MANILA, Philippines - Local stocks are seen to trade sideways with an upward bias this week as more favorable 2013 earnings reports trickle in.
AB Capital Securities said trading will remain robust driven by a strong economy, improving state finances, record-high remittances from Filipinos living abroad, and positive corporate earnings reports.
While the PSEi benefited from investor enthusiasm on corporate earnings results, this may not be enough to sustain the recent upward trend given the financial turmoils in its Asian neighbors and the US.
The PSEi surged by 194.7 points or 3.18 percent week-on-week to close at 6,308.36 as foreign investors gobbled up local stocks. Foreign buying amounted to P7.56 billion last week.
After a five-day rally, local stocks succumbed to profit-taking as investors opted to lighten positions ahead of the weekend.
“From a technical perspective, PSEi’s failure to sustain its five-day rally is an expected but natural healthy fall. We believe that it will continue to slide back to its first support level at 6,270 wherein a breakdown may cause a further decline to 6,225 and 6,180 levels,†AB Capital said.
Resistance was pegged at 6,390 to 6,420.
For this week, investor attention will turn to the US which is expected to release key economic data such as new home sales, core durable goods orders, preliminary GDP result, pending home sales and the CB Consumer Confidence survey.
Investors will most likely watch out for any signs of continued economic recovery, AB Capital said.
DA Market Securities, on the other hand, said any pullback is expected and welcome due to the market’s overbought level. It sees the market’s support at 6,233.