD to Identify Buy and Sell Signals“, you must have already done a test-buy last September 23 or 24. I also wrote several articles regarding the price-volume relationship. Volume started to increase after September 24.

FNI is moving above its 200-day SMA (bullish for long-term investors). On a short-term perspective, FNI is still moving inside the bullish territory. My three SMAs (10SMA, 20SMA, and 50SMA) form a bullish pattern, too.

Immediate support is near 1.10. Immediate resistance is near 1.30. Breaching 1.30 is a pre-cursor to the next resistance near 1.80. The next support below 1.10 is near 0.96.

MACD is bullish. RSI is near the overbought zone. You have the option to disregard the classical oversold-overbought interpretation for RSI as long as there’s a bullish volume and sentiment. Anyway, your trailing stop-loss should give you a stress-free experience like what I always mention to my Stock Signals clients.

FNI - GLOBAL FERRONICKEL HOLDINGS - Daily Chart - October 24, 2016

Foreign Fund Flow

On a 30-day trading period, FNI is on a Net Foreign Buying worth PHP101,828,649.00.

FNI - GLOBAL FERRONICKEL HOLDINGS - Foreign Fund Flow - October 24, 2016

Top 10 Players’ Sentiment

Participants with a 100% Buying and Selling Activity from Oct-03-2016 to Oct-21-2016 at 12:00PM:

  • 6 out of 103 participants or 5.83% of all participants registered a 100% BUYING activity
  • 9 out of 103 participants or 8.74% of all participants registered a 100% SELLING activity
  • Top 10 Players’ Buying Average: 1.1452
  • Top 10 Players’ Selling Average: 1.1534

FNI - GLOBAL FERRONICKEL HOLDINGS - Top 10 Players - October 24, 2016

Online Foreign Brokers’ Sentiment

Note: Below are FOREIGN BROKERS’ numbers only. There’s a separate chart where you’ll find FOREIGN INVESTORS’ Net Foreign Buying or Selling.

  • From October 3, 2016 to October 21, 2016, 8 out of 11 active online foreign brokers traded FNI.
  • Online foreign brokers’ Buy Average: PHP1.08
  • Online foreign brokers’ Sell Average: PHP1.14
  • Number of net buyers among the participating online foreign brokers: 5 out of 8
  • ATR bought the biggest number of shares among online foreign brokers amounting to PHP314,714,880.00.
  • ATR sold the biggest number of shares among online foreign brokers amounting to PHP193,936,930.00.

FNI - GLOBAL FERRONICKEL HOLDINGS - Online Foreign Brokers' Transactions - October 24, 2016

Volatility

FNI has a moderate risk level based on my proprietary risk indicator.

FNI - GLOBAL FERRONICKEL HOLDINGS - Volatility - October 24, 2016

Volume

Volume has crossed FNI’s 30-day volume average for the past 4 trading days. Volume supports the ascent in price.

FNI - GLOBAL FERRONICKEL HOLDINGS - Volume - October 24, 2016

What Now?

Is it still good to enter a new position on FNI or wait for it to correct near its support?

There’s no standard answer to this question. Ask around and you’ll get various answers. Why is that? It’s because everyone has a unique risk tolerance and situation.

Time and time again, I advise my clients that it is dangerous to ask me or anyone if it’s time to buy or sell a stock. My answer will be based on my personal risk tolerance and circumstance, whether you like it or not.

It may not be a good time to enter a new position for Peter because he has a conservative risk tolerance and the cash he has is the cash he will need for his son’s tuition for the second semester of 2016.

On the other hand, John may still find it a good time to enter a new position on FNI because he is a high-risk trader. Even if he’ll lose the game, it will not affect him because his 5-digit cash is only a lose change in his pocket. Perhaps, John won’t be needing that cash within the next 20 years so it’s not a big deal for him to wait for 20 years until he gets his break-even price.

Do you like this update?

I do hope I was able to help you through my analysis and simplified interpretation of data. Always have a trailing stop-loss to preserve your capital and to protect your gains.

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