Stock in Focus: MINERALES INDUSTRIAS CORPORATION (October 2,2009)

(This analysis is for October 5 - 9, 2009)

BUSINESS PROFILE

Formerly Multitech Investments Corporation, Minerales Industrias Corporation (MIC) was originally incorporated on August 31, 1995 as a diversified holding company under the name Armstrong Holdings Corporation. On September 24, 2007, the Securities and Exchange Commission approved the change in the company's name to its present one, and the change in its primary purpose to become a mining company.

As of December 31, 2008, MIC's sole investment was in marketable securities of 350,737 shares in Suntrust Home Developers, Inc. (SUN). MIC has yet to implement its fund raising program through a one-for-one rights offering, to pursue the acquisition of suitable mining tenements.

Source: SEC Form 17-A (2008)

Reference: http://www.pse.com.ph/

Analysis:

(Note: double click image to enlarge)

MIC has closed below its Short time moving average.
Short time moving average is currently above mid-time, and above long time moving averages. The relationship between price and moving averages is: neutral in short-term, and bullish in mid-long term.

Average range of MIC for the past 2 weeks is 0.29. It is currently on consolidation stage with an upward trend strength of about 34.59. Last Fridays volume for MIC is 753,000 which is below its average volume for the past 10 days of 1,102,600.

MIC has closed above bottom band by 13.6%. Bollinger Bands are 26.5% wider than normal.
The current width of the bands (alone) does not suggest anything conclusive about the future volatility or movement of prices.

50 Day Historical Volatility (preferably greater than 40%): 70%

6/100 Historical Volatility (preferably less than 50%): 48%

Support / Resistance:

(Note: double click image to enlarge)

MIC current correction is -56%. Its nearest major Fibonacci support line is at 3.96, while its nearest Fibonacci resistance line is at 4.25. MIC upward trend strength can be concluded base from Fibonacci lines that it is somewhat weak. It is below its critical support line which is at 4.25.

Now base from the S & R , major support line of MIC is at 3.75.

Base from the weekly pivot point analysis of MIC.
This are the primary support lines of MIC this week: 4.17, 3.88, and 3.42
While its primary resistance lines for this week are: 4.92, 5.38, and

Buy / Sell:

(Note: double click image to enlarge)

MIC's momentum for the past 12 days is somewhat bearish with a strength of -0.017 indicating that it is still on the consolidation stage.

RSI reading for the past two weeks 38.56. The last signal was a sell 11 days ago. The RSI has set a new 20-day low while the security price has not. This is a bearish divergence.

Williams %R reading is -80 (10 days). It is just at the immediate boundary of triggering the buy signal. But even so just wait for this line to totally cross this -80 to make this more significant as a buy signal.

Currently the MACD is bearish since it is trading below its signal line.
The MACD crossed below its signal line 6 days ago. Since the MACD crossed its moving average, MIC's price has decreased -10.870% and has ranged from a high of 4.850 to a low of 3.850. There have been no divergence signals within the last 5 days.

Recommendation: BUY

This is a buy based from its current correction. For me, this stock is almost done correcting base from the status of our buy/signal indicators. This can be also check base from its current trend strength. It strength is weakening indicating that the current correction is about to end soon. New trend can be started to be seen when ADX is near 20. As long as there is no moving average crossover for our signals (10-day MA and 30-day EMA) then this is still good. But be careful as always to set your stop loss. Always wait for a confirmation signal to enter the market before placing your trade.