The local stock barometer is seen retesting the 7,200 levels in the short run on upbeat Philippine growth prospects for the second quarter and favorable offshore data even as it is increasingly becoming prone to profit-taking.
Ahead of a long weekend break, the Philippine Stock Exchange index (PSEi) last week added 124.58 points or 1.78 percent to close at 7,133.09 on Friday.
The market resumes trading Tuesday, the first trading day after the so-called “ghost month.” Financial markets were closed Monday as the country celebrated National Heroes Day.
AB Capital Securities analyst Alexander Adrian Tiu said that amid the bullish economic prospects for the Philippines and the United States, the recent local second-quarter earnings season was a mixed bag with several consumer stocks such as Puregold and Alliance Global Group failing to meet analyst expectations.
“Given this, we expect the local bourse to normalize in the coming weeks as the earnings season effect wanes,” he said.
Catalyst for this week would include the release of Philippine second-quarter GDP (gross domestic product) growth results on Thursday, Tiu said.
“On a technical basis, the index recently broke out from its resistance at 7,000 points, with near-term upside at 7,200. Despite the bullish optimism in the short-term, we express caution on a possible pullback near the 7,000 support level if it fails to breach the aforementioned resistance,” Tiu said.
“Given this, investors are advised to prudently take profits and cautiously accumulate at more bargain prices,” he said. Doris C. Dumlao