JFC Technical Analysis
Jollibee Foods Corporation (JFC) closed at 225 per share, down by 2.17 percent, as of August 9, 2019, Friday.
Foreign investors continued to unleash their JFC shares. The catalysts for this bearish sentiment are JFC’s acquisition of The Coffee Bean and Tea Leaf (CBTL) and the disappointing 1H2019 earnings report.
Jollibee registered a disappointing P1.1 billion net income for 2Q2019, which is 50 percent lower than the previous quarter.
Its 1H2019 net income of P2.7 billion is 34.4 percent lower compared to the same period last year.
The foreign investors, who are most likely value investors (focused on the present financial status of the company), have been on a Net Foreign Selling mode for 4 consecutive days already, resulting to a more or less P650 million worth of an outflow of smart money.
JFC’s immediate support is at 220 followed by 200 and 180. The immediate resistance is at 240 followed by 270.
My 10SMACD combo remains invalid. My Momentum Power Indicator, which is composed of four criteria, remains bearish.
RSI is about to dive below 20 percent. If you’re thinking that JFC is already too cheap to ignore, I am telling you that it could still get cheaper than this. There are no signs of reversals yet.
This stock’s risk level remains low, but it doesn’t mean you should enter a new position now just because it’s an index stock.
The downward momentum remains strong as the -DMI hovers the +DMI with a matching ADX score of 45 percent.
Last Price: 225.00
Most Traded: 226.6 – 225
Most Voluminous: 227 – 225
The dominant range is between 225 and 230. This is another data-driven basis why I said above that the downtrend is more likely to continue.
True Market Sentiment
True Market Sentiment of JFC as of Aug-09-2019 at 03:30PM, with a last price of 225.00.
5 of the top 10 brokers registered a positive Net Amount
4 of the top 10 brokers registered a higher Buying Average than Selling Average
True Market Sentiment: BEARISH
Top 10 Players’ Buying Average: 227.3653
Top 10 Players’ Selling Average: 227.1943
53 out of 88 participants or 60.23% of all participants registered a 100% BUYING activity
3 out of 88 participants or 3.41% of all participants registered a 100% SELLING activity
The top 10 brokers are not interested to buy the dips yet.
I advise that you ignore the buying appetite of those 53 brokers who did nothing but buy Jollibee today. I speculate that these are the long-term investors who have been brainwashed by this non-sense belief of those who do peso-cost averaging that goes like this: “it’s okay to buy the stock for as long as it’s trading below the Buy Below Price.”
Why keep buying when there are signs left and right that the downtrend in price is more likely to continue?
The mentors of these investors who do cost averaging need to see an ophthalmologist to seek professional advice if their being color-blind is curable.
It’s the exact same recommendation as what I wrote on my technical analysis of Jollibee last August 6, 2019.
Entertain the idea of doing a test-buy once the Momentum Power Indicator is bullish and, ideally, when the 10SMACD combo is valid.
Did you attend The Evergreen Strategy in Trading the Philippine Stock Market seminar? If yes, please check the handouts I sent you as a refresher to my 10SMACD combo and the Momentum Power Indicator.
Are you a subscriber of Equilyst Analytics? If yes, please check the Quick Start Guide and consult in the Private Clients Forum if you have follow-up questions about JFC or other stocks.
See you in Cavite on August 10 (Tomorrow) and in Makati on August 17
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- Lesson 4: how to identify a confirmed buy signal
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