PSEi nears oversold position
With its recent string of declines, the Philippine Stock Exchange index (PSEi) is already entering oversold levels, which could indicate a potential bounce, but analysts remained wary as they noted the benchmark measure still had room to drop.
The PSEi last week shed 4.13 percent to 6,084.84 as investors weighed the gradual release of reports on the damage wrought by Supertyphoon Yolanda. Adding to this concern was renewed speculation of a reduction in monetary stimulus by the US Federal Reserve.
“With the index still showing signs of a pullback, we don’t suggest to buy and invest heavily. A retreat toward 6,000 is not ruled out as it is the next support after 6,170,” AB Capital Securities Inc. said in its weekly outlook report.
It noted that other technical indicators pointed to further declines.
“A positive catalyst is needed to keep PSEi from breaking 6,000,” AB Capital added.
2TradeAsia.com, in a separate report, also told investors to wait and see.
Article continues after this advertisement“ Having cracked below 6,300 to an intra-week low of 6,079, participants might wait until the market settles to a solid ground before buying bargain shares. Spot for potential accumulation and balance portfolios with defensive bets,” the stockbrokerage noted.
AB Capital noted in its report that a number of corporations have already dipped below their historical values. However, it was hesitant to give buy ratings for all. Among its picks were East West Bank and casino operator Bloomberry Resorts Corp. Miguel R. Camus
