Tuesday, February 11, 2025

Stock Price Review: Manila Electric Co. (MER) Daily Chart as of February 11, 2025 – Buy or Sell Decision Using the Hybrid 10-Step Strategy

Contents:

  • Introduction
  • Hybrid 10-Step Trading Strategy Review
  • Final Stock Recommendation
  • Next Steps

Introduction

Manila Electric Co. (MER), a key player in the Philippine power sector, is actively traded on the Philippine Stock Exchange (PSE). As of February 11, 2025, we analyze the stock using our Hybrid 10-Step Trading Strategy 3.0 to determine whether MER presents a buy, sell, or hold opportunity based on its technical setup.

TRADE DETAILS

  • Date: February 11, 2025
  • Stock: Manila Electric Co. (MER)
  • Exchange: Philippine Stock Exchange (PSE)
  • Timeframe: Daily
  • Pullback Under Consideration:
    • Start of Power Move Date: January 22, 2025
    • Start of Power Move (100% Pullback): ₱503.50
    • End of Power Move Date: January 31, 2025
    • End of Power Move (0% Pullback): ₱448.00
    • Power Move Trend: Bearish
    • Power Move Sweet Spot: ₱478.53 - ₱489.63
    • Pullback Level To Date: 72%
  • Volume Analysis as of February 11, 2025:
    • Closing Volume: 103.66K
    • 65-day volume average: 228.03K
    • 30-day volume average: 220.94K
    • Target Breakout Volume (65-day x 1.8 volume average): 410K

This stock price review follows our Hybrid 10-Step Trading Strategy 3.0 for a structured and data-driven assessment.

MER Stock price chart from the Philippine Stock Exchange (PSE) showing moving averages, volume analysis, and market trends for technical evaluation as of February 11, 2025.

MER Stock price chart displaying key technical indicators, including moving averages, volume trends, and price action patterns as of February 11, 2025.


Hybrid 10-Step Trading Strategy Review

Step 1: Identify Market State & Trend Context

  • The 20-MA (₱481.38) is above the 200-MA (₱428.53), confirming an uptrend.
  • The current price (₱485.00) is above both moving averages, maintaining a bullish market structure.
  • Verdict: BUY

Step 2: Price Position & Retracement Zones

  • The stock retraced from ₱503.50 to ₱448.00, indicating a strong pullback of 72%, entering a critical retracement zone.
  • The ideal buy zone is ₱478.53 - ₱489.63, where price is currently trading.
  • Verdict: BUY (Within the Power Move Sweet Spot)

Step 3: Power Bars, Breakout Signals & Volume Confirmation

  • The lack of power bars and low volume suggest that MER is consolidating.
  • Volume is weak (103.66K), failing to meet the breakout requirement of 410K.
  • Verdict: WAIT for volume confirmation before entering aggressively.

Step 4: Entry Confirmation Based on Technical Signals

  • No strong breakout signal yet.
  • A break above ₱490.00 with volume above 410K would confirm an upward continuation.
  • Verdict: BUY with caution; wait for stronger confirmation.

Step 5: Stop-Loss Positioning & Risk Management

  • Ideal stop-loss: Below ₱470.00 (recent support).
  • Aggressive stop-loss: Below ₱460.00 (deep retracement level).
  • Verdict: BUY only with a defined stop-loss below ₱470.00.

Step 6: Color Change Signals for Additional Confirmation

  • No major color change signals.
  • Price is consolidating, and momentum needs to shift.
  • Verdict: WAIT for a bullish confirmation candle.

Step 7: Profit-Taking Strategies with Tactical Exits

  • First target: ₱490.00 (previous resistance).
  • Second target: ₱500.00 (psychological resistance).
  • Third target: ₱510.00 (new highs).
  • Verdict: BUY with targets at ₱490.00-₱510.00.

Step 8: Potential Re-Entry Zones

  • First re-entry zone: ₱470.00 (50% retracement level).
  • Second re-entry zone: ₱460.00 (deep pullback).
  • Verdict: HOLD until re-entry at ₱470.00 or ₱460.00.

Step 9: Tactical Position Adjustments (Position Sizing Strategy)

  • Core Position: 50% entry size at ₱478.00-₱485.00.
  • Tactical Position: Add 10% if price breaks ₱490.00 with volume.
  • Verdict: BUY with controlled position sizing.

Step 10: Counter-Trend Trading Considerations

  • Not applicable as the stock is in an uptrend.
  • Verdict: No counter-trend trading required.

Final Stock Recommendation

Final Trade Recommendation: BUY (With Confirmation)

✅ Recommendation: Buy near ₱478.53 - ₱485.00 while within the Power Move Sweet Spot.
✅ Risk Management: Stop-loss below ₱470.00 to protect against downside risk.
✅ Profit-Taking Strategy: Target ₱490.00, ₱500.00, and ₱510.00 for gradual exits.
✅ Position Size Strategy: Start with a moderate position and add on breakout above ₱490.00 with volume.

Next Steps

🔹 Short-term traders → Wait for volume breakout above ₱490.00 before adding more shares.
🔹 Long-term investors → Buy within the sweet spot (₱478.53 - ₱489.63) for a strong risk-reward setup.
🔹 Existing holders → Hold with targets at ₱490.00, ₱500.00, and ₱510.00.
🚨 Final Thought: The pullback has reached 72%, making it an attractive buy if volume strengthens. Wait for confirmation. 🚨


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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Friday, February 7, 2025

Strategy for Those Accumulating MER Inside the 460–500 Consolidation Range & Why We Are Not Following It

Key Highlights of the Post:

🔹 Why some traders buy inside consolidation ranges.

🔹 The risks of accumulating before a confirmed breakout.

🔹 Why we follow a breakout strategy—waiting for price confirmation.

🔹 How to decide which strategy best suits your trading approach.

When a stock remains in a tight consolidation range, some traders and investors choose to accumulate shares at support levels in anticipation of a future breakout. In the case of Manila Electric Company (MER), the stock has been trading between 460 and 500 for months, leading some market participants to buy near the lower range (460–470) and sell near resistance (490–500).

While this range trading strategy can be effective for certain traders, we strictly follow a breakout trading approach, meaning we do not enter a position until MER decisively breaks above 500 with volume confirmation. In this post, we’ll discuss:

🔹 Why some traders prefer accumulating inside the range.
🔹 The risks of entering too early before a confirmed breakout.
🔹 Why we wait for a breakout before committing capital.

By understanding the differences between range accumulation vs. breakout trading, traders can better align their strategy with their risk tolerance and market approach.

Ambiance at the Micro Stock Trader place, highlighting the comparison between "Breakout Trading" and "Accumulation Inside the Range

Accumulation vs. Breakout Strategy – What’s the Best Approach for Micro Stock Trader BETA Portfolio


1. The Accumulation Strategy Inside the Range

Some traders and investors choose to accumulate shares while the stock is still trading within a consolidation range (460–500 for MER). This approach is commonly referred to as:

✅ Range Trading (Buying Near Support & Selling Near Resistance)

  • Traders buy at the lower boundary (460–470) and sell near the upper boundary (490–500).
  • This strategy works if the stock remains inside the range for an extended period.
  • Key Risk: If a stock breaks down below the lower range (460), range traders may get trapped in losing positions.

✅ Accumulation Before Breakout

  • Some investors accumulate shares in anticipation of a breakout, assuming institutional buying is happening inside the range.
  • These investors typically have a longer-term horizon and are willing to hold through volatility.

2. Why We Are Not Following This Accumulation Strategy

We are strictly following a Breakout Trading Strategy, meaning:

❌ No Entry Until a Confirmed Breakout

  • Price must clear 500 with volume confirmation before entry.
  • Buying inside the range means taking on risk without confirmation, which goes against the Hybrid 10-Step Trading Strategy.

❌ Avoiding False Signals & Range-Bound Movements

  • MER has failed multiple times to break 500, meaning buyers inside the range may face extended holding periods or capital stagnation.
  • We prioritize momentum trades, where we enter only when strong demand pushes price into a new uptrend.

❌ Risk Management & Efficiency

  • Buying inside the range requires setting a stop-loss below 460, which increases the risk of getting stopped out.
  • Our breakout approach minimizes unnecessary trades, ensuring we deploy capital efficiently only when a high-probability breakout occurs.

Final Takeaway: Breakout Trading vs. Accumulation Inside the Range

📌 Breakout Traders (Our Strategy) → Wait for price to break 500 with strong volume.

📌 Range Traders → Accumulate near 460–470 and sell at 490–500.

We avoid buying inside the range because we are not speculating on accumulation—we are waiting for confirmation of a strong move above 500 to enter with momentum and reduced downside risk. 🚀

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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Stock Price Review: Manila Electric Company (MER) Daily Chart as of February 6, 2025 – Is a Breakout Forming?

Contents:

  • Introduction
  • Technical Analysis: Price and Trend Overview
  • Volume Analysis: Institutional Interest or Just Noise?
  • Breakout Trading Strategy: What Really Matters?
  • Trading Recommendations Based on the Hybrid 10-Step Strategy
  • Final Thoughts

Introduction

Manila Electric Company (MER) closed at 488.60 on February 6, 2025, gaining +3.60 (+0.74%) for the day. While MER has been consolidating within the 460–500 range since December 2024, a recent increase in volume raises questions about whether a breakout is forming. This review will assess MER’s price action, volume trends, and breakout potential using our Hybrid 10-Step Trading Strategy.

A stock chart of Manila Electric Company (MER) showing technical indicators, price action, and moving averages.

MER Daily Chart Analysis – February 6, 2025

Technical Analysis: Price and Trend Overview

1. Current Price Action

  • MER closed at 488.60, up +0.74% for the day.
  • The short-term trend (20-MA at 481.15) is acting as immediate support.
  • The long-term trend (200-MA at 426.54) remains significantly lower, confirming a strong uptrend in the bigger picture.

2. Key Resistance and Consolidation

  • MER has been ranging between 460–500 since December 2024.
  • 500 remains the key breakout level, while 475–480 serves as near-term support.
  • Despite a recent rebound from lows, the price remains within the consolidation zone, meaning no confirmed breakout has occurred yet.

Volume Analysis: Institutional Interest or Just Noise?

Recent Volume Comparison

  • Closing Volume on February 6, 2025: 0.32M
  • 65-Day Volume Average (+20%) as of February 5, 2025: 0.27M
  • 30-Day Volume Average (+20%) as of February 5, 2025: 0.26M

The 0.32M volume is above historical averages, suggesting increased trading activity. However, higher volume alone does not confirm a breakout—price action must also validate the move.

Breakout Trading Strategy: What Really Matters?

A breakout strategy prioritizes price first, with volume acting as confirmation. Here’s how to analyze MER’s current setup:

  1. Breakout Occurs Only When Price Clears 500

    • Price must decisively break above 500 to confirm a bullish breakout.
    • Until then, MER is still inside the 460–500 consolidation range.

  2. Volume Confirms the Move

    • Ideal breakout volume should exceed 0.40M, significantly higher than today’s 0.32M.
    • If volume is low during a price breakout, it could be a false breakout, meaning the price could quickly reverse back inside the range.

  3. No Entry if Price is Not in the Sweet Spot

    • Even with higher volume, if the price is still below 500, the breakout is not valid.
    • Decision: WAIT for the price to break above 500 before considering an entry.

Trading Recommendations Based on the Hybrid 10-Step Strategy

🔹 Short-Term Traders (Swing & Momentum)

  • Wait for a confirmed breakout above 500 before entering.
  • If MER tests 490–500 with volume exceeding 0.35M, a breakout is more likely.
  • Support at 480–475 should hold; a breakdown below 475 could signal weakness.
  • Stop-loss at 475 for any short-term buy trades.

🔹 Long-Term Investors

  • MER is above both the 20-MA and 200-MA, confirming a long-term uptrend.
  • Best accumulation zone: 460–470, where price has found support multiple times.
  • Holding is recommended unless the stock breaks below 450, which could indicate a deeper correction.

🔹 Existing Holders

  • No immediate exit needed, but if volume weakens and MER fails to break 500, expect continued consolidation.
  • Consider partial profit-taking at 500–510, as this level has acted as resistance.
  • Use a trailing stop at 475–470 to protect gains.

Final Thoughts

MER is currently in a consolidation phase between 460 and 500, with a potential breakout forming. The increase in volume is encouraging, but price confirmation is still required before entering new positions.

🚨 Final Takeaway: Wait for MER to break 500 with volume exceeding 0.40M before confirming a breakout. No entry until price is in the sweet spot! 🚀


NOTES ON OUR BREAKOUT TRADING STRATEGY

How We Arrived at the 0.40M Volume Recommendation for MER’s Breakout Confirmation

The 0.40M volume threshold for confirming a breakout above 500.00 in MER was determined based on historical volume trends, breakout theory, and institutional activity requirements. Below is a breakdown of how we arrived at this figure.

1. Historical Volume Analysis

Volume Data as of February 6, 2025:

  • Closing Volume: 0.32M
  • 65-Day Volume Average (+20%): 0.27M
  • 30-Day Volume Average (+20%): 0.26M

💡 Interpretation:

  • The 0.32M volume on February 6, 2025, was above both the 30-day and 65-day volume averages, indicating increased trading activity.
  • However, it was not enough to push the price beyond the 500 resistance level, meaning more volume is needed for a confirmed breakout.

2. Breakout Volume Rule of Thumb

A valid breakout should have at least 1.5x to 2x the stock’s average volume, ensuring that the price movement is backed by strong institutional participation and not just retail trading.

🔹 Applying This to MER:

  • 65-Day Adjusted Average Volume: 0.27M
  • Target Volume for Breakout Confirmation:
    • 1.5x of 0.27M → 0.40M
    • 2.0x of 0.27M → 0.54M

Since MER is consolidating within 460–500 and has attempted to break out multiple times without success, the minimum volume threshold for a breakout should be 1.5x the adjusted 65-day average, which equates to 0.40M.

3. Institutional Accumulation Requirement

  • For large-cap stocks like MER, institutions (fund managers, investment firms, and big traders) tend to build positions gradually.
  • A sustained volume surge above 0.40M would indicate strong institutional interest, reinforcing that the breakout is not a false move.

4. Previous Failed Breakout Attempts

  • If past breakout attempts at 500 occurred with volume lower than 0.40M and failed, it confirms that higher volume is needed to sustain a move above 500.
  • MER’s previous range-bound trading suggests that resistance remains strong, requiring significantly higher participation to break through.

Conclusion: Why 0.40M is the Key Breakout Volume Threshold

  • It is 1.5x the 65-day volume average, aligning with breakout theory.
  • It is higher than previous failed breakout volumes, indicating institutional confirmation.
  • It ensures MER’s breakout above 500 is sustainable, avoiding false breakouts.

🚨 Final Takeaway: A breakout above 500 will require volume exceeding 0.40M to be considered valid. If volume remains below this level, the breakout is at risk of failing. 🚀

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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