Technical signs point to PSEI moving higher

Investors were advised to be cautious this week despite technical signals pointing to the benchmark Philippine Stock Exchange index (PSEi) gaining further.

Jonathan Ravelas, BDO Unibank Inc. chief strategist, said there were indicators that the PSEi, which ended the week at 7,064.33, would make another attempt toward 7,300.

“However, failure to clear or test 7,300 levels the could signal a retest of the 6,900/7,000 levels,” Ravelas warned.

The PSEi was down about 1.2 percent for the week as a previous rally attempt failed and as investors were spooked by volatility in overseas markets.

“This caused some profit-taking and was further aggravated by the selloff in Wall Street, which sent investors’ sentiment to the floor. However, some bargain hunting toward the end of the trading week boosted the market back above the 7,000 levels,” Ravelas noted.

He earlier explained that one driver supporting the case for higher domestic valuations were better-than-expected corporate earnings. So far, large-cap firms that have discussed their third-quarter figures included SM Prime Holdings Inc. and Universal Robina Corp.

A big equity offering is also on tap as San Miguel Food and Beverage is preparing to launch the local leg of its almost P40 billion in secondary share sale.