Category: Latest Posts

Phantom, a.k.a @shadowshammgod, takes the spotlight for this week’s featured trader as he shared his chart for a potential breakout of $PSE:BALAI using simple support and resistances paired with the 50 EMA.

Simplicity is a key principle in trading with technical analysis. Technical analysis aims to identify trends and patterns in financial markets, but this can be a complex task given the vast amount of data available. By keeping his analysis simple,  @shadowshammgod was able to see the overall picture and spot a potential breakout that could hit and retest the higher resistance of $PSE:BALAI in a one-day timeframe. 

Let’s take a look at how @shadowshammgod uses this to his advantage.

@shadowshammgod used S/R (or support and resistance) to spot $PSE:BALAI about to break out and flip its previous resistance at the 0.6000 level. Still using S/R, he identified the next resistance at the 0.7000 level, where the momentum of the breakout could die down. $PSE:BALAI broke out the same day and four days later went on to hit the 0.70 resistance and peak at 0.71, resulting in an increase of around 16%. 

TECHNICALS OF THE TRADE

After its downtrend since August of last year, $PSE:BALAI has been ranging sideways over the following months after. Since November of last year, the 0.6100 level has served as a strong resistance, denying breakouts over four times until finally being flipped this past January 10, 2023. 

Alongside the use of proper S/R, @shadowshammgod also utilized the 50-day EMA, which is significant because it may be used to identify major levels of support and resistance, as well as to show the current trend’s direction. With no additional indicators required, he was able to execute and profit from the trade.

FUNDAMENTALS OF THE TRADE

In order to reach its goal of 130 stores by the end of 2023, Balai Ni Fruitas Inc., the company that owns the Balai Pandesal brand, announced its plan to start an aggressive expansion strategy.

The business intends to extend this to 200 locations by the end of 2026, according to Calvin Chua, director, and financial adviser at Fruitas Holdings Inc., the company’s publicly traded parent company.

The ongoing store network expansion of the Balai Pandesal brand has contributed to the significant increase in its revenues; As of October 2022, BALAI currently has 91 active stores nationwide, of which 43 stores are Balai Pandesal, 39 are Buko Ni Fruitas stores, and 9 are Fruitas House of Desserts stores.

WHAT SHOULD BE MY NEXT MOVE

Since the $PSE:BALAI is still currently ranging and is now hovering around the 0.6000 level again, it’s advisable to wait and see if the level would successfully flip and serve as the new support or if it would continue to decline. If it does continue to decline, the previous breakout would only be a false breakout and would mean that there was a lack of buying or selling momentum or there has been a sudden change in market sentiment.

Once again, KUDOS to @shadowshammgod 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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The tulip mania happened during the 1600s in the Netherlands. The Dutch were so entranced with the beauty of tulips that it led to a speculative frenzy. Historically, this was the first-ever speculative bubble. The tulip mania was the forefather of the dot-com bubble, the housing bubble, and all the meme stocks that soared to the moon of late.

The Makings of the Tulip Mania

It all started when tulips first came to the Dutch. Tulips were imported to the Netherlands from the Ottoman Empire. From the get-go, tulips became widely popular. The exoticness of the flowers caused them to immediately become a must-have luxury among the rich. It was “proof of bad taste” among the wealthy and noble to not have a collection of tulips.

Of course, the merchants had to follow the trend. As they sought to be like the upper class, they also brought more demand for tulips to the table. The Dutch heavily bought tulips. However it’s important to note that tulips were only merely purchased as a status symbol. Although a beautiful flower, much of the demand for it was due ironically to the big price tag.

While the flower was already priced very high, the tulip mania hasn’t even started yet. What triggered the prices to rampage was the discovery of “broken bulb” tulips. Since the demand for tulips was high, locals started learning how to nurture and cultivate tulips. Soon producers discovered a new kind of tulip. Whereas usually tulips had single solid colors, broken bulb tulips had striped multicolor designs. This specific variation caused market prices to go up in a frenzy. 

The Market in a State of Frenzy

The demand for tulips quickly outpaced the supply, causing prices to shoot upwards. Of course, this caught the attention of traders and speculators who then came into the markets – providing more fuel to the flame. While an exact value is hard to precisely calculate, estimates pegged some of the rarest tulips to cost up to $1,000,000 by today’s standards. On average, tulips traded for around $50,000 to $150,000. The market for tulips was very active to the point that a market was set up for contracts.

“Many who, for a brief season, had emerged from the humbler walks of life, were cast back into their original obscurity. Substantial merchants were reduced almost to beggary, and many a representative of a noble line saw the fortunes of his house ruined beyond redemption.”

– charles mackay

By this time, everyone now wanted to own tulips. According to Mackay’s account of the event in his book Memoirs of Extraordinary Popular Delusions and the Madness of Crowds, different people from different walks of life took part in the trade of tulips. From nobles to farmers and even servants. However, everything that glitters doesn’t always turn out to be gold. Similar to the bubbles that followed in history, tulip prices plummeted. Many were left with contracts worth nothing, and the tulip mania was considered to be the first recorded bubble. 

While the market crash wasn’t as economically devastating as depicted in tales (thankfully no, the tulip mania did not cause a depression), there was still real economic damage done. Nobles drew in losses worth millions in dollars by today’s standards. Business relationships built on trust were destroyed. A cultural shock was felt in a society with complex credit systems for their time.

Similarities to the Markets Today

“I can calculate the movement of stars, but not the madness of men.”

– Isaac newton

The tulip mania has many traits similar to more modern market bubbles. One of the main driving forces of bubbles is the nature of human behavior. Despite financial literacy becoming more widely taught, the same old patterns of behavior are still prevalent in the markets. In any market, speculation can be a strong force that pushes prices higher. 

As prices keep going higher, herd mentality can take place where investors follow the actions of others in the market rather than making their own informed decisions. Similar to the tulip mania, people invest in certain assets just because other people are making money doing so. Likewise, the ending is always the same for bubbles – an abrupt and unsightly market crash.

Usually, market bubbles have some telltale signs, including rapid price increases, widespread speculation, and a disconnect between underlying fundamentals. Although different speculative bubbles have different characteristics, there is one unifying trait that can be noticed. In bubbles, investors are often in a state of euphoria. When things seem too good to be true for everyone, that’s usually indicative of a bubble getting ready to burst.

Moving Forward

While we will never know what will exactly happen in the future, we can often use history as a reference. The tulip mania was just one of the bubbles in history – we can read about the many others to get a grasp of the dynamics involved in these peculiar situations and gain an edge in the process.

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Have we learned the lessons from the dot com bust?

1) careful financial planning and due diligence
2) the dangers of over inflated valuations
3) need to focus on long term sustainability
4) need for stronger regulation of financial markets to prevent bubbles pic.twitter.com/PlicYiqqaw

— Eze Vidra (@ediggs) December 9, 2022

As always, the markets often don’t reward the smart or the wealthy. The markets reward those who show up and take the time to understand the recurring behaviors of market participants.

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@virgelbong24 takes the spotlight for this week’s featured trader! He shared some of his thoughts on certain trades recently, and one of them was his view on $BTC.

While $BTC had a rough 2022, it has started to regain strength these past couple of weeks. Bitcoin has now rallied by more than 10% this year and is looking to test the 19,000 resistance level.

TECHNICALS OF THE TRADE

Bitcoin was and still is, in a long-term downtrend. After the crypto markets crashed weeks ago, demand hasn’t come back into the cryptocurrency. However, as prices stabilized recently, @virgelbong24 saw an opportunity.

Since $BTC was forming higher lows, he figured that maybe a quick swing trade can be taken. The immediate target would of course be the upper end of the range. Keep in mind that overall, the asset is still in a downtrend so profits and stop losses need to be taken quicker. With no other indicators needed, just support and resistance, @virgelbong24 was able to profit from a good risk-to-reward trade.

FUNDAMENTALS OF THE TRADE

$BTC and the overall crypto market had a gloomy investor sentiment for the past couple of weeks. However, developments across the web3 industry continued to shine through. Different traditional institutions have partnered with various blockchains to bring forth revolutionary features and products that look to create a positive impact on the world.

This, coupled with the positive economic data recently reported, could have been factors that helped push Bitcoin higher.

WHAT SHOULD BE MY NEXT MOVE

Currently, $BTC is testing the 19,000 resistance level. Although there has been strong momentum, it’s advisable for buyers to wait and see if Bitcoin can break past this level. Otherwise, the cryptocurrency could just be experiencing a counter-trend move within its long-term downtrend.

Lastly, you should wait for a continuation pattern to form as well before jumping into Bitcoin if you’re bullish. Ideally, you’d want a good risk-to-reward ratio regardless of where you see the asset heading.

Once again, KUDOS to @virgelbong24 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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As the financial markets have evolved over the years, market correlations among different assets has become more and more pronounced. To put it in simple terms, it is the measure of how two different assets move depending on the price action of the other. 

This concept is widely used by both institutions and even discretionary traders. When used in a quantitative model, correlation is signified through values between -1 and 1. The value -1 signifies a perfectly negative correlation. Here you’d see that the two assets move perfectly away from each other. On the other hand, a value of 1 signifies a perfect correlation. This means that the two assets move in perfect tandem with each other. 

How market correlations happen

Market correlations are often established due to the inherent nature of different assets. For example, two chip manufacturers might both experience a strong correlation with each other if there is increased demand for the whole industry. Since they both benefit from higher demand for chips, both might gain attention from investors. 

Another cause could be that one asset is a commodity, while the other is the stock of a mining company. For example, if the prices of nickel rise, it would make sense that nickel miners and producers stand to benefit as well. 

Real-world examples

While it might seem like market correlations are straightforward, there’s another factor you have to consider. In the real world, assets usually aren’t perfectly synced with each other. The global financial system has many different macro and micro factors that affect the buying and selling of different assets. Usually, you’ll encounter one asset following the path of the other asset, but only after a delay. 

Take $TAN, for instance. During the early days of the lockdown, the U.S. stock market rallied strongly. The solar energy industry was one of the sectors that investors favored. For a period of time, renewable energy across the world became an increasingly talked about topic. As such, investors flocked towards not just solar stocks, but a wide variety of companies that do business in renewable energy. 

$ACEN is one of the premier renewable energy companies in the Philippines. However, the stock didn’t gain momentum until after a whole month compared to the others. While there was good reason $ACEN would benefit from the trend, there were other factors in play. 

One possible factor could’ve been the weak Philippine market. During this time, the Philippine index was still in a downward channel. $ACEN only started rallying once the $PSEi broke out of the mentioned channel. 

This scenario also presents a key insight: stocks often have a good correlation with their respective market indices. Often called the beta of the stock, you’ll notice that even non-blue chip companies can become heavily affected by the swings of the Philippine market index. The reason for this is related to how money flows in the markets. Essentially, the market’s liquidity gets sucked out if investors are bearish overall. This would become a strong headwind that can hinder mid-caps and even third-liners.

How knowing about market correlations helps your trades

 What we’re sharing here is a snippet from our recent research done on gold miners. As the commodity has been strong recently, we wanted to find out who would benefit the most. By just simply looking at how different assets behave in relation to each other, you can find insights that can greatly aid your trading decisions.

Aside from commodities, this form of market research can be done across a whole range of asset classes. While the start of 2022 has been rough for almost all markets, there was a niche market that sprung to life. Some traders were early to figure out that there were profits to be made in derivatives related to treasuries. It’s widely known that inflation rates and interest rates have a strong correlation with each other. For them, it was as simple as finding which derivatives or instruments to trade in order to benefit from the macroeconomic situation.

Last Remarks

Overall, understanding that the market correlations are becoming more pronounced today can be a good added edge to your trading system. By taking into account what certain scenarios can do to other assets, you can research and find interesting past market behaviors that you can take advantage of. However, just remember that correlation does not always equate to causation. Most of the time old correlations can die down and new ones can form. 

In the end, it all boils down to being diligent and keeping up with the forever-changing market dynamics.

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@zat0ichi takes the spotlight for this week’s featured trader! A member since 2021, Kenzo has been actively navigating the markets for the past couple of years. Recently, he shared one of his trades on $UBP, a strong banking name.

$UBP is now up by more than 17% since @zat0ichi posted the stock. To capitalize on the opportunity, our featured trader of the week employed a very simple, but potent, tactic. The timeless buy low, sell high.

TECHNICALS OF THE TRADE

On the daily timeframe, $UBP was in a consolidation. However, the range was big enough that traders can look for swing play opportunities. As $UBP was making higher lows, @zat0ichi figured the 75-78 support area would be a good support zone. 

Due to the wide range, placing targets near resistance levels would’ve given a good risk-to-reward ratio. @zat0ichi’s risk-to-reward ratio for the trade even went as high as 8! As buyers have now come in, $UBP is currently trading at 89.5/sh. Although not exactly where his TP is, the trade by now would’ve already given a big boost to his portfolio.

FUNDAMENTALS OF THE TRADE

It’s currently being speculated that $UBP along with $DMC will be included in the $PSEi’s basket of 30 companies in the upcoming index rebalancing. This could be a big boost for the two companies given that aren’t widely held stocks among investors. By being added to the Philippine market index, fund managers would then have to include these two companies in their portfolios.

Another factor that could’ve caused the rally in $UBP might have been the announcement of its SRO. To infuse more capital into its digital banking segment and other general corporate uses, $UBP will be offering shareholders the right to buy shares at a discounted price. This is somewhat similar to stock dividends, except investors will be given the option to buy discounted shares rather than receiving shares straight up. Expect prices to fall once the additional shares are added to the public float. However, the selldown might only prove to be temporary if $UBP continues to have a bullish outlook.

WHAT SHOULD BE MY NEXT MOVE

Currently, $UBP is about to conduct its SRO to current shareholders. The record date is set on January 16, and the ex-date would be on the 27th. As with dividends, expect a short-term price fluctuation to the downside. If you’re an investor looking to hold $UBP for the long term that event might prove to be an opportunity for you to get shares at a cheaper price. 

However, if you’re a short-term trader it might be best to sit on the sidelines and observe what market structure the stock might form in the coming days.

Once again, KUDOS to @zat0ichi 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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As we start the new year, many of us have a lot of goals in mind. “I’ll be more fit.” “This year will be the year I become a millionaire.” We have different goals and different endeavors. All of them have one thing in common: EFFORT. We usually brim with motivation at the start. But, what separates achievers from the rest is consistency and intensity. As we grind towards our goals, we’ll notice some paradoxes of effort.

BIG goals generate BIG effort

When we set goals for ourselves, we always factor in how big of a goal it is. For traders, this can take the form of how big of a return we want to achieve. Are you aiming for a 20% YTD? Maybe a 50%, or even more, a 100% return for the year?

Usually, we look for a goal that seems logical and safe. However, we often shy away from difficult ones. One astounding paradox of effort is that when the going gets tough, the tough get going. Logically, we’d imagine that having bigger goals or challenges makes life harder for us. Paradoxically, there are a lot of examples that show otherwise. In a story from Cal Newport, he noticed that grad students suddenly perform better in school after having kids. Although the added responsibilities would make life harder for the new parents, the results showed otherwise. When faced with adversity, we’re capable of stepping up our game. 

Of course, there are also some cases where people struggle and fail. To elevate yourself, you have to take responsibility for the big goals you set for yourself. Last year we saw the markets plunge into bearish territory. It might’ve seemed impossible to outperform, but the saying “there’s always a bull market somewhere” holds true. If you dreamed big, took responsibility, and brought out your best efforts, you would’ve found 2022 featured many outliers. Though not a lot, there were enough for people who persevered for a strong performance.

The more effort you put in, the more effortless you’ll look

As we strive for our goals, many of us will wonder why others make it look easy. When we struggle with our trades, it won’t be hard to notice how effortless it looks when others do it. Often, what we fail to see underneath the PnLs and results is the hard work that trader puts in. 

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The Paradox of Effort:

You have to put in more effort to make something look effortless.

When you realize this, you start to do things differently.

— Sahil Bloom (@SahilBloom) June 10, 2021

A paradox of effort is that the more effort we put in, the more effortless we’ll look. We have to grind our systems and how we execute to achieve greater levels of success. Once we master our craft, the skills honed will then make it seem effortless to others. The Navy Seals, known for their harsh training, often make whatever they do look relatively easier. We personally know a former navy seal who made swimming through a storm look like child’s play. They also have a famous saying:

“Under pressure, we don’t rise to the occasion, but rather sink to the level of our training.” 

This is often true across any field, even in the markets.

Hard work and sincerity

Sometimes you may be asking yourself, why does it seem like my efforts aren’t being rewarded? Paradoxically, more effort does not always equate to better results. The cruel reality is that the world doesn’t reward effort, results are rewarded. However, that doesn’t take it out of the equation. Rather, we also need to be sincere as we strive for our goals.

In trading, the markets will often hand you the lessons you need to learn. If you constantly put effort into a certain aspect of trading without acknowledging the bitter pills the market’s giving you, nothing will change. You have to be sincere about your goals and learn from your experiences. This will help you steer your efforts toward the right path. 

What’s your goal for 2023?

As we head into the new year, let’s all work towards the biggest goal we can find and commit to reaching that goal no matter how hard it gets. Here at Investagrams, we aim to provide you with all the tools and knowledge you’ll ever need to take your trading to the next level. From learning the basics to accessing high-caliber tools, we’ll be with you every step of the way. 

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@kenzochan takes the spotlight for this week’s featured trader! A member since 2018, Kenzo has been actively navigating the markets and is one of the few that have profited from $NOW.

One of the recent outliers, $NOW is up by almost around 70% just for December. However, the rise was a fast and volatile one. To fully take advantage of this kind of move, you’d need to make swift decisions. @kenzochan’s analysis fully shows how diving into the intraday chart can help aid your trades.

TECHNICALS OF THE TRADE

On the daily timeframe, $NOW only took a few days to consolidate. This would’ve thrown some traders off as prices didn’t even reach the 20-day moving average. Since momentum was very strong, it would’ve been easier to find continuation patterns within the smaller timeframes. @kenzochan did so and found trend following opportunity.

It’s important to note that he stuck with using the 15m timeframe to manage the trade. The initial plan was based on that timeframe. Hence, it would make sense to use that timeframe as well to guide your executions. 

Here we can see that sticking to the 15m timeframe allowed @kenzochan to act swiftly. Especially in a volatile market, having the capability to make fast decisions in itself can be an edge. By using the moving averages in a lower timeframe for trims and stops, he can slice positions faster compared to other traders.

Of course, the longer-term time frames are still important as they provide a fuller picture of how supply and demand are playing out in the market. By combining the best of both short and long-term timeframes, Kenzo was able to trim his position during the retracement, while still keeping a portion for the bigger move!

FUNDAMENTALS OF THE TRADE

The recent bullish sentiment in $NOW came after positive developments were reported. With the company securing a fund grant to increase its 5g capabilities and network coverage, it can compete better against telco providers.

Another factor could’ve been the troubles $TEL is facing. A major competitor in the industry, PLDT is facing a lot of backlashes after they have been reported to have overspent the past couple of years. With the budget overrun exceeding their threshold by a large margin, authorities are currently investigating the controversy. If PLDT were to lose its grasp on some market share, other competitors might stand to benefit. This would include $NOW as it tries to get a bigger slice of the market.

WHAT SHOULD BE MY NEXT MOVE

Currently, $NOW is still exhibiting strong signs of momentum. Holders of the stock would most likely look to hold on as long as they can. However, it wouldn’t be advisable to chase the stock if you don’t have a pre-existing base. 

Ideally you’d want to wait for set-ups to occur first before looking to make an entry. Keep in mind as well that the next resistances $NOW would need to break next are 2.5, 3.15, and 5.25. Don’t give in to FOMO and make sure to only make a move if a good risk-reward trade comes.

Once again, KUDOS to @kenzochan 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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