Stocks seen sideways with upward bias

MANILA, Philippines - The country’s benchmark stock index will attempt to recover from a two-day slump it suffered last week as more corporate earnings are seen fueling a possible momentum comeback.

Analysts said Philippine stocks could drift sideways this week but on an upward bias given the stock market’s proven resilience.

“Like last week, we expect the index to continue its sideways pattern as selling pressure continues to build up,” said Regina Capital Development Corp. managing director Luis Limlingan.

The Philippine Stock Exchange index (PSEi) snapped a nine-day winning streak last Thursday and closed the week on Friday in the negative territory for the first time this year at 7,730.57.

Justino Calaycay Jr., analyst at Accord Capital Equities Corp., said last Thursday’s finish was the first time the PSEi fell below the 7,800-line since it first stepped above the mark last Feb. 18.

Calayacay, however, is confident the index can make its return above the 7,800 level this week with help from the downpour of companies’ financial results.

“We are now close to the earnings reporting season with respect to full year 2014 performances. In fact we have already been fed a good number of results early on. The results have so far kept pessimists at bay and armed optimists with much hope,” Calaycay said.

“Already we are seeing some action on top and second tier counters which we can attribute to anticipations of the release of their resulting operating numbers. This should be the fodder to feed the fire of optimists and serve as the jumping board for the market going into the final month of the first quarter,” he added.

In terms of external factors, Calaycay said the ongoing Greece narrative is expected to have little impact on the country’s economy and to local equities as well.

Analysts have placed immediate support at 7,650 to 7,700 while resistance is seen at 7,800 to 7,850.

“Taking profits, especially on core positions is recommended to protect gains. Until a clear support base is determined, no repositioning strategy is to prevent buying on false support level,” Limlingan said.