THE LOCAL stock market is expected to trade with a downward bias this week in the absence of fresh catalysts to counter technically bearish indicators.
Last week, the main-share Philippine Stock Exchange firmed up by 48.39 points, or 0.6 percent, to close at 7,763.21, wiping out most of the gains that brought the index to as high as 7,919.21 in the first two trading days.
“Chartwise, the recent rally experienced by the market seems to be a mere technical rebound,” said Banco de Oro Unibank chief strategist Jonathan Ravelas.
“The index seems to be targeting the 7,500 levels in the coming weeks,” he added.
Local stock brokerage AB Capital Securities said that, despite a two-day rise at the start of last week, the stock market index proved to be bearish in the days that followed. It attributed the decline in the last few days to negative US macroeconomic news.
The brokerage also noted that investors had also turned defensive and pulled out of risky assets following comments from US Federal Reserve chair Janet Yellen that equity valuations were high.
Citing certain indicators, AB Capital suggested that the overall trend was still downwards.
“We remain bearish in the near-term—with resistance levels seen at the 32- and 65-day SMA (simple moving average) of 7,910 and 7840, respectively,” it said. Doris Dumlao-Abadilla