Let me start by saying that this is not a professional advice, but rather, my observations and what I think will happen on this week’s hottest stock in the Philippine Stock Exchange. I maybe right, or wrong on what I know. In this blog post, I will share with you my strategy on how to trade MerryMart.
DISCLAIMER: I sold some MM shares on the way up and bought MM shares on the way down to have a lower average price per share. My current average price per share is close to 3 pesos/share.
Why I Bought $MM Stock
While people rely on FUNDAMENTAL analysis and TECHNICAL analysis, I didn’t buy MM for any of those reasons. Technical analysis won’t apply since its IPO is very recent and if based on FUNDAMENTAL analysis, we all know it is already expensive at 1 PESO/share. I bought $MM out of speculation. The word SPECULATION itself will tell you that there is no guaranteed income here. What I bought here is the fact that history can repeat itself. We all know that Double Dragon stock rose from 2 pesos to the moon price of as high as 80 pesos. That is 3900% from its IPO price. For me, this is a matter of RISK vs REWARD RATIO. 10% risk vs 50%, 100% or maybe higher. It is that simple. If we believe that history can repeat itself, then we should believe that MM stock can also be a multi-bagger since it is also owned by Injap Sia, same guy who owns Mang Inasal and Double Dragon. The bet is that Injap Sia can deliver the same stellar performace. And on its first 3 days, we already saw that right? From 1 Peso to 2.25. My bet is on its IPO price is a clear win.
How to Trade MerryMart?
Now, not everybody was able to buy at its IPO price. In fact, many of you probably bought it above 2.25 Pesos. It was so hard to buy MM at 1.5 and 2.25 because everyone is trying to get in. My best bet is that most of you have an average price close to 3 pesos. In this case, you are still a winner because $MM price is currently trading close to 3.5 pesos per share. The next step for you is to make sure you have a stop loss to ensure that you can lock in your gains. Personally, I set my stop loss at 3.3 to avoid being easily shaken out of the market. If my stop loss is hit, I will be able to lock in around 10% to 15% profit then I might buy some if technical reading starts to improve.
If you haven’t bought $MM yet, you may start by betting 20% to 25% of your portfolio and make sure to have a stop loss of 10% utmost. No need to do some analysis paralysis because trading this is mostly based on speculation. If 4.5 is taken out, that’s the time that you may add some more. We call this BOBO (buy on break out) strategy. We love BOBO strategy because it simply suggest that the we just pierced a heavy resistance and that there is not much resistance ahead of us.
- The strategy is not based on FUNDAMENTAL or TECHNICAL analysis
- This strategy is based on SPECULATION, which means HIGH RISK is involved.
- To minimize risk, a maximum -10% stop should be in place (for new entry)
- If your price is close to 3 pesos, set a stop loss at around 3.3 pesos to lock in +10% gain
- If you haven’t bought yet, buy around 3.5 or lower then set your stop-loss limit to max of -10% from your buy price. If your bet is wrong, you can simply sell your shares and try again with another stock.