BDO Unibank Analysis: Is the Downtrend More Likely to Continue? (2024)

BDO Unibank, Inc. (BDO) closed on July 29, 2020, Wednesday, at ₱90.50 per share. It went up by 1.74 percent. Local and foreign investors registered a total turnover value of nearly ₱159 million, with the former as the leading traders of BDO today.

Foreign investors printed a Net Foreign Selling worth nearly ₱58 million today. They remain net sellers year to date. Of the 140 trading days since the start of 2020, only less than 30 trading days registered a Net Foreign Buying. Knowing that foreign investors have a significant stake in BDO and knowing their disinterest in this stock at the moment, it explains why this banking company has been trading inside the downtrend channel since the start of this year.

The bearishness of BDO has nothing to do with a volume-related issue. I see no issue on volume because it consistently registers a higher volume than the 50 percent of BDO’s 10-day volume average daily.

Foreign investors gave their support when BDO pierced the resistance at ₱109. Unfortunately, it was a short-lived bullishness. The immediate support I see is near ₱85.00, while the immediate resistance is pegged near ₱98.50.

BDO remains a low-risk stock for me because of its historical volatility score of nearly 36 percent. However, having a low-risk level doesn’t automatically mean it’s logical to buy the stock regardless of its prevailing trend. The risk level I’m citing here refers to the erraticity of the price’s fluctuation. When I say the stock has a low-risk level, that means the stock does not register frequent and wide gaps between daily candlesticks. You’ll understand me more when you watch my Evergreen Strategy in Trading and Investing in the Philippine Stock Market (online stock market course). All of those who availed of the stock market consultancy service of Equilyst Analytics has access to this online stock market course.

The bearishness of BDO is affirmed by the growing bearish divergence between the -DMI and +DMI. Also, the ADX at nearly 28 points seconds the motion to this interpretation.

Trade-Volume Distribution Analysis

Last Price: ₱90.50
VWAP: ₱89.62694
Dominant Range: ₱90.50 – ₱90.50

All four elements of my Momentum Power Indicator are bullish, but I don’t see a confirmed buy signal for BDO yet because its 10SMACD is still bearish.

The elements of my Momentum Power Indicator and 10SMACD are discussed in our online stock market course at Equilyst Analytics.

True Market Sentiment

True Market Sentiment: BEARISH
5 of the top 10 brokers registered a positive Net Amount
3 of the top 10 brokers registered a higher Buying Average than Selling Average
Top 10 Players’ Buying Average: ₱89.5720
Top 10 Players’ Selling Average: ₱89.8071

Bonus Info:
16 out of 55 participants or 29.09% of all participants registered a 100% BUYING activity
13 out of 55 participants or 23.64% of all participants registered a 100% SELLING activity

This bearish True Market Sentiment also affirms my bearish assessment for BDO. As you can see in the statistics I presented, the top 10 players’ selling average is higher than their buying average. Watch out for the activities of Credit Suisse Securities and Macquarie Securities tomorrow if pigging-backing brokers is your style. I don’t piggy-back brokers, however. I use their activities to get their overall sentiment.

Recommendations

Do you have BDO already?

You have two options.
Option 1: Hold your position if your trailing stop is still intact, and if you’re a high-risk investor or trader.
Option 2: Pre-empt your trailing stop if you’re a low-risk investor or trader.

This shouldn’t be rocket science to you if you know how to manage your risks. I discussed in the sixth lesson of our online stock market course how to sell more logically and less emotionally (risk management). If you’re one of our clients, go to the COURSE tab of your account and watch the Taglish or English version.

Do you plan to add BDO from your watchlist to your portfolio?

Don’t hurry. Now is not the logical time because there’s no confirmed buy signal yet. BDO’s Momentum Power Indicator is already bullish. You just need to wait for its 10SMACD to become bullish. If and when BDO breaks above ₱93.50, check it already has a bullish 10SMACD and if its Momentum Power Indicator remains bullish.

Compute for your reward-to-risk ratio once it has a confirmed buy signal. Buy your first tranche within the dominant range if you’re happy with the ratio. BDO, together with the 29 other blue-chip companies, is in our investment guide for long-term investors (for our clients only). You’ll see its dominant range in the INVESTORS tab of your account.

I uploaded my reward-to-risk ratio calculator, trailing stop calculator, and other calculators in the TOOLS tab of the online stock market library of Equilyst Analytics. Use them for free.

I don’t need to say this, but those who are not aware of this yet must understand that the stock market is not subject to following my data-driven forecast. The market can, at any time, contradict my interpretation. That’s not a problem as long as you’re using a trailing stop. Your trailing stop will preserve your capital, protect your gains, and prevent unbearable losses.

Consider the stock market consultancy service of Equilyst Analytics if you want me to teach you how to invest independently and trade tactically.

Is my analysis of BDO helpful? Please comment below and tell me what you like the most about my style.

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