Stocks seen to rise

THE LOCAL stock market is seen testing key resistance levels this week after getting assurance last week of a gradual rise in US interest rates.

The Philippine Stock Exchange index (PSEi) gained 1.3 percent last week to close at 7,601.17 on Friday.

Local stockbrokerage AB Capital Securities said the outlook for this week remained neutral as the index tries to retest the resistance at 7,650. “A failure to breach the mentioned resistance level opens the index to further downsides at its initial and secondary support at 7,500 and 7,400, respectively,” AB Capital said. “As such, investors are advised to lighten equity exposure if the index fails to sustain its momentum.”

Jonathan Ravelas, chief strategist at BDO Unibank, said he expected the PSEi retesting the 7,800 level this week. Support was at 7500, he noted.

AB Capital noted that last week, the market ended with mixed sentiment, with the financial, industrial and hold firms sectors outpacing property, services and mining stocks.

This week, the stockbrokerage said investors would still likely look into the Greece debt crisis for direction.

“Currently, there are thousands rallying outside the parliament in central Athens to urge the government to reach an agreement with its creditors and prevent it from exiting the euro. We view this as a slightly favorable news as this may pressure Greek Prime Minister Tsipras to accept the austerity measures,” AB Capital said.

The brokerage noted that local investors picked up bargain stocks last week, allowing the main index to rebound despite consecutive days of net foreign selling.

“Technicals, however, still remain bearish with resistance seen at 7,650-7,670 points or the baseline of the head-and-shoulders pattern. Other technical indicators are showing diverging signals with stochastics showing that the index is near overbought levels while RSI (relative strength index) points to further upside,” AB Capital said. Doris Dumlao-Abadilla