7:00 pm Wednesday 28 July 2010
A broker friend was telling me today that a number of floor traders are still disoriented with the new fluctuations in the now present system. Many of them have been so used to the larger fluctuations that they cannot yet feel comfortable with the almost seamless fluctuations that we are seeing now. Honestly, I think many on-line traders are probably as disoriented as those in the trading floor. A fund manager was actually telling me that bid and offers appear to be all over the place, and he senses that both buyers and sellers do not really know how to strategize their order posting in this new system.
Incidentally, one very seasoned broker said to me that if you are a real investor, your would easily adjust to the new system nad it actually allows you to accumulate your position at closer prices. I am very much in agreement. I think with the value turnover in the market coming back, those that have given their trading strategies deep thoughts already have the hang of things.
There was a volume and price spike in FLI today. I do not really know what is going in FLI, but when you look at it, the fluctuations in the stock has not changed much with the new system. You will not be disoriented at all. I think the same is true with MEG and the stocks that are around the one peso level.
I managed to follow the price of PNB today for a short while as I was in and out of my office and could not steadily access the internet for active stock prices. I am quite pleased that profit taking is going on in PNB. It looks to me that 40 could be the stong support, and those who were anxious to being left behind when it shot up to 43.50 can now buy cheap. At 40, there is at least a 20% upside which is almost certain. The risk reward profile remains decently generous.
For those who agreed with me that MPI was cheap below 2.60, I think you should be reaping the rewards today. This remains to be a trading stock and will trade in ranges. Just remember, this is a stock that has a market capitalization that is big enough to invite trading, and it is also very widely distributed that liquidity will always be available. This stock has a long way to go, and astute traders can make money on its volatility. Longer term players can always buy it on weakness, and you can surely get out without big losses. In fact, if you can identify the range, it can be a steady source of trading profits.
Anyway, I hope everybody is plotting strategy. I continue to think that the market will be favorable although it is not yet at a point that it will run away from us. Try to trade smart.