MANILA, Philippines—The local stock market is seen susceptible to further profit-taking this week, especially if the support at 6,800 gives way.
Last week, the main-share Philippine Stock Exchange index (PSEi) hit a new high for 2014 during mid-week but fell by 29.55 points, or 0.43 percent, week on week to close on Friday at 6,817.71.
“Chart-wise, with the index managing to stay above 6,800, the near-term bias is for the index to retry the recent high of 6,906. A break below 6,800, however, could signal further losses toward 6,650-6,700,” said Jonathan Ravelas, chief stategist at Banco de Oro Unibank.
Joyce Anne Ramos, an analyst at AB Capital Securities, said last week’s pullback was likely due to weak first-quarter earnings results, hampered by mixed foreign economic data. “Chart-wise, the five-month upward trend channel remains intact,” said Ramos, noting that near-term technical indicators suggested that market weakness would persist.
“We place support levels at 6,740 and 6,700. We also advise investors to lighten their portfolios and accumulate near support levels,” she said.
Ramos said that among the key economic updates to be expected this week would be the European parliamentary elections and in the United States, its preliminary gross domestic product, core durable goods orders, unemployment rate and trade balance.
The analyst said earnings releases last week had been mixed, with the banking sector posting weaker earnings performance amid lower trading gains while conglomerates similarly showed a slowdown in earnings.—Doris C. Dumlao