MANILA, Philippines–Local stocks are seen trading with caution this week as investors await more clues on the timing of future US interest rate increases.
Last week, the main-share Philippine Stock Exchange index (PSEi) shed 51.79 points, or 0.66 percent, to close at 7,809.54 on Friday as lofty valuations lured some investors to lock up gains.
Local stockbrokerage AB Capital Securities said the index had tried to retest the previous resistance level at 7,862—the index peak so far—in the week but profit taking brought it down near the 7,800 psychological support level. It said technical indicators continued to show that the index was near overbought levels.
Similar to last week, AB Capital said the PSEi’s key resistance for the index could be found at 7,862-7,865 this week. A breach above this level could pave the way to more record highs towards 7,900 points, it said.
On the other hand, support levels are seen at 7,760 and 7,650.
Outlook for this week was slightly bearish, AB Capital said, with a potential downside of up to 7,530 if the index would fail to breach current resistance levels. “As such, investors are advised to slowly take profits with dips on support levels seen as possible accumulation points,” it said.
To date, investors are turning jittery over the US Federal Reserve’s interest rates move, which some feared might come in earlier than expected especially after last week’s release of favorable jobs data in the United States.–Doris C. Dumlao