Stock In Focus: LT Group Inc. (LTG)

Philippine Stock Exchange Index (PSEi) as of 13 November 2015 is in negative territory.  In a daily chart, the last traded price as of 13 Nov 2015 is 6897.77 which is bearish as per ichimoku elements.  The next support level is near 6862.

In weekly chart, trend strength is down and weak. The next support level may be near 6882.

The surprise GDP growth and earnings could reverse PSEi.

On LT Group, Inc. (LTG), the company reported on November 13, 2015 as per PSE disclosure that its attributable net income for the first nine months of 2015 reached P4.71B, 88% more than 9M14’s Php2.50 billion. This is the reason the price action jumped on November 11, 2015, from opening at 12.6 and closed at 13.88, two days prior to the earnings announcement.

Will the price action continue to move upward?

The chart has spoken in a bullish candle but in a weekly chart, it forms a descending triangle which is building a downward momentum if this “form” is valid.

Investopedia defines descending triangle as “a bearish chart pattern used in technical analysis that is created by drawing one trendline that connects a series of lower highs and a second trendline that has historically proven to be a strong level of support.”  

LTG 13 Nov

 Two scenarios here:

  1.  Traders will continue to take profit after the earnings announcement since they had bought the stocks 2 days prior  to earnings announcement. The overall market sentiment due to  bearish index may drag the stock.

If this is the case, traders watch the move below support at 12.

  2.   The investors may anticipate on the future earnings growth in the full year 2015.

Long term prospect may be good and breakout of the resistance at 13.88, 14 and 14.48 is possible as the last                 candle in a weekly chart is bullish.

Which of the two scenarios is likely to happen?

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