While Space Shuttle Discovery made its last voyage to to space just a couple of days ago, another launch occurred this morning in the Philippines. This morning’s massive launch, however, came in the form of Aboitiz Equity Ventures or AEV in the Philippine Stock Exchange. AEV’s price canvas above shows you what exactly I’m talking about. Since peaking at PHP 41.50 last December 2010, AEV had been on a steady decline as it had been trading within a descending channel before it made a bullish breakaway gap to finally break above the said channel last February 12. Back then, I mentioned that sch move could be seen as a sign of good things to come. However, AEV just moved in a sideways fashion after gapping up until earlier today when it literally skyrocketed by a monstrous 17.50% to close at PHP 47.00 from an opening of PHP 40.20. Not only that, today’s move was also accompanied by a huge buying that I haven’t seen for quite a long time. Imagine, the total value traded today for AEV reached PHP 3,888,484,220. Moreover, closing at its high and making a bullish morubozu candle formation in the process also suggests that there could still be some upside in this stock.
So what caused AEV to perform very well in this kind of market?
Last February 12 (kindly see my previous post here), I mentioned that Aboitiz Equity Ventures would be included in the MSCI Philippines Index on February 28, 2011 which is today. Again, MSCI Philippines is a benchmark that measures the performance of the top 99% by market capitalization of equities that are listed in the Philippine Stock Exchange. I added that inclusion of AEV in the index was and is bullish for the stock since international funds that track the it would then need to buy AEV. And this was what exactly happened earlier today.
So looking closer in today’s AEV trading, I found out that the top three buyers of AEV were Philippine Equity Partners (bought 43,592,700 shares at an average price of PHP 44.7952), ATR Securities Philippines (bought 23,785,400 shares at an average price of PHP 44.7610), and DBP-Daiwa Philippines (bought 9,651,300 shares at an average price of PHP 45.5227). Among the top three buyers, the average price (weighted) where AEV was bought was at PHP 44.8758. This simply means that the investors and/or traders who bought AEV today got in at about that price. Therefore, today’s closing of PHP 47.00 only gives them about 4.73% gain. And given the sheer amount of volume amounting to more PHP 3 billion, it’s highly unlikely that these buyers would dispose of their long positions soon. This then would make their average entry price of PHP44.8758 a considerable support.
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