PH stock consolidation seen to continue

Local stocks are seen to consolidate this week after the profit-taking seen in the previous week.

The main-share Philippine Stock Exchange index slumped 2.62 percent last week to finish at 6,654.66 on Friday.

Banco de Oro Unibank chief strategist Jonathan Ravelas said the market posted its second straight week of decline as investors capitalized on recent gains ahead of the Holy Week.

“Chartwise, the week’s close at 6,654.60 continues to highlight that a near-term correction is in the works,” Ravelas said. “A further break below the 6,650 levels will put the 6,000-6,250 levels at risk.”

But if the 6,650 level would hold, Ravelas said the market would likely retest the 6,800 levels.

Freya May Natividad, an analyst at 2TradeAsia.com, said Standard & Poor’s warning of possible capital reversal in case advanced economies signal solid economic recovery dented sentiment last week.

She said local barometers might go on “stabilization mode” in the coming weeks following the latest correction. This pattern should be maintained within the 6,600-6,650 range to support the PSEi’s ascending channel, she said.

If the 6,600 immediate support would be broken, some traders might reassess their views on market trend.

Natividad said it would be best to trade within a range and spot for large-cap followers or the so-called second-liners that have good leads to unlock, such as those in mining/oil, financial, infrastructure and utilities counters.

Resistance is seen at 6,700 to 6,750.—Doris C. Dumlao