Technical Analysis: Buy Metrobank (MBT) Now or Wait for a Breakout Above 46.55?

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MBT Technical Analysis

Metropolitan Bank and Trust Company (PSE:MBT) has been closing at a price higher than the previous trading day’s closing price for three consecutive trading days already. Today, August 4, MBT went up by 1.66 percent at P45.95 per share. The foreign investors registered a net buying amount worth P47.80 million today. That’s still not enough to outperform the bigger net foreign selling amounts since the past two weeks.

Since MBT is an index stock, I am not expecting any volume-related concern on this name. I won’t be surprised if most, if not all, of its daily volume is higher than the 50 percent of its 10-day volume average.

Metropolitan Bank and Trust Company (MBT) Analysis - Daily Chart EOD - 8.4.2021

MBT’s support is near P42.90, while its immediate resistance is at P51.90. I used the classical horizontal lines in plotting those areas. Using Fibonacci retracements, I see a support level at P45.70, confluent with the 38.20 percent Fibonacci retracement. I also see resistance at P47.40, confluent with Fibonacci’s golden ratio, the 61.80 percent retracement. As you may already know, support and resistance levels are subjective to the analyst’s eye and depend on the tool used. Attend one of the Saturdays of Equilyst Analytics’ “1-ON-1 WITH JAYCEE DE GUZMAN” project. I will share with you when I use horizontal lines and Fibonacci retracements/extensions in plotting support and resistance areas.

1-on-1 with Jaycee De Guzman (stock market consulting and portfolio rehabilitation)

Meanwhile, Metrobank maintains its low erraticity or risk level due to its 10-day historical volatility score of 35.47 percent.

On the other hand, MBT’s moving average convergence divergence (MACD) is still not completely bullish because it’s still moving below the signal line. I see a formation of a bullish convergence between the MACD and the signal line, however. As the price continues to draw closer toward P46.55, the 50 percent of Fibonacci retracement, we will see the MACD overtaking the signal line.

Dominant Range Index: BULLISH
Last Price: 45.95
VWAP: 45.85
Dominant Range: 45.95 – 45.95

Metropolitan Bank and Trust Company (MBT) Analysis - Dominant Range Index EOD - 8.4.2021

Market Sentiment Index: BULLISH
19 of the 50 participating brokers, or 38.00% of all participants, registered a positive Net Amount
19 of the 49 participating brokers, or 38.78% of all participants, registered a higher Buying Average than Selling Average
50 Participating Brokers’ Buying Average: ₱45.86307
50 Participating Brokers’ Selling Average: ₱45.88128
9 out of 50 participants, or 18.00% of all participants, registered a 100% BUYING activity
19 out of 50 participants, or 38.00% of all participants, registered a 100% SELLING activity

Metropolitan Bank and Trust Company (MBT) Analysis - Market Sentiment Index EOD - 8.4.2021

Verdict

Metrobank’s buy rating is only 83.33 percent because 1 of the 6 parameters I’m monitoring is still bearish. I have risk-averse investment psychology, so you can’t blame me for wanting to wait for another element to turn bullish.

Recommendations

Do you already have Metrobank in your stock portfolio? If yes, the next question is, is your trailing stop intact? If yes, you have the option to hold your position. I don’t see the need to reduce the risk percentage on your trailing stop because MBT’s Dominant Range Index and Market Sentiment Index are bullish.

You don’t have Metrobank yet, but you’re planning to buy shares? If you see your investment psychology in mine, you may want to wait for the MACD to register a golden cross above the signal line. Suppose you’re one of our clients at Equilyst Analytics. In that case, I highly recommend that you check the Stock Screener tab by the end of the day so you’ll see our latest recommendation not only for Metrobank but also for all actively traded stocks in the Philippine Stock Exchange. We also have a private forum where you can ask questions.

Jaycee De Guzman

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