by Aurelio Peña
CHRISTMAS ISN’T something to crow about if you’re someone who hates Christmas parties with the same monotonous menu of spaghetti, stale chicken, warm coke, drunks and fake smiles.
It’s supposed to be a season of love and time of remembering the birth of our Lord Jesus Christ whose own birthday is drowned by images of Santa Claus, fake trees with colorful lights, plastic star lamps, midnight sales and new things to wear.
For thick-skinned and hairy-nosed stock traders, it’s even worse because they couldn’t care less about the season except to wait for something in the stock market called “Santa Claus Rally” which is a rebound in stock prices after long weeks of aimlessly drifting around or wallowing in bloody-red oversold prices.
Right now while writing this piece, many stocks are beginning to wake up, but the strongest so far are two stocks— SMC (San Miguel Corp) and PCOR (Petron Corp) whose prices are galloping at a faster pace. The stock charts of both companies show their prices steadily climbing, not too steeply (which is good) backed up by rising volumes.
Last week’s business news said that SMC president Ramon Ang wants to own as much as 90% of Petron to jump-start the diversification of the giant food firm into the oil refinery business. Fact is, even if SMC gets only 50.1% it could still get control of the Petron board, but Ang wants to be sure SMC takes total control of the multi-billion peso oil refinery business since Petron runs the largest oil refinery business.
It’s such a pity that even with the fat net profits of Petron, most investors are still wary of this company after many investors burned their fingers in its IPO (initial public offering) several years ago when the government drumbeat its road show all over the country. Investors’ losses in Petron’s shares of stock left deep wounds that refuse to heal.
Now we’re advising some of our potential investment clients to buy up big chunks of shares of Petron in the last two weeks of December even before the “Santa Claus” stock rally brings back stock buyers into the market after the holidays. One can safely guess SMC has ordered its stock brokers to accumulate as many shares of Petron they can lay their hands on.
Buying in January may be too late and prices too high, unless you just want to jump in during a sell-down and consolidation—which always happens to all stocks when traders take their profits.
But we advise clients to set an exit (selling) target of 20 to take profits, especially if they bought the stock at 12 or 13. If Petron shows more strength by its bigger volumes, they can ride the profits all the way up to 25 or more—but ready to jump off if the price starts to weaken.
And by the way, my stock trader friend Jamil of the website Pinoy Stock Trader (www.pinoy777.wordpress.com) told me that the third Stock Trading Seminar might be set around mid-January next year here in Davao City if enough people express interest to sign up (Jamil says they can text in their names)—especially from bank managers, lending firms and insurance companies.
(For comments, call 09084699301 or email: aurelio_pena@yahoo.com)
