Contents:
- Our Strictly Technical Approach
- TRFM’s Fundamental Valuation as a Benchmark
- Coincidental Alignment: Php 68.00 and Php 67.31
- Executing Our Trading Plan
- Key Takeaways
- Final Thought
At Micro Stock Trader, we strictly adhere to technical analysis as the core of our trading strategy, and this approach remains unchanged as we continue to test and refine our Modified 10-Step Trading Plan. Interestingly, during Week 3 of our testing period, we observed a notable coincidence: the technical stop-loss level we identified near Php 68.00 closely aligns with the fundamental valuation level of Php 67.31, as presented by The Retail Fund Manager (TRFM) in his analysis of URC, based on available 3rd Quarter 2024 data.
- The Modified 10-Step Trading Plan: Enhancing Risk Management and Flexibility
- Week 3 Trading Update: Detailed Assessment and Outlook
- Trading Journal Review: January 14, 2025 – Lessons Learned from a Tough Market Day
Part of our scenario for Week 3 is the Breakdown Below Php77.07: We said that: "If the price breaks below support, it could retest the Php73.80 level. A breakdown below Php73.80 would invalidate the bullish outlook and require a defensive strategy."
While our focus remains entirely on technical analysis, we found it noteworthy that a purely technical level coincides with a fundamental valuation from an independent source. This alignment provides an interesting benchmark but does not influence our decision-making process.
Independent methods, coincidentally aligned: Fundamental and technical analyses point to the same trading scenario.
Our Strictly Technical Approach
In our Modified 10-Step Trading Plan, we set a technical stop-loss slightly below Php 68.00 based on:
- Key support levels observed on the daily chart and 5-minute chart.
- The objective of cutting losses before a deeper decline during high-volatility sessions.
This level was identified solely through price action and market behavior—hallmarks of technical analysis. It just so happened that TRFM’s Php 67.31 valuation, derived from fundamental analysis, aligned closely with our stop-loss level, creating a coincidental but interesting point of reference.
TRFM’s Fundamental Valuation as a Benchmark
For context, TRFM provides the following fundamental valuation scenarios for URC based ending 3Q2024 results:
- Php 74.10 for a flat growth scenario: URC’s fair value assuming modest growth.
- Php 67.31 for a scenario indicating company weakness: A more conservative outlook based on weaker performance.
- Php 60.00 something as the bargain price: A deeply discounted price indicating significant undervaluation.
We introduced TRFM’s valuation purely for benchmarking purposes. It provides an external perspective on what the stock might be worth based on fundamental factors. However, we do not incorporate fundamental analysis into our trading strategy, nor does it affect our technical decision-making.
- URC (Universal Robina Corporation) Stock CRASHED and Will CRASH DEEPER? BUY The Dip NOW? by The Retail Fund Manager PH Channel, YouTube, https://youtu.be/G7tXQ477zHY?si=gijeabQrHKVKfkts
Coincidental Alignment: Php 68.00 and Php 67.31
Despite our adherence to technical analysis, the coincidence between our technical stop-loss level near Php 68.00 and TRFM’s fundamental valuation of Php 67.31 is noteworthy for two reasons:
Reinforces Our Confidence:
Even though our stop-loss was derived purely from technical signals, its alignment with a fundamental valuation adds an extra layer of confidence that we are managing risk effectively.Provides an Interesting Benchmark:
While we remain technical traders, it’s useful to know that an independent fundamental valuation aligns with our technical analysis at a key level. This information, though not actionable for us, offers a broader context for our trades.
Executing Our Trading Plan
To test our strategy this week, we strictly adhered to our technical rules—entirely independent of any influence from fundamental analysis—and aimed to assess whether we could achieve a successful outcome despite heightened market volatility. Our approach was guided by the following rules:
Hard Stop-Loss at Php 67.75:
We set a hard stop-loss just below our technical support level of Php 68.00 to avoid endlessly adjusting it downward during a potential decline.Profit Target at Php 73.50:
Our profit target was set at Php 73.50, a level identified through technical resistance analysis.
Key Takeaways
Strictly Technical Approach:
Our stop-loss and profit targets were derived entirely from technical analysis. The coincidence with TRFM’s fundamental valuation was purely incidental and did not influence our trading decisions.Benchmarking Without Integration:
TRFM’s valuation serves as an external benchmark for comparison, but it does not form part of our strategy. We remain committed to technical analysis as the core of our approach.Discipline in Execution:
By sticking to our hard stop-loss and profit target, we avoided emotional trading and ensured that our decisions were guided by predefined technical rules.
Final Thought
While we maintain a strictly technical trading strategy, recognizing external benchmarks can provide useful context. The coincidence between our technical stop-loss level of just below Php 68.00 and TRFM’s fundamental valuation of Php 67.31 was an interesting point of reference, but it did not affect our trading plan. We continue to focus on technical analysis, price action, and disciplined execution to guide our trades.
If you're interested in following our journey as we refine our trading strategy, stay tuned for more updates as we approach the end of Week 3!
Would you like to see additional analysis based on this week’s market activity? Let us know!
Disclaimer: This post is for informational purposes only and should not be considered financial advice. Always do your own research before making any trading decisions.
Related Readings
Micro Stock Trader: Week 2 Trading Update: Detailed Assessment and Outlook
Micro Stock Trader: My Stock Trading Plan: Inspired by Oliver Velez’s 8-Step Strategy
Micro Stock Trader Portfolio Tracker Page
Micro Stock Trader: Revealed: Our Top 3 Shariah-Compliant Stocks for a Winning Portfolio
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