(UPDATED: 09.13.17). As expected Security Bank Corporation (SECB) has pulled back immediately after the effectivity of its weight increase in the MSCI Philippines Index last August 31. Now that the trading on the stock has normalized, SECB may once again position for an upside swing. As you can see, the stock has managed to establish a higher low base at Php140.00. Its ability to do so may place in on track to break its all-time high of Php263.00.
In our Equity Advisor issue last June 4, we noted that Security Bank Corporation (SECB) would soon revisit its all-time peak following its breakout from a complex bullish reversal formation. As you can see, its break above the Php220.00 handle had indeed carried the stock back to its all-time resistance of Php257.00, giving it an easy gain of 14.63% in a little over 2 months. Presently, we believe that holders should take its current strength as a window to take profit on the stock. This is so as its recent jump was only stirred by the announcement of its weight increase in the MSCI Philippines Index effective on August 31, 2017. From today until the said date, the stock may likely keep itself afloat as active funds anticipate the inflows on the stock by passive index tracker funds at the end of the month. After the rebalancing date, the trading on stocks that will have changes in the index like in SECB will normalize immediately the day after. In short, we are expecting SECB to soften again as the month of September opens. From a technical standpoint, SECB is trading right at the proximity of its major resistance at Php257.00. A resistance at its present score plus an overbought RSI reading may likely cap any further rise on the stock. As such, holders are again encouraged to profit take and may just choose to re-enter on correction or on a high break later on.
SECB write-up from the Trading Edge Equity Advisor:
June 4, 2017
Security Bank Corporation (SECB) may likely see an influx of demand flows in the coming weeks. This is so as the stock has just broken out from a complex bullish reversal formation. Its rise over its neckline resistance at Php220.00 may then lead it towards its next hurdle at its all-time peak of Php255.00 to Php257.00.
*Consensus target price or average target price given by the major foreign and local brokers of various stocks on top of index names are available in our Equity Advisor!
For those who are interested in technical analysis or learning how to profit using charts, we have an upcoming Technical Analysis Course on October 7 & 8, 2017. For more information, you may send us a direct message here or text/call (+63) 917 899 90 09.