In search for pretty-looking stocks, PSEi may retest 7,000
The stock barometer may test the 7,000 mark this week as investors pick up index stocks that have yet to benefit from the recent upswing, alongside end of the quarter window-dressing activities.
Last week, the Philippine Stock Exchange index (PSEi) gained 99.13 points, or 1.44 percent, to close at 6,950.51.
“I think the market will still be strong, especially because it will be the end of the month. We may see some window-dressing,” said Joseph Roxas, president of Eagle Equities Inc.
At the same time, Roxas said there were index stocks that could still be attractive to investors looking for laggard stocks. For instance, DMCI could still have an upside based on a dividend yield of about 7.5 percent even at current prices, he said.Other index stocks like SMC have also just started to move higher, he added.
Rachelle Cruz, head of research at AP Securities, said market sentiment remained cautious but still positive as the government anticipates the arrival of over 10 million COVID-19 vaccine doses in the coming month.
“Investors will also watch out for potential window-dressing activities as the second quarter of 2021 closes, as well as the government’s decision on quarantine restrictions by end-June,” Cruz said.
“Overall, we expect the PSEi to retest recent peak at 7,001 with next resistance levels at 7,159. Meanwhile, support is still pegged at the 6,700 levels,” she said.
Last week, Cruz noted that the main index consolidated near its recent peak as the Bangko Sentral ng Pilipinas, as expected, kept its interest rates steady. Market participants also factored in the decline in COVID-19 cases in the country, with seven-day average now running at 5,542 compared to the peak of 10,840 last April, Cruz added.
For BDO Unibank strategist Jonathan Ravelas, the PSEI’s sustained fall below 6,700 could signal a further pullback to the 6,300 to 6,500 levels, which may, in turn, “reignite the bears to play.”
