Saturday, February 16, 2008 Traders' group: Buy mining, oil stocks
A group of community traders and analysts are encouraging Filipinos to purchase stocks of mining and oil companies as these industries appear bullish in the Philippine Stock Exchange (PSE).
Since August last year, the mining and oil industries have maintained a 45-degree “trend line,” which — according to technical and chart analysis — is a “healthy” growth, said Jeanette Gamboa, assistant vice president for operations and marketing of Absolute Traders and Consulting Inc. (Absolute Traders).
Absolute Traders, a company recognized by the PSE, provides technical assistance to Filipinos who want to trade in the stock market. It teaches, among others, how to increase shareholdings by trading “blindly.”
“It’s a purist way to invest in stocks. By only looking at the charts, you know what industries are doing well even without the influence of news, usually those that are political,” Gamboa explained.
In an interview with Sun.Star Cebu, Gamboa said the group’s recent study on mining and oil companies, including those venturing into explorations, show short-term growth whose trend line on the charts is moving “not too steep, nor too slow.”
Property sector
She also said that based on the charts, the property industry is on a “side-ways trend” or plateau growth. The property sector is “indecisive,” which means that it may be growing in the short run but may eventually decline in the long run.
In general, though, Gamboa said the Philippine stock market is very attractive to foreign investors even though it is “entwined” with the US economy, which is “on the verge of recession.”
The US remains to be the Philippines’ major trading market. A large number of overseas Filipinos, who send money to their families in the Philippines, also reside or work in the US.
“Even if the US economy is slow, our stock market is not necessarily on a recession because we have support from other countries. Small markets, like the Philippines, are now the focus of investors because there is more room for growth,” she said.
With the Philippine stock market becoming more aggressive, Gamboa said Absolute Traders has sped up efforts to lure more Filipinos to trade in stocks, bonds and foreign exchange, but equipped with the knowledge on how to properly trade.
Understanding
While it is true that the stock market is a “very risky” business to engage in, the lack of proper understanding and monitoring will truly leave a trader empty-handed, she added.
On the other hand, some market investors who are new to the business usually consult a broker to help them determine which companies are “on a hit,” but then they fail to monitor how their stocks are trading.
She said this as a common failure of many stockholders. “They think they can gain money even if they leave it (investment) unattended,” she added.
“Remember that the chart is moving, so you have to stay alert,” she said.
Gamboa’s advice to those who want to purchase stocks: “Never ‘bottom pick’ or buy stocks at the cheapest price.”
She also recommended that traders should not stay long with a certain stock. If one has reached 40 percent of his earnings, it is advisable to stay out of that particular stock.
Gamboa mentioned that while there is a significant increase in the number of Cebuanos who engage in the stock market, most of them are “conservative traders” or those who purchase stocks in minimal amounts.
Absolute Traders, which started in Manila 2005, expanded operations in Cebu in August 2007.
The company conducts seminars on topics like chart analysis and technical analysis, and foreign exchange. It has a seminar in Cebu on Feb. 22 to 24. MMM
