Index may resume uptrend this week

MANILA, Philippines — The stock market may resume its uptrend this week after the Chinese New Year holiday last week, traders said. 

“Despite the Philippine Stock Exchange index ending in the red last week, the uptrend is still intact. As a matter of fact, the pullback strengthens the rally as it keeps a cautionary sentiment and allows more investors to get back in. The key to the deal is its resilience in constantly closing above 8,000. If we follow the trendline on the weekly chart, there is a lot of wiggle room even if It does decide to break below 8,000,” said Christopher Mangun of Eagle Equities. 

He said there are two things that would be looked at right now that could fuel the rally – earnings reports and foreign inflows. 

“These may serve as a catalyst for the market to continue its climb. However, if earnings disappoint or if foreign money ceases to flow in, we may continue to see it trade between 7,800 and 8,100 for the following weeks as the market builds momentum to go higher in the longer term. Either way, we are still bullish on this market as economic fundamentals continue to improve after the terrible performance that we saw last year,” he said.

For its part, F. Yap Securities said that with local gauges already 20 percent up since 6,843 last Nov. 13, there may be breathers to set in to strengthen this climb.

“We laud the spate of foreign buying, but much could still change especially with MSCI’s upcoming rebalancing on Feb. 11,” it said.

It cautioned investors to trade selectively and within range. 

“Immediate support 7,950 to 8,000, with resistance at 8,150 to 8,200,” it said.

Last week, the local equities ended the four-day trading week lower, with most investors on their Lunar New Year break. 

“The PSEi managed to breach an intra-week high of 8,213, before finishing 73 points lower at 8,070, which was down 0.9 percent.  The average turnover slowed to P7.47 billion,” F. Yap said.