Shares likely to extend rally

Philippine stocks might see more upside before entering a correction and consolidation phase that could trigger a partial retrace of the market rally that occurred in the first few weeks of 2023.

As the local benchmark Philippine Stock Exchange index (PSEi) holds steady above 7,000, COL chief technical analyst Juanis Barredo said he was targeting the initial resistance areas of 7,100 to 7,200.

“If [the market] excites itself then maybe [it can] extend to 7,400 to 7,500, if we’re lucky, and eventually make a correction back. I’m thinking closer to 6,650 and maybe even 6,400 as a potential area of support,” he said during a briefing on Friday.

He added there were no signs the market would reverse its upward direction in the long-term given his target of 7,500 to 8,250 later this year or early 2024.

“If we do get [a correction], take the opportunity to position in those areas because I think that will be a good opening to position for this recovery phase,” Barredo noted.

Michael Ricafort, chief economist at the Rizal Commercial Banking Corp., said the PSEi saw its first correction the past week after a five-week rally.

“[S]entiment on the PSEi was recently supported by less hawkish Fed signals amid expectations of a smaller +0.25 Fed rate hike on February 1, 2023 that could be matched locally, amid some dovish signals from local authorities recently,” Ricafort said.

He pegged the next resistance target at 7,100 while immediate support levels were at 6,840 to 6,950 for the PSEi. INQ
@miguelrcamusINQ