Evaluating the URC Trading Strategy: Week 2 Performance Review Using the 8-Step Approach
As Week 2 concludes, it's time to assess the accuracy of our scenario modeling and update our expectations for the upcoming week. Our goal throughout Week 2 was to monitor key support and resistance levels, manage risk effectively, and remain prepared for a potential breakout. Here’s a detailed summary of how our scenario played out and what we can expect moving forward.
Final Week 2 Assessment (January 6–10, 2025)
Key Observations from Week 2 Trading
Consolidation Below Resistance:
The price consolidated between Php77.07 (support) and Php80.70 (resistance) throughout the week. Despite multiple tests of the resistance level, the price failed to break above Php80.70, signaling persistent selling pressure at higher levels.Support Held Strong:
The demand zone around Php77.07 was tested multiple times, particularly on January 8 and 9, with lows of Php77.35 and Php76.40, respectively. Each time, the price rebounded, confirming this level as a reliable support zone.Volume Remained Low:
Volume was relatively low compared to previous periods of high volatility. This lack of significant volume contributed to the market’s inability to push through resistance, resulting in continued consolidation.Stop-Loss Not Breached:
Our stop-loss at Php75.85 remained intact throughout the week. The lowest price recorded was Php76.40, ensuring that the position was never at risk of being stopped out.
Comparison with Week 2 Scenario
Our Week 2 scenario accurately projected key technical levels and market behavior. Here's how the actual outcome compared with our expectations:
| Aspect | Scenario Expectation | Actual Outcome | Accuracy |
| Demand Zone Support (Php77) | Price expected to find support here | Price repeatedly tested and rebounded from Php77 | High |
| Resistance (Php80.70) | Anticipated breakout above resistance | Resistance was tested but not breached | Moderate to High |
| Stop-Loss (Php75.85) | No breach expected | Stop-loss was not breached | High |
| Breakout Timing | Expected within Week 2 | Breakout has not yet occurred | Moderate |
Overall Accuracy Rating: 8.5/10
Strengths:
Accurate identification of key support and resistance levels.
Effective stop-loss placement, ensuring risk was managed without prematurely exiting the position.
Correct anticipation of a consolidation phase between Php77.07 and Php80.70.
Areas for Improvement:
Breakout timing was overly optimistic. The breakout did not occur within Week 2 due to insufficient volume and market hesitation.
Greater emphasis on volume as a breakout indicator could improve future timing accuracy.
Updated Breakout Expectations for Week 3
Given the current consolidation pattern and low volume, we are revising our breakout expectation to occur within Week 3, specifically between January 15 to 21, 2025. Here’s what we’re watching:
Key Resistance Level: Php80.70
A breakout above Php80.70 remains critical. For confirmation, we need a strong daily close above this level with significant volume.
Volume Increase
A noticeable increase in volume will be a key indicator of renewed buying interest. Without this, the price may continue to consolidate or even retrace toward support.
Support Levels
The demand zone at Php77.07 remains a reliable support. As long as the price holds above this level, our bullish outlook remains valid.
Stop-Loss
Our stop-loss at Php75.85 remains unchanged. This level ensures that we limit downside risk while allowing the trade enough room to develop.
Next Steps
Continue holding the current position at 40% allocation.
Monitor for a breakout above Php80.70. If confirmed with strong volume, we will consider adding back to our position in line with our 1/3 Zone Action strategy.
Maintain the stop-loss at Php75.85 to protect against downside risk.
Prepare for profit-taking at key levels in the upper zones:
Php85.00 (1/3 Zone)
Php95.00 (2/3 Zone)
Php104.40 (3/3 Zone)
Conclusion
Week 2 provided valuable insights into market behavior, confirming the accuracy of our key level predictions while highlighting the need for flexibility in breakout timing. As we move into Week 3, our focus remains on monitoring the resistance level at Php80.70, managing risk effectively, and staying prepared for a potential breakout.
We will continue to keep you updated on further developments as they unfold. Stay tuned for our next post!
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
