Rebalancing Our URC Position: Preparing for the Breakout While Managing Risk

Adjusting Our Allocation to Manage Risk and Capitalize on Upcoming Market Opportunities

As part of our ongoing trading activities using the 8-Step Trading Strategy, we made a strategic decision today (January 10, 2025) to rebalance our URC position. This move involves reducing our allocation from 70% to 65%, with a target of 40% ahead of Week 3 under the right conditions to manage risk effectively while maintaining enough exposure to benefit from a potential breakout.

Why We’re Rebalancing

The decision to rebalance our URC position was driven by current market conditions. Over the past four trading days, the price has been consolidating between Php77.07 (support) and Php80.70 (resistance), showing signs of market indecision. While our 1/3 Zone Action strategy typically recommends adding to positions in this zone, the absence of a confirmed breakout above resistance prompted us to take a more cautious approach.

By initially reducing our allocation to 65%, with plans to further lower it to 40% under the right conditions, we achieve two key goals:

1. Risk Reduction: Lowering our exposure reduces the potential downside if the price fails to break above resistance and reverses further.

2. Capital Flexibility: Freeing up capital positions us to act decisively when a confirmed breakout above Php80.70 occurs, allowing us to add back to our position in line with the strategy.

Aligning with Our 8-Step Strategy

Although this move represents a slight deviation from the rule of adding in the 1/3 Zone, it remains consistent with the broader principles of the 8-Step Trading Strategy. Our focus on risk management and maintaining capital flexibility ensures that we stay prepared for future opportunities while protecting the portfolio from unnecessary risk.

Key points of alignment:

• Step 4: Entry — We will be ready to increase our allocation once the breakout is confirmed with strong volume.

• Step 5: Place a Stop-Loss — Our current stop-loss remains at Php75.85, ensuring downside protection for the remaining position.

• Step 7: Profit Take — If the breakout occurs, we will target profit-taking in the upper zones, specifically at Php85.00 (1/3 Zone), Php95.00 (2/3 Zone), and Php104.40 (3/3 Zone).

Preparing for the Breakout

Our analysis indicates that a potential breakout could occur within the next 3 to 5 trading days, provided certain conditions are met:

• The price must approach and close above Php80.70 with strong volume.

• Volume should increase significantly during the breakout, signaling renewed buying interest.

Until these conditions are met, we will hold our 65% position and adjust further as needed and continue to monitor the market closely. If the breakout materializes as expected, we will be prepared to add back to our position and capture the upward momentum.

Next Steps

1. Continue monitoring the price action near the resistance level of Php80.70.

2. Be ready to add back to our position upon confirmation of a breakout above resistance with strong volume.

3. Maintain our stop-loss at Php75.85 to protect against downside risk.

4. Target profit-taking at key levels as the price moves into the upper zones.

Conclusion

Rebalancing our URC position is a strategic move aimed at balancing risk and reward while staying prepared for a potential breakout. This adjustment ensures that we remain flexible, disciplined, and aligned with our overall trading strategy.

We will keep you updated on further developments as the market progresses. Stay tuned for our next update!

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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.

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Final Week 2 Assessment and Updated Breakout Expectations for Week 3

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.

URC daily chart as of January 10, 2025, showing price consolidation below Php80.70 resistance and support holding at Php77.07 to end Week 2 trading

Final Week 2 Assessment (January 6–10, 2025)

Key Observations from Week 2 Trading

1. 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.

2. 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.

3. 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.

4. 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:

1. 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.

2. 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.

3. 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.

4. 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

1. Continue holding the current position at 40% allocation.

2. 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.

3. Maintain the stop-loss at Php75.85 to protect against downside risk.

4. 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!

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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.

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Micro Stock Trader: Week 2 Trading Update: Detailed Assessment and Outlook

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Week 2 Trading Update: Detailed Assessment and Outlook

Evaluating the URC Trading Strategy: A Test of the 8-Step Approach

Introduction

In relation to Step 4: Entry and Step 6: Color Change of our 8-Step Trading Method, the 1/3s Approach offers a systematic way to manage positions after making an initial entry. Once we’ve entered at the optimal buy spot, as detailed in Step 4, our focus shifts to scaling into the trade within the 1/3 zone, where we anticipate strong trend continuation. We avoid adding in the 2/3 zone, where the market might encounter resistance or approach its peak. As the price reaches the 3/3 zone, we implement Step 7: Profit Take, gradually locking in gains and reducing exposure. This structured method allows us to capture the bulk of the trend while minimizing risk near potential reversal points.

As we near the end of Week 2 in our ongoing URC trading activity, it's time to assess how well our scenario modeling has performed and what we can expect on the final trading day, January 10, 2025. Below is a detailed breakdown of key observations and an updated outlook based on the past four trading days.

URC daily chart ending January 9, 2025, showing price recovery from demand zone after testing a low of Php76.40 and closing at Php79.15.

Week 2 scenario prepared on January 5, 2025, projecting demand zone support around Php77.07, resistance at Php80.70, and a potential breakout above resistance.

Overlay of actual URC price action for January 6–9, 2025, with the Week 2 scenario, highlighting how price movements respected the demand zone and resistance levels.

Summary of Week 2 Trading Activity (January 6–9, 2025)

Day 1: January 6, 2025

• Opening Price: Php79.80

• High: Php82.70

• Low: Php79.00

• Closing Price: Php82.40 (+3.26% from open)

The price made a strong upward move, testing a high of Php82.70, temporarily breaching our projected resistance at Php80.70, before closing near the top of the range. This signaled early bullish momentum, though the breakout was not sustained.

Day 2: January 7, 2025

• Opening Price: Php83.00

• High: Php83.95

• Low: Php79.80

• Closing Price: Php80.00 (-2.91% from open)

After opening higher and making a new weekly high at Php83.95, the price reversed sharply, closing below the resistance level at Php80.00. This reversal indicated that sellers were active near the highs, resulting in a bearish close.

Day 3: January 8, 2025

• Opening Price: Php80.00

• High: Php80.70

• Low: Php77.35

• Closing Price: Php77.65 (-2.94% from open)

The price attempted to break above Php80.70 but faced rejection. This led to a sharp sell-off, with the price testing the demand zone near Php77.07 before closing near the day's low. The day’s price action reflected strong selling pressure.

Day 4: January 9, 2025

• Opening Price: Php77.70

• High: Php79.15

• Low: Php76.40

• Closing Price: Php79.15 (+1.93% from open)

The price opened near the demand zone and tested a low of Php76.40, which remained above our stop-loss level of Php75.85. A recovery followed, with the price closing higher at Php79.15, confirming that buyers stepped in near support.

Assessment of Week 2 Scenario Modeling Skills

1. Demand Zone Accuracy:
   Our scenario correctly identified the demand zone around Php77.07, which was tested on multiple days. The price consistently found support above this level, confirming it as a key area where buyers are active.

   • Accuracy Rating: High

2. Resistance Level Testing:
   The projected resistance level at Php80.70 was tested multiple times but not breached on a sustained basis. While a breakout was anticipated, it has not yet occurred, highlighting the importance of this level.

   • Accuracy Rating: Moderate to High

3. Stop-Loss Placement:
   The stop-loss at Php75.85 was well-placed, allowing room for market fluctuations while protecting against major downside risk. The price remained above this level throughout the week, keeping the position intact.

   • Accuracy Rating: High

4. Breakout Timing:
   Our expectation of a breakout above Php80.70 early in the week was premature. While the resistance level was correctly identified, the timing of the breakout did not align with our forecast.

   • Accuracy Rating: Moderate

Expectations for Day 5 (January 10, 2025)

1. Key Levels to Watch:

   • Support: The demand zone around Php77.07 remains crucial. Continued buying interest near this level could provide a foundation for an upward move.

   • Resistance: The resistance at Php80.70 is still a significant barrier. A close above this level with strong volume would indicate a breakout and renewed bullish momentum.

2. Scenarios to Anticipate:

   • Bullish Scenario: If buying pressure continues and the price breaks above Php80.70, we may see a rally toward the next resistance at Php85.00. This would align with our initial scenario.

   • Neutral Scenario: The price could consolidate between Php77.00 and Php80.70, reflecting ongoing indecision in the market.

   • Bearish Scenario: If the price breaks below the demand zone and breaches the stop-loss at Php75.85, it would invalidate the bullish outlook and signal an exit from the position.

3. Action Plan:

   • Hold the current position as long as the price remains above the stop-loss level.

   • Monitor for a breakout above Php80.70. If confirmed, consider adding to the position in line with the original 1/3 Zone Action strategy.

   • Exit the position if the price breaches the stop-loss at Php75.85.

Conclusion

With four trading days completed, our Week 2 scenario modeling has proven effective in identifying key technical levels, particularly the demand zone and stop-loss level. While the anticipated breakout has not yet occurred, the price behavior has closely followed our expectations in terms of consolidation and respect for key levels. As we head into the final trading day of Week 2, disciplined monitoring of support and resistance will be crucial.

We will continue to hold the position, awaiting a potential breakout or further confirmation of market direction. Stay tuned for our next update as we conclude Week 2 of trading!

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Thank you for following our trading journey. As always, we at Micro Stock Trader are committed to sharing our insights and documenting our progress as we refine our strategies.

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 Portfolio Tracker Page

Micro Stock Trader: Revealed: Our Top 3 Shariah-Compliant Stocks for a Winning Portfolio

Micro Stock Trader: Investing in Semirara Mining and Power Corporation (SCC): What the Technical Indicators Are Telling Us

Micro Stock Trader: Investing in Monde Nissin Corporation (MONDE): What the Technical Indicators Are Telling Us

Micro Stock Trader: Investing in Premiere Island Power REIT Corporation (PREIT): What the Technical Indicators Are Telling Us

Micro Stock Trader: Investing in Asian Terminals Inc. (ATI): What the Technical Indicators Are Telling Us