Local stocks are seen entering a consolidation phase this week as investors have run out of incentives to load up after digesting the first-quarter earnings reporting season and a backdrop of sluggish external markets.
Last week, the main-share Philippine Stock Exchange index dipped 0.15 percent, or about 11 points, to close at 7,268.91 on Friday.
“The market looks like it will consolidate this week but will have a downward bias,” said PNB Securities deputy chief Manuel Lisbona. “Participants have become very sensitive to bearish external factors, using these as an excuse to lock in profits.”
Lisbona said the PSEi would likely find support at the 7,150 level.
Freya May Natividad, an analyst at 2TradeAsia.com, said macroeconomic incentives were still in place as the general consensus was growing in favor of monetary stimulus plans, given the “budding” improvement in economic indicators for large economies like the United States and Europe.
“While overseas leads might highlight sentiment for now, the PSEi might consolidate short term, possibly within 7,200-7,300,” Natividad said.
Some technical indicators signaled a continuation of profit-taking, although this trend might be seized by long-term traders accumulating for top bets, she said.
Immediate support is seen at 7,200 and resistance at 7,300-7,350.—Doris C. Dumlao