@radtec21219 takes the spotlight for this week’s featured trader as he used Exponential Moving Averages (or EMA) to determine $PLC’s potential increase in price.
EMA is a valuable tool for traders since it allows them to make informed judgments based on market trends and price movements. Traders may spot trends, calculate entry and exit points, and successfully manage risk by evaluating the market with EMA.
Let’s look at how @radtec21219 used EMA to his advantage!
In @radtec21219’s post, it can be seen that he utilized 3 variations of the EMA, namely, EMA 20, 50, and 100. When the EMA 20 is higher than the EMA 50, and the EMA 50 is higher than the EMA 100, it indicates a bullish trend, which can be seen in his chart. He also used support and resistance (also known as S/R) to identify the range of the stock and spot potential exits.
At the time of his post, $PLC was trading around the 0.5300 level. The stock surged in price 20 days later, confirming @radtec21219’s sentiments, hitting his 0.5615 level target, and peaking at an increase of about 11% at the 0.5900 level.
TECHNICALS OF THE TRADE
To spot the potential increase in $PLC’s price, @radtec21219 used a moving average strategy that uses the three types of EMA which are: EMA 20, EMA 50, and EMA 100
The Exponential Moving Average of the previous 20 periods is represented by EMA 20. It places more weight on recent prices than older ones and is widely used for short-term trading. Traders use the EMA 20 to identify short-term trends and prospective trading opportunities.
The EMA 50 represents the Exponential Moving Average calculated over the previous 50 periods. This technical indicator is considered a medium-term moving average and is employed to determine the market trend. Like EMA 20, traders use EMA 50 to validate the trend’s direction and identify potential support and resistance levels.
The EMA 100 is a long-term moving average calculated over 100 periods, which is utilized to identify the market’s long-term trend. Traders rely on the EMA 100 to detect significant trends and potential support and resistance levels.
The EMAs 20, 50, and 100 are frequently used in conjunction to present a full view of the market’s direction. Each of these Exponential Moving Averages reflects a distinct time frame. As a result, when utilized in tandem, they give a multi-timeframe overview of the market. Furthermore, when these EMAs are utilized in conjunction, traders may search for crossovers between the various moving averages. For example, a “golden cross” occurs when the EMA 20 crosses over the EMA 50 and might indicate a bullish trend. Similarly, if the EMA 20 falls below the EMA 50, this is referred to as a “death cross” and might indicate a bearish trend.
FUNDAMENTALS OF THE TRADE
Premium Leisure is an investment holding company that participates in gaming-related businesses in the Philippines. The company reported a consolidated net income of P1.26 billion last year, a 12 percent increase over P1.12 billion in 2021, which was mainly attributed to renewed economic activity and the relaxation of mobility limitations. Consolidated revenues rose to P2.08 billion, up 20 percent from P1.727 billion a year earlier.
Pacific Online Systems Corp., a publicly-listed firm owned 50.1 percent by Premium Leisure, likewise posted good 2022 results, increasing sales by 22% to P519 million from P426 million in 2021.
WHAT SHOULD BE YOUR NEXT MOVE
The stock is currently forming an ascending triangle pattern, which is typically followed by a breakout to the upside. So if the stock’s price breaks above the upper trendline, it could signal to buy the stock. However, it’s important to wait for confirmation of the breakout before making any trades. It is critical to
Understand that stock market investment is risky, and there are no guarantees of profit. However, you may make educated decisions that match your financial objectives by researching, creating investing goals, evaluating performance, and diversifying your portfolio.
Once again, KUDOS to @radtec21219 for being this week’s featured trader! Enjoy your 14-day InvestaPrime Access and continue to be an inspiration to the trading community.
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