PH stocks seen testing 5,500 mark

After last week’s breakout to new all-time highs due to a surge in foreign inflows, the main local stocks index is seen testing 5,500 this week.

Last week, the main-share Philippine Stock Exchange index surged 1.75 percent to 5,439.84 on fresh hopes that the Bangko Sentral ng Pilipinas will ease monetary policies and rosier local economic growth forecasts.

“With the market successfully revisiting the 5,400 levels, continue to expect an assault to the 5,500 levels in the week ahead, though the market appears tired and in need of a much-awaited correction,” said Jonathan Ravelas, chief strategist at Banco de Oro Unibank.

But a break below the 5,280 levels could call for further losses toward the 5,200 levels in the near term, Ravelas said.

Gregg Adrian Ilag, an analyst at AB Capital Securities, said that on the technical side, the index might test the “strong” resistance at 5,500. “Oscillators are near the oversold territory, which may prompt a pullback for the near term after it hits resistance. Retracement levels are at 5,400 (76.4 percent) and 5,350 (61.8 percent),” he said.

Ilag said the stock market was now trading at premium valuations relative to its peers but noted that this should ease over the long term as corporate profits grow.—Doris C. Dumlao