Ghost month to clip stock market’s high spirits?
After a week of upbeat trading inspired by a favorable stream of corporate earnings reports, local stocks are seen to consolidate this week as investors tread with more caution through the so-called ghost month.
The main-share Philippine Stock Exchange index (PSEi) racked up 269.68 points or 4.3 percent last week, closing Friday at 6,539.91 and advancing for the first time in five weeks.
BDO Unibank chief strategist Jonathan Ravelas said good corporate earnings results, particularly among banks and property firms, shored up investor sentiment.
“The week’s close at 6,539.91 signals further consolidation within the 6,300 to 6,700 levels in the near-term,” Ravelas said.
“The market is facing headwinds that will keep the market flat at best,” said Manuel Lisbona, president of PNB Securities. “The latest lockdown due to a resurgence of COVID cases will again put a damper on the economy especially if the lockdown is extended.” Lisbona noted the market was likewise heading into a seasonally weak period due to the “ghost” month, which coincides with the peak of summer holidays in other parts of the world. This is the period in the Lunar calendar when Asian investors tend to avoid making big investments. This year, the “ghost” month started on Aug. 8 and will last until Sept. 6.
Lisbona said, however, this could be a good time for both long-term investors and swing traders to take position for the seasonally strong period of December to January.
For now, Lisbona sees the PSEi’s next market resistance at 6,700 and support at 6,200.
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