Cautious trading seen
CAUTIOUS trading is seen to persist at the stock market this week as all eyes are on the US Federal Reserve’s much-awaited policy meeting.
Although global markets have tempered expectations that the first US interest rate increase would be sanctioned this week, the uncertainties on the timing of such much-anticipated rate increases keep many investors on the sidelines.
Last week, the Philippine Stock Exchange index (PSEi) gave up 140.4 points or 1.99 percent to close at 6,911.38.
“Expect the market to range within the 6,800 to 7,200 levels in the week ahead,” said Banco de Oro Unibank chief strategist Jonathan Ravelas.
Ahead of the two-day Federal Open Market Committee meeting on Sept. 16 to 17, US stocks rallied on Friday, with the S&P 500 chalking up the biggest weekly gain in two months. If the US Fed will hold back from raising interest rates for the first time in a decade, US equities markets are seen to rally, although this will only prolong uncertainties in emerging markets.
“Corrective pressures are expected to persist this week as various technical indicators increase the bearishness on the PSEi’s short-term trend,” said Luis Gerardo Limlingan, managing director at Regina Capital Development Corp.
Article continues after this advertisement“Prices need to stage a bounce and overcome resistance at 7,110 to confirm its higher low pattern and set up for a reversal. Take note, however, that since our trend bias this week is bearish, the odds of prices moving lower during intraday is higher—and the lower the index goes, the harder it is to establish a support base.”
On the positive side, Limlingan said the index would likely see less volatile movements this week. Doris Dumlao-Abadilla
