Stocks seen to rise
Local stocks may continue trading with an upward bias this week ahead of the release of latest domestic economic growth numbers and the upcoming corporate earnings reporting season, stock experts said.
Last week, the Philippine Stock Exchange index (PSEi) advanced by 3.41 percent or 204.41 points to end on Friday at 6,191.50.
“From the market’s behavior last Friday, it seems that there is still some bullish pressure to push the market upwards perhaps to around 6,300 in the coming sessions,” said Manuel Lisbona, deputy chief at PNB Securities.
The 6,000 level, previously a stubborn resistance level, is now seen the support for the market.
Abbygayle Estrella, an analyst at AB Capital Securities, said that on a technical perspective, the PSEi has reached “overbought” levels but noted that buying momentum was at its strongest for the past three months.
Aside from breaking its immediate resistance, she noted that the main index was also trading above the 50-day exponential moving average.
Estrella said that for this week “the strong momentum will still be in favor of the PSEi but it also faces the next psychological resistance at 6,270 that was last visited on Dec. 2.”
“The best case scenario of claiming both stronger-than-expected GDP (gross domestic product) and better leads abroad could spring the PSEi to 6,400,” she said.
The government is set to release the fourth-quarter and full-year economic performance report on Thursday, before the market pauses for a long weekend break. Friday (Jan. 31) is a nonworking holiday in celebration of the Lunar New Year turnover.
“We advise investors to take advantage of pullbacks to enter positions. The new found support on 6,000 should entice bargain- hunters back to play,” Estrella said.
Jonathan Ravelas, chief strategist at Banco de Oro Unibank, said “cautious optimism” must be exercised this week as the Federal Open Market Committee meets on Jan. 28-29 to decide on whether further cuts to the monetary stimulus will be done.
“Chartwise, the index managed to break above a couple of resistance levels—6,000 and 6,170—highlighting that market momentum is strong,” he said.
“A break above 6,270 could signal further tests toward 6,350,” he said.
This week’s Fed meeting, the first for the year, will also be the last where Ben Bernanke will preside. Janet Yellen is set to take over his post.
As the Philippines releases its latest GDP growth numbers, AB Capital’s Estrella said investors would finally find out whether Supertyphoon “Yolanda” had dented the country’s seven quarters of above 7-percent GDP growth. Doris C. Dumlao
