Aboitiz Equity Ventures or AEV in the Philippine Stock Exchange helped carry the entire exchange with a timely gain (supported by volume) when it rose by 11.11% to close the week at PHP 37.00 from Thursday’s closing of PHP 33.30. As you can see from its chart above, AEV has been slumping for awhile as it has been trading within a descending channel since marking a high of PHP 41.00 back in December 3, 2010. Increased buying interest due to a reason that I will explain shortly caused it to make a bullish breakaway gap.
Friday’s move immediately placed AEV above the channel and the two (red and pink) moving averages. AEV even reached a high of PHP 38.5 during the day but quick profit taking pushed it back down towards the resistance of the channel. The said resistance and the two mentioned moving averages now should act as supports to prevent it from filling the gap. Looking at the MACD, you will notice that it is ripe for a bullish crossover as well (histogram about to turn positive). Moreover, an RSI reading of above between 50 and 70 (increasing upward momentum but still not overbought) indicates that AEV still has room to move higher.In any case, a rebound from the said supports could push AEV back to its previous high at PHP 41.00.
News that AEV will be included in the MSCI (Morgan Stanley Capital International) Philippines Investable Market Index on February 28, 2011 led traders and other investors to take a long position on the stock. MSCI Philippines is a benchmark that measures the performance of the top 99% by market capitalization of equities that are listed in the Philippine Stock Exchange. Inclusion of AEV in the index fund is bullish for the stock since international funds that track the index will then need to take a position on AEV as well.
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