THE LOCAL stock market is seen consolidating this week while awaiting fresh catalysts such as leads from the corporate earnings reporting season.
Last week, the Philippine Stock Exchange index (PSEi) lost 115.52 points or 1.5 percent to close at 7,550 on Friday.
Luis Gerardo Limlingan, managing director at Regina Capital Development Corp., said some accumulation might be done this week as the higher intra-day lows seen in the market would give some foothold against corrections.
“But it should also be noted that since technical indicators are neutral with a slight bearish bias, expect selling pressure at range resistance (7,660), which could cause prices to consolidate further,” Limlingan said. “A breakout above 7,660 is crucial for a bullish reversal.”
Limlingan said it was also important for the index to hold its ground above 260-day moving average. Otherwise, he said corrections toward the support level of 7,276 could occur.
“Buying strategy is the same as last week, which is to accumulate shares holding above their 200-day moving or historical support, provided that no bearish divergences are spotted,” Limlingan said. “Keep a close eye on earnings reports and inflation, which is highly possible to be less than June’s 1.2 percent,” he said.
Jonathan Ravelas, chief strategist at Banco de Oro Unibank, said the inability to stay above 7,600 in the month of July would cast a shadow of doubt on the market’s sustainable rise. Doris Dumlao-Abadilla