Market seen hitting new highs this week

MANILA, Philippines - The Philippine stock market may extend its upward trend following its rapid ascent to the 7,600 mark last week.

Although technical breathers are expected to disrupt rallies once in a while, analysts said the local stock market is still up for an upward climb given the country’s strong fourth quarter gross domestic product results.

“Following the Philippine Stock Exchange index’s (PSEi) run-up to as high as 7,736, technical breathers seem appropriate to sustain its long-term ascending trend.  Declines might stay limited however, as foreign cash seize on dips to buy,” said Jason Escartin, investment analyst at F. Yap Securities.

Analysts also see the release of fourth quarter 2014 corporate earnings results as factors that could sustain the market’s bull run in the next five trading sessions.

“With the 2014 GDP out of the way, obviously satisfying the appetite of investors, attention should shift to the oncoming earnings cycle. The rather decent GDP result for the full-year and the stellar 6.9 percent in the fourth quarter should raise the ante on earnings for the same period,” said Justino Calaycay Jr., analyst at Accord Capital Equities Corp.

Last week, the local market closed on a very strong note at 7,689.91, the PSEi’s seventh all-time high for the month of January.

It also posted a new record intraday high of 7,736.97 last Thursday. 

Week-on-week, the benchmark index soared 141 points or 1.9 percent led by gains in financials (three percent), holding firms (2.94 percent), and industrials (2.9 percent).

This week, Escartin placed resistance at 7,750 to 7,800, while strong support is seen at 7,500.