Ramon Ang-led San Miguel Corporation (SMC) has been trading within a tight range after its secondary offering which brought its share price from around Php 150.00 to as low as Php 105.70.
Notice, however, how its 260-day moving average (blue line) was able to catch it and keep it from falling further. Still, SMC has remained within Php 120.oo and Php 130.00 since the start of July. In any case, it seems that something is brewing for SMC at least on paper given its recent big time corporate actions and plans like its acquisition of Exxon Mobil’s oil refinery and gas stations in Malaysia, proposed IPO of its power unit, unsolicited bids for the government’s PPP, and the like. By September 12, 2011, SMC will also be included in the Philippine Stock Exchange Index (PSEi) or the Philippine Composite Index’s (PCOMP) composition. Based on my estimate, SMC will have a weight of about 5% in the index. This will at least induce some buying activity for the funds that track the index which could in a way push its price higher.
Technically, SMC could bounce soon as it is presently sitting right on its 260-day moving average. It could continue to trade in a sideways fashion. However, if SMC passes the Php 130.00 level, it could then aim for Php 150.00. A fall below Php 120.00, on the other hand, could bring it back to around Php 110.00.
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