BETA Portfolio Rebalancing: February 2025 Strategy Amid PSEi Bear Market

Contents:

• Introduction

• PSEi Market Situationer: February 2025 Outlook

• Current BETA Portfolio Analysis

• Recommended Adjustments for February 2025

• Final Portfolio Strategy for February 2025

Introduction

The Philippine Stock Exchange Index (PSEi) has officially entered bear market territory, declining by 22.4% from its recent high of 7,554 in October. This downturn is attributed to disappointing macroeconomic data and a major index rebalancing, leaving investors searching for catalysts to revive the market.

In light of these developments, it's crucial to reassess our BETA Portfolio to ensure it remains resilient and well-positioned for future market recoveries. Our strategy this month focuses on optimizing growth stock allocations, adjusting REIT positions, and maintaining defensive dividend stocks.

Optimizing the BETA Portfolio amid PSEi market downturn

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PSEi Market Situationer: February 2025 Outlook

As of January 31, 2025, the PSEi closed at 5,862.59, marking its lowest level in over two years. This decline reflects the impact of a slowing economy, persistent inflation, and recent storms. Jonathan Ravelas, senior adviser at Reyes Tacandong & Co., noted, "We were affected by sticky inflation, the impact of the storms and there appears to be no clear positive support for growth in 2025, except for the infrastructure spending of the government."

The recent index rebalancing, which saw the inclusion of China Banking Corp. and AREIT Inc., also contributed to market volatility. AP Securities Inc. research head Alfred Benjamin Garcia explained that the combined free-float weighted market capitalization of these new entries required adjustments across all index stocks.

Given these factors, opportunities will be selective. It's essential to focus on growth stocks demonstrating technical resilience, defensive dividend stocks for stability, and maintaining liquidity to capitalize on potential bullish reversals.

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Current BETA Portfolio Analysis

Our BETA Portfolio is currently 98% invested, with only 2% held in cash, limiting our flexibility for opportunistic trades. The current allocations are:

• Growth Stocks: 32% – Positioned for long-term appreciation but lacking confirmed breakouts.

• REITs: 39% – Providing passive income but overweighted in a market where capital appreciation is uncertain.

• Dividend Stocks: 27% – Defensive holdings offering stability amid PSEi volatility.

To optimize risk exposure, increase liquidity, and reallocate capital to high-conviction trades, we recommend the following adjustments.

• Micro Stock Trader: BETA Tracker Update - January 31, 2025

DDMPR January 21, 2025, Chart Evaluation Using the Hybrid 10-Step Strategy

Contents:

• Overview of DDMPR’s Market Context

• Chart Evaluation Using the Hybrid 10-Step Strategy

• Final Thoughts

Overview of DDMPR’s Market Context

DDMP REIT Inc. (DDMPR) closed at ₱1.06 on January 21, 2025, with a -2.75% decline from the previous session. The day’s high was ₱1.08, and the low was ₱1.05, aligning closely with key moving averages. Volume stood at 3.022 million, indicating moderate trading interest.

A critical factor in today’s market action is the ex-dividend date of DDMPR. Historically, REITs tend to decline after the ex-date as investors adjust for the dividend payout. Let’s analyze this chart using our Hybrid 10-Step Trading Strategy to assess its potential movement.

DDMPR’s January 21, 2025, stock chart showing key technical levels post-ex-dividend.

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Step 1: Identifying Market State & Trend Context

• 200-day MA (₱1.09): The price is still below the long-term moving average, indicating an overall downtrend.
• 20-day MA (₱1.05): The stock has been consolidating around this short-term support level.
• Trend Context: After a prolonged sideways phase, the stock has been attempting a short-term recovery but faces resistance near the 200-day MA.

📌 Conclusion: DDMPR is in an early trend reversal attempt but still struggling to break key resistances.

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Step 2: Assessing Price Position Relative to Key Levels

• The closing price (₱1.06) is above the 20-day MA (₱1.05) but below the 200-day MA (₱1.09).
• A successful break and close above ₱1.09 could confirm a potential reversal.

📌 Conclusion: Caution is needed, as failure to hold above ₱1.05 could signal a pullback.

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Step 3: Power Bars & Retracement Strength

• The recent bullish push showed higher-than-average volume, but today’s red candle signals profit-taking.
• The current retracement is moderate, suggesting this could be a temporary pullback.

📌 Conclusion: Watch for a green power bar in the next few sessions for confirmation.

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Step 4: Entry Confirmation Using Technical Alignment

• The ideal entry would be near the ₱1.05 support zone with a confirmation signal (e.g., bounce with strong volume).
• Breakout Entry: A close above ₱1.09 could confirm bullish momentum.

📌 Conclusion: No clear entry signal yet, but potential setups exist if it holds above ₱1.05.

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Step 5: Tactical Stop-Loss Adjustments

• A logical stop-loss would be below ₱1.03 (recent swing low).
• If it breaks below ₱1.05 decisively, a deeper correction may follow.

📌 Conclusion: Risk management is crucial—tight stops recommended below ₱1.03.

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Step 6: Color Change as Secondary Confirmation

• The price needs a green candle tomorrow to confirm strength.
• If the next session turns red, it may indicate further weakness.

📌 Conclusion: A color change to green at this level would be a bullish signal.

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Step 7: Profit-Taking Strategy

• If entered at ₱1.05, potential profit-taking zones:
  • Partial Exit at ₱1.10 (above 200-day MA resistance and adjusted for transaction cost)
  • Full Exit at ₱1.15 (previous resistance)

📌 Conclusion: Short-term traders may consider scaling out if price struggles at ₱1.10.

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Step 8: Re-Entry at Secondary Pullbacks

• Best re-entry: If price pulls back near ₱1.03-₱1.05 and holds.
• Aggressive traders could attempt a momentum breakout trade if it surges past ₱1.09.

📌 Conclusion: Monitor for re-entry opportunities around ₱1.05.

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Step 9: Tactical Position Management

• Shallow retracement (₱1.05-₱1.06) → Can consider larger positions.
• Deeper retracement (₱1.03) → Smaller position with tight stop.

📌 Conclusion: Size positions accordingly based on retracement depth.

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Step 10: Counter-Trend Trading Considerations

• If the price fails to hold ₱1.05, a counter-trend short may be possible down to ₱1.00.
• However, trading against a REIT’s support levels can be risky.

📌 Conclusion: Avoid counter-trend shorts unless a major breakdown occurs.

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Trading Plan

• Entry: Near ₱1.05 (if it holds)

• Stop-Loss: Below ₱1.03

• Targets: ₱1.10 (partial), ₱1.15 (full)

• Position Allocation: 10,000 shares total (4,000 for Core Position, 6,000 for Tactical Actions)

• Transaction Size: Minimum of 2,000 shares per trade

• Core Position Entry:

• Entry Price: Php 1.05 
• No. of Shares: 4,000
• Gross Amount: Php 4,200.00
• Transaction Cost: Php 12.39
• Net Amount: Php 4,212.39

• Core Position Exit - Breakeven:
• Exit Price: Php 1.07
• No. of Shares: 4,000.00
• Gross Amount:  Php 4,280.00
• Transaction Cost: 
• Net Amount: Php 4,241.69
• Realized Gain: Php 29.30
• Core Position Partial Exit:
• Exit Price: Php 1.10
• No. of Shares: 2,000.00
• Gross Amount:  Php 2,200.00
• Transaction Cost: Php 19.69
• Net Amount: Php 2,180.31
• Partial Profit: Php 74.00
• Core Position Full Exit:
• Exit Price: Php 1.15
• No. of Shares: 2,000.00
• Gross Amount:  Php 2,300.00
• Transaction Cost: Php 20.58
• Net Amount: Php 2,279.42
• Partial Profit: Php 173.00
• Total Gain: Php 247.00 (5.87%)