Local stocks are seen continuing to trade with an upside bias this week on improved foreign investor sentiment and optimism on corporate earnings.
Last week, the Philippine Stock Exchange index (PSEi) surged 194.7 points or 3.18 percent to close at 6,308.36 on Friday. It rallied for most of the week but gave up 44.4 points on Friday.
“Chartwise, the week’s close above 6,300 continues to support further upticks toward the 6,500 levels in the near term,” said Banco de Oro Unibank chief strategist Jonathan Ravelas.
He said immediate support and resistance were at the 6,150 and 6,350, respectively.
Joyce Anne Ramos, analyst at AB Capital Securities, said the market might trade sideways with an upward bias this week as favorable corporate earnings could continue to influence market movement. Investors must view price dips to support levels as an opportunity to accumulate, she said.
“PSEi has benefited from investor excitement on corporate earnings report. However, while we acknowledge that this may continue to boost the market in the coming days, we believe that this may not be enough to continuously push the market up given the economic turmoils in the US and other Asian neighbors,” Ramos said.
“From a technical perspective, PSEi’s failure to sustain its five-day rally is an expected but natural healthy fall,” she said.
AB Capital Securities sees the PSEi revisiting its support level at 6,270 wherein a breakdown may cause a further decline to 6,225 and 6,180. Resistance levels, on the other hand, are seen at 6,390 and 6,420.
Ramos said that among the US data to look at this week include the consumer confidence survey, new home sales, core durable goods orders, preliminary gross domestic product result (quarter-on-quarter) and pending home sales. Doris C. Dumlao