Analyst: 7,500 to 7,800 looking promising for stock market

The benchmark Philippine Stock Exchange Index (PSEi) has a chance to move higher this week after a major breakout in previous sessions.

BDO Unibank Inc. chief strategist Jonathan Ravelas said the PSEi could retest the 7,500 to 7,800 levels in the near-term.

The PSEi rallied over 2.8 percent last week to close Friday at 7,456.35, breaking out from a four-month consolidation between 7,000 and 7,350.

Investors cheered the higher fourth quarter gross domestic product figure and downtrend in COVID-19 cases, prompting the government to relax mobility restrictions at the beginning of February.

On Friday, the National Statistics Authority said inflation settled at 3 percent last January, slowing down for the fifth month in a row from 4.4 percent last August through 3.2 percent in December.

Meanwhile, local stocks have room to rally should fourth quarter corporate earnings produce better than expected results, Ravelas said.

While the market narrative has shifted to the domestic economy’s recovery, Ravelas said they would continue to monitor external threats such as the rise in oil prices and the US Federal Reserve’s planned interest rate hikes.

He said the failure of the PSEi to maintain its present levels could see it pull back to the previous consolation range of 7,000 to 7,350. INQ