Semirara Mining Corporation or SCC in the Philippine Stock Exchange is a subsidiary of DMCI Holdings, Inc. (DMC) which is majority owned by the Consunji family. The name “Semirara” was derived from Semirara Island where the company generates most of its revenue from. They are engaged in exploring, developing, and mining coal resources in the Island which can be found in the Visayan region of the Philippines. The Corporation also has a long term contract with National Power Corporation (NPC) to supply power for the power plants in Calaca, Batangas.
From my colleague’s last post on Semirara Mining last January (kindly check here), he mentioned that there is a cup and handle pattern and the stocks could move higher upon breakout. It did. However, as we take a look at its chart now, there could be a bearish divergence setting up. A bearish divergence forms when a financial instrument records a higher high and the MACD forms a lower high like what’s indicated in the image above. If it indeed is one, it could signal that the stocks are starting to lose its upward momentum which could eventually eventually trigger a break below the 9-month uptrend. In case it does, a significant support could be found at PHP191.30. If the stocks fall further below that level, the next support could be PHP180.00. Above all, you don’t have to worry – at least at the moment. As long as the 9-month uptrend remains intact, the bulls are still on its side. A rebound from its uptrend line could send it back its immediate resistance at PHP217.00; its all-time high. Even better, a move past above that could make way to PHP230.00.
At this time of uncertainty, I would rather keep my money here. A bearish divergence, like I said, could signal a possible turnaround in the stock but until does, I would still go long. That’s just me though. Remember that “a trend is your friend.” And scanning through all the local stocks, not one is still riding on a nice uptrend.