Investors to remain on sidelines this week

MANILA, Philippines — Investors are expected to stay on the sidelines this week as they await fresh leads from the economy and remain a bit cautious on higher inflation, traders said.

April Lynn Tan, head of research of COL Financial, said the higher inflation has been a major concern for market investors.

Inflation rose to a three-year high of four percent in January from 3.3 percent in December.

Jonathan Ravelas, chief market strategist at BDO, said that with such concerns, the market may range between the 8,350 and 8,700 levels in the near term.

“Chartwise, the week’s close at 8,467.56 continues to suggest the market may range between the 8,350 and 8,700 level in the near-term. Immediate support and resistance is seen at 8,350 and 8,800 level, respectively,” Ravelas said.

He said the market barometer PSEi fell by 1.68 percent week-on-week to 8,467.56 as investors remained sidelined and cautious as they have yet to get comfortable with the higher interest rates and higher inflation. 

They are also awaiting fresh leads from the economy and markets to justify accumulation of stocks.  

2TradeAsia.com, meanwhile, sees immediate support at 8,400 and resistance at 8,500 and 8,550.  

Last week, shares of Villar-led Golden Haven skyrocketed to a 52-week high of P380 per share before closing at P300 on Friday.  

But overall, the market traded sideways last week, which was what was expected.

 “We may have broken the 8,500 support level, but I believe we will continue to trade sideways in the following weeks between 8,420 and 8,700. If we do break below 8,420, then we may see it go all the way down and test support at 8,330. Building a base at these levels are important for the market before we can try and test the 9,000 level,” said Chris Mangun, head of research at Eagle Equities.