Contents:
- Introduction
- Key Learnings from the Stock Price Review
- Tactical Trade Execution
- Final Reflections: What This Trade Taught Us
Introduction
Stock trading is a continuous learning process, and our latest execution on Manila Electric Company (MER) – Trade No. 3/20 and 4/20 reflects key insights gained from our Stock Price Review dated February 11, 2025. By applying our Hybrid 10-Step Trading Strategy, we assessed whether MER was positioned for a buy, sell, or hold decision before executing our tactical trades at ₱485.00 on February 11, 2025, and ₱492.60 on February 12, 2025. This post explores how our Stock Price Review findings influenced our trade decision, ensuring a data-driven and disciplined execution.
Manila Electric Company (MER) Trade Execution – Learning from Stock Price Review for Tactical Decisions
Key Learnings from the Stock Price Review: MER Trade No. 3/20
1. Market State & Trend Context Confirmed a Bullish Structure
Our Stock Price Review established that the 20-MA (₱481.38) was above the 200-MA (₱428.53), reinforcing the overall uptrend structure. The current price was trading above both moving averages, maintaining a bullish context.
Impact on our trade: This supported holding MER, but we closely monitored signs of resistance and weakening momentum.
2. Price Position & Retracement Zones Were a Key Consideration
MER had retraced from its high of ₱503.50 down to ₱448.00, marking a 72% pullback. The price range of ₱478.53 - ₱489.63 was identified as the Power Move Sweet Spot, presenting an ideal buying zone.
Impact on our trade: We remained patient within this range but executed a sell at ₱485.00 as volume failed to strengthen, signaling a potential risk.
3. Volume Analysis Indicated Weak Momentum
Volume was considerably weak at 103.66K compared to the 65-day volume average of 228.03K. A target breakout volume of 410K was needed for strong confirmation.
Impact on our trade: The failure to meet breakout volume led us to exit at ₱485.00 to manage downside risk while considering potential re-entry points.
4. Tactical Position Adjustments Influenced Risk Management
Our position size was adjusted according to market conditions. Initially, we held 50% allocation, ensuring controlled risk exposure within our planned trade execution levels.
Impact on our trade: We exited 50% of our position on February 11 at ₱485.00 to mitigate further risk.
5. Candlestick Signals or Lack Thereof Justified the Trade
The stock lacked strong bullish confirmation, with no significant power bars or color change signals appearing on the daily chart.
Impact on our trade: The absence of a decisive breakout candle reinforced our decision to lock in gains and secure our capital for potential re-entry at lower levels.
Tactical Trade Execution: SELL at ₱485.00
Following the insights from our Stock Price Review, we executed a sell action aligned with our technical assessment and risk management strategy:
Stock: Manila Electric Company (MER)
Trade No. 3/20
Date: February 11, 2025
Action: SELL
Number of Shares: 10
Price: ₱485.00
Net Gain/Loss Since Inception: -₱21.61
Total Shares Held After Trade: 10
Position Size: 50%
Key Learnings from the MER Stock Price Review: MER Trade No. 4/20
1. Market State & Trend Context Confirmed Uptrend
Our stock review established that MER was trading above both the 20-day and 200-day moving averages at ₱485.00, confirming a bullish structure. However, despite this, our Trade No. 4/20 was a SELL, which may seem counterintuitive. The key factor? Resistance at ₱490-₱500 remained a significant hurdle, and price struggled to break higher.
How This Influenced Our Trade:
- Instead of buying into the resistance, we decided to sell near the upper range of the power move sweet spot at ₱492.60, locking in profits rather than risking a potential pullback.
2. The Pullback Sweet Spot Was a Double-Edged Sword
The stock price had retraced 72% from its previous high of ₱503.50, reaching the ideal buy zone (₱478.53 - ₱489.63). This suggested that buyers could step in at these levels for a potential rebound.
How This Influenced Our Trade:
- While this zone signaled a possible buy opportunity, the review also highlighted a lack of volume confirmation, meaning breakout potential was weak.
- Given the uncertainty, we opted to exit our position at ₱492.60, taking advantage of the price recovery without committing to further upside risk.
3. Volume Analysis Indicated Weak Breakout Potential
One of the most critical findings from our Stock Price Review was that MER’s volume was significantly below breakout levels:
- Closing volume: 103.66K, much lower than the target breakout volume of 410K.
- 30-day & 65-day volume averages: 220.94K and 228.03K, meaning MER was trading at nearly half its normal volume.
How This Influenced Our Trade:
- A successful breakout above ₱490.00 required strong volume, which was absent.
- Selling at ₱492.60 allowed us to exit before potential low-volume price rejection, preventing unnecessary downside exposure.
4. Tactical Position Adjustments Confirmed the Need to Reduce Risk
Our review recommended a controlled position-sizing strategy, advising:
- Buying only within the ₱478.53 - ₱485.00 range and adding only if MER broke ₱490.00 with volume.
How This Influenced Our Trade:
- Since volume failed to confirm a breakout, we avoided increasing our position and instead exited fully at ₱492.60, bringing our position size to 0%.
5. Lack of Strong Candlestick Signals Justified a Cautious Exit
Our Stock Price Review noted that:
- No power bars or breakout signals were present.
- No strong color change signals indicated a clear trend continuation.
How This Influenced Our Trade:
- Without bullish confirmation, our best move was to secure profits and step aside rather than hope for an uncertain rally.
Tactical Trade Execution: SELL at ₱492.60
Trade Summary
- Stock: Manila Electric Company (MER)
- Trade No.: 4/20
- Date: February 12, 2025
- Action: SELL
- Number of Shares: 10
- Price: ₱492.60
- Net Gain/Loss Since Inception: ₱122.37
- Total Shares Held After Trade: 0
- Position Size (% of Allocation): 0%
Final Reflections: What This Trade Taught Us
Our Trade No. 3/20 and 4/20 were direct responses to the lessons from our Stock Price Review:
✅ We respected resistance and sold near key levels.
✅ We prioritized volume confirmation and exited when it was weak.
✅ We managed risk by locking in gains rather than chasing uncertain upside.
✅ We avoided counter-trend trading, as no major reversal signals were present.
Going forward, we will continue monitoring volume conditions before considering a re-entry into MER.
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: Comparing the Modified 10-Step Trading Strategy vs. Retracement Trading Strategy
- Micro Stock Trader Portfolio Tracker Page
