Emailing Tech Outlook Update

Philippine Market:
Technical Update
Presented by:
Juan G. Barredo
Chief Technical Analyst
COL Financial Group Inc
www.colfinancial.com 1
OVERVIEW
• PSEi still into a corrective wave after breaking its 17-month up
trendline
• A likely test of major support 7,272-7,239 is upcoming
• Technical weakness prevails and may convey a high chance of a
support breach
• Expect some headwinds:
– Watchful of the SP500’s sideways grind which nears support
– China market flip-flops, more turbulence seen
– Currency devaluation forces more volatility
– Recent Dollar advance still weighs on some currencies &
commodities
• Motion into defensive buying and wait for better demand
setups… as a possible reaction to 7,050-6,950 looms
PHILIPPINES: May need more corrective action
PSEi may look for a major reset to its Long Term Up Trendline
PSEi (7-yr view) Long Term View:

• Our earlier 6-month target of
8,000-8,200 was hit (8,136 high)
• Overbought levels prompted a
Reset? correction, to which a ‘Reset’
swing was necessary
Reset
• Trendline support is currently at
7,050
Reset
PSEi slides below its 17-month Up Trendline, reactive trend proceeds

PSEi (2-yr view)
Medium Term View:
• Corrective wave widened and
broke below its 17-month up
trendline (7,750)
• It presently drives a short to
medium term corrective phase
• Support is at 7,272-7,225
• After this next support is placed at
7,050 – 6,950
Lodged between 7,665 and 7,272 – prices need to hold over support
PSEi (8-month view)
Scenario # 1 Support Holds
Scenario # 2 Support Fails
If prices break 7,272-7,239,a “C” wave extension will ensue

PSEi (6-months)
Elliot's Corrective Waves
(A-B-C)
(A)
(B) (C)
MSCI Phils “EPHE” (6-months)
Lodged between 7,665 and 7,272 – it needs a show of strength now
in order to avert casting a third attempt at its recent lows
PSEi (2010-2011) vs (2015)
(A) (B)
2010-2011
(C) (History Sample)
Major Support Test 2015

(Present)
INDUSTRY SECTORS: Holdings & Property hold out better
Holdings Property Services
Commercials Financials Mining/Oil
Weakness still seen across sectors, but some oversold reads do show which may offer temporary/selective rallies soon
PHILIPPINES: Heavy load to carry
COL’s Technical Guide shows 82.04% of its monitored stocks to be

under short term down trends; Net Foreign outflows still a concern
Short Term Trends* # of Issues % of Whole
UP 14 8.38%
DOWN 137 82.04%
SIDEWAYS 16 9.58%
Total 167 100% * as of 8/17/2015
20
16.5
Net Foreign Flows (PHP Billions)
15
9.5 2015 Net Inflows of P4.6-B**
10 7.3
4.3
5 3.064.2
0.92 1.6 2.3 0.555
0.478 0.61 0.086 0.266
0
-1.085 -0.282 -0.993 -2.1 -0.745 -0.613
-5 -2.5 -3.2-2.6-2.6 -2.51 -2.02-3.5
-4.4 -3.6 -4.9
-3.7
-5.66
-10
1/9/2015
1/16/2015
1/23/2015
1/30/2015
2/6/2015
2/13/2015
2/20/2015
2/27/2015
3/6/2015
3/13/2015
3/20/2015
3/27/2015
4/3/2015
4/10/2015
4/17/2015
4/24/2015
4/31/2015
5/8/2015
5/15/2015
5/22/2015
5/29/2015
6/5/2015
6/11/2015
6/19/2015
6/26/2015
7/3/2015
7/10/2015
7/17/2015
7/24/2015
7/31/2015
8/7/2015
8/14/2015
* as of 8/14/2015
PHILIPPINES: Index 30 Review
Issues outlined in red show very poor technical standing
Sup1 Sup2 Res1 Res 2 Sup1 Sup2 Res1 Res 2 Sup1 Sup2 Res1 Res 2
893 871 930 947.5 2700 2570 2760 2823 37.2 35.7 39.3 41.36
180 166 204 211.5 745 700 800 823.5 89 85 96.50 100
65 61.5 73 75.75 98.20 91.8 105 111.4 19.9 18.5 21.3 22.5
56 53 59 61.65 82 77.2 87 90 100 95 106 112.1
1287 1215 1343 1455 21.5 19.4 23 24 186 180 195.9 200
2353 2218 2706 2800 42 40.8 45 46.75 4.7 4.2 4.96 5.34
6.06 5.40 7.07 7.50 27.8 26.66 30 31.8 4.12 4 4.65 5
11.7 11 13 14 282 270 297 310 14.27 12.56 15.12 16
113.9 110.5 132.4 140 24.3 22 26 28 6.7 6 8.48 10
55 40 57.7 60.5 9 8.5 10 10.5 7.32 6.7 9 10
PHILIPPINES: Undergoing a Reset
• The PSEi currently drives a major support challenge and

needs to hold here or facilitate a “C” wave swing
• A successful show of support from a retest of the 7,272 area
can set off a wider comeback
-This can effect a counter rally that could target close to 7,820-7,900
• However heavy load is presented (as many listed companies
show ongoing down trends) which could force the PSEi
support to break
• It may force on an extension of the corrective swing looking
at 7,050 – 6,950
-A counter rally from here may target close to 7,460-7,600
• Buying actions should be protracted into the next two & a
half months as corrections need time to flesh out
Possible
Headwinds
External Factors: The US
The SP500 shifts sideways and is now pressed on to a decision by
its up trendline
SP500
Review:
• Still into a major advance
• Short term side swing ranges
from 2,134 and 2,050
• Trendline reached = may need
to make a major decision soon
and as such provides some risk
of a possible support break
• Sp500 and Nasdaq are stronger
options than the Dow Jones
(which sports a short term
reactive channel)
External Factors: China
Shanghai index still show tenderness & volatility despite rescue
attempts by all the kings horses and all the kings men
China’s Shanghai Index Review:
• A major correction proceeds
(despite the recent rally)
• Recent support was seen
between its Fibonacci zones of
3,615-3,246
• Govt intervention will continue
to generate wide volatility
• Momentum readings still
forewarn of downward
extensions – may even retest
recent lows if not slightly more
(3,415-3,246)
External Factors: The US Dollar
Dollar keeps upward bias… but new range may be expected
US Dollar Index
Review:
• Up Trend intact (small range)
• 2nd Qtr rush bared overbought
levels that needed a correction
(Fibonacci 38.2%)
• Now ranged within 98.50 – 94.00
and may stay ranged despite
Yuan Devaluation
• Hold stipulated but watch stops:
– Short term stop at 96.00
– Medium term stop at 94.00-93.15
External Factors: Yuan Devalues
Chinese Yuan (6.39) breaks over its 6.28 resistance after almost a
two year consolidation
China’s Yuan
Review:
• Sharp devaluation with holding
power at present levels = strong
momentum
• But price is now overbought and
may need a brief pattern or
reaction to fix
• Eyes on Target:
• Measured range of 6.49
(6.28-6.07 = 0.21 + 6.28 = 6.49)
External Factors: Peso Devalues
Philippine Peso (P46.35)breaks over its P45.00 resistance after a
lengthy consolidation
Philippine Peso
Review:
• Devaluation trend resurfaces
but prices have reached near
overbought levels that may park
prices momentarily
• Targets:
• Channel high 46.20 (hit)
• Measured range of 47.18
(45.40-43.22 = 2.18 + 45.00 = 47.18)
• Short term:
– Take some profits close to 47-47.18
– Buy Dollar into reactions
(support is closer to 46 to 45.84)
External Factors: Impact of Commods
Oil & Metal prices crushed by the Dollar’s rally / China’s slow down;
weekly oversold levels flag possible short term rallies
Oil Gold Copper
Note: Certain stocks may show sensitivity to these fallouts

SUMMARY:
• After its recent reaction, the PSEi still tries to establish a foothold
– If 7,272 holds, possible counter rally into a wide pattern (rest of 2015)
– If it breaks, C-wave reaction may extend to 7,050- 6,950
• Watch out for possible undercurrents:
– US Markets near support & impending Rate hike
– China’s slippery slope & Yuan extended devaluation
– Continuing volatility in currencies and commodities
• Take into defensive buying
– Buy gradually after pullbacks towards next support zones
– Avoid buying into technical rallies – use these moments to lighten and
raise some cash until we pull out of down trends
– Allow about 2 months of corrective adjustments/consolidation time may
be necessary to fully ‘reset’ to major support & to scope up better buys
Thank You!
JUAN G. BARREDO
CHIEF TECHNICAL ANALYST
COL FINANCIAL GROUP INC
juanis.barredo@colfinancial.com

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Philippine Market:

PSEi (7-yr view) Long Term View:

PSEi slides below its 17-month Up Trendline, reactive trend proceeds

Scenario # 1 Support Holds

Scenario # 2 Support Fails

If prices break 7,272-7,239,a “C” wave extension will ensue

MSCI Phils “EPHE” (6-months)

Major Support Test 2015

Commercials Financials Mining/Oil

COL’s Technical Guide shows 82.04% of its monitored stocks to be

• The PSEi currently drives a major support challenge and

Note: Certain stocks may show sensitivity to these fallouts

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