Santa Claus rally seen this week | Inquirer Business

Santa Claus rally seen this week

Experts, analysts expect stock market to revisit 8,400 levels
By: - Business Features Editor / @philbizwatcher
/ 05:03 AM December 11, 2017

Local stocks are seen riding on a Santa Claus rally this week as investors look forward to the passage of the Philippine tax reform program and take position for the coming new year.

Last week, the main-share Philippine Stock Exchange index (PSEi) racked up a total of 160.68 points or about 2 percent to end on Friday at 8,304.70.

The Bicameral Conference Committee is expected to finalize the Tax Reform for Acceleration and Inclusion Act (Train).

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The Senate version of TRAIN provides additional revenue-generating measures that are not in the House version, but both versions provide for tax exemptions for those earning P250,000 and below.

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Joseph Roxas, president of stock brokerage Eagle Equities Inc., said the PSEi would likely continue its upswing this week.
“The Train will be passed and there was panic when there was breakdown below 8,200. That was a bear trap,” Roxas said.

A bear trap is a false signal that the rising trend of a stock or index has reversed when it has not. A bear trap prompts traders to sell stocks but instead of declining further, prices stabilize or even slightly recover.

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Roxas said the PSEi might attempt to revisit the 8,400 levels this week.

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BDO Unibank chief strategist Jonathan Ravelas said the PSEi rebounded last week as investors hunted for bargains when the market took a beating during the period.

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“Chartwise, the week’s close of 8,304.70 highlights some buying support that emerged near the 8,050 to 8,100 levels,” Ravelas said.

“With Friday’s closing above the 8,300 levels, the market is poised to try the 8,400 to 8,500 levels,” he added.

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Ravelas sees the PSEi’s immediate support and resistance levels at 8,150 and 8,500 levels, respectively.

Finance Secretary Carlos Dominguez III said the government was now one big step closer to reforming the country’s tax system for the first time in over two decades–and providing a steady revenue stream to its ambitious infrastructure buildup–with the looming enactment of Train.

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Dominquez said the primary beneficiaries would be 99 percent of the country’s taxpayers who were to get higher take-home pay as a result of substantial cuts in their personal income tax rates or–better yet–outright exemption from income taxation.

TAGS: Business, Local Stocks, Santa Claus, tax reform

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