As if to show the market’s advances last week were solid and for real, the market did not just break out from the 6,500 resistance level, it also showed some strength to break into the portals of 6,600. This also enabled the market to end the week—for the first time since January—with a three-digit weekly gain of 201.58 points or 3.17 percent.
On closer look, however, the market’s attempts to advance to higher grounds last week still bore signs of latent weakness: It continued to experience technical resistance. For instance, selloffs were triggered when the market hit new highs last Thursday and Friday. These selloffs also made the market close lower for the day, either at session’s low or just above it.
Not just that, while the market was having a higher open daily, trading was at the same time ending at lower lows—a quizzical situation making the market’s advances look somewhat fragile.
Behind the advances
Looking at previous data, the market’s first attempt to challenge the 6,500 level occurred between the first and second week of March. The first attempt was on March 6. The market had the same open and low for the day of 6,487.94, a high of 6,502.33 and a close of 6,516.82.
As could be interpreted, the market immediately proceeded to advance higher after opening and hit the high of 6,520.33.
Thereafter, the market lost steam from selloffs, which were not necessarily due to profit-taking but, more possibly, by cautiousness developed by the market following its disappointing yearend performance in 2013.
The second attempt happened the following week. On Monday, March 10, the market opened at 6,480.33, down 1.5 points from the previous day’s close. But due to the fantastic market rally the market had in February—that precisely emboldened the market to challenge the 6,500—the market managed to advance and hit the high of 6,501.16. Drawn between cautiousness and bullishness, the market first dipped to the low of 6,476.91 before it recovered to close and end for the day at 6,487.23.
On March 11, the market opened slightly lower at 6,485.52. Again, this was due more to cautiousness than anything else. The market, however, was able to hit a higher high at 6,535.98, on account of the market’s new bullish inclinations. Thus, bulls (buyers) overcame bears (sellers) during the day. The market was able to rebound 44.06 points up from the low of 6,485.52 to close at 6,529.58.
On March 12, the market made its last attempt to break out from 6,500. It opened slightly lower at 6,524.67.
As it happened, the market had an identical high and open for the day. This meant that after it opened, the market headed downhill. Sharing an identical low and close for the day at 6,462.47, this only meant the market indeed tanked all the way down.
Looking back, the market’s hunt met this kind of dismal end because no additional developments came up to bolster it other than the fantastic performance in February. It was not until last week that new leads provided the market renewed vigor to challenge the 6,500 level again.
On April 1, the market opened at 6,429.56. It proceeded to hit the session’s high of 6,514.72. With the familiar pattern of first heading lower but closing higher by the end of the day, the market dropped to a low of 6,423.90 before it bounced back to close at the session’s high of 6,514.72. The following day, the market managed to open higher at 6,515.72. It also proceeded to hit a new high at 6,602.83. But still ailed by the same type of cautiousness, the market closed lower at 6,587.72. It was the same story on Thursday.
Interestingly, the market may have topped out or reached equilibrium point when it closed at identical levels last Wednesday and Thursday.
Interestingly, too, while the market opened higher on Friday at 6,607.06 and aggressively hit a new high at 6,626.01, it succumbed to selling pressure to close at the day’s low of 6,561.20.
Bottom line spin
Following the market’s performance in its attempts to break out from 6,500 and higher, the market indeed continues to appear as somewhat still fragile.
But looking at the universe of stocks that performed last week, a contrary picture unfolds. Long overlooked and laggard stocks started to catch up and traded actively alongside actively traded stocks. These were SM Investments Corp. (SM), SM Prime Holdings Inc. (SMPH), D&L Industries Inc. (DNL), Energy Development Corp. (EDC) and San Miguel Corp. (SMC), to mention some significant stocks.
Even supposedly overbought (overpriced) stocks or those already trading beyond their 52-week highs like Universal Robina Corp. (URC) and Megaworld Corp. (MEG) showed no signs of stopping to trade strongly.
Notwithstanding all these developments last week, regular market value turnover has yet to materially increase. If this does not happen soon, I’m afraid the market will remain as something still fragile.
(The writer is a licensed stockbroker of Eagle Equities, Inc.. You may reach the Market Rider at marketrider@inquirer.com.ph , densomera@msn.com or at www.kapitaltek.com