PSEi to try hitting, staying above 8,000 level this week

Local stocks are seen taking their cue from the unfolding local corporate earnings season, which may test the 8,000 level for the Philippine Stock Exchange index.

Last week, the main-share Philippine Stock Exchange index added 53.24 points or 0.7 percent to close on Friday at 7,962.13.

Trading will resume tomorrow as today is a nonworking holiday in commemoration of the Edsa Revolution.

BDO Unibank chief strategist Jonathan Ravelas said investors remained on the sidelines as they awaited more developments on the US-China trade talks and the results of the full-year 2018 local corporate earnings.

“The week’s close at 7,962.13 highlights the strong support exists at the 7,800 to 7,850  levels. Look for another attempt to hit and stay above the 8,000 levels. Watch this space,” Ravelas said.

While the PSEi bounced off its trendline support, it is not out of the woods yet, said Christopher Mangun, head of research at Eagle Equities Inc.

“The best scenario would be for it to gain more positive momentum to continue to stay in the trendline. As more earnings reports come in [this] week, this may provide the catalyst that the market needs. A break below the support of the trendline may cause it to fall further, perhaps back down to the 7,500 level,” Mangun said.

This shortened week is going to be “make or break” week, Mangun said.

“We are still positive that the market will perform better and end the week with gains as economic fundamentals are intact, the continuous inflow of foreign funds and the strengthening of the currency,” Mangun said.

Another factor that may favor stocks this week is that this is the last trading week for the month and investors may want to end the month in the green and thereby do window-dressing trades.

Mangun noted that the PSEi was currently down by 0.56 percent this month, but a strong upside move this week could cause it to end the month in positive territory.

Since the start of the year, the PSEi has gone up by 496.11 points or 6.6 percent.