Index may climb above 7,000 level

MANILA, Philippines — The Philippine Stock Exchange Composite index (PSEi), the benchmark gauge, is seen approaching its next resistance level at above 7,000.

“This serves as the next important hurdle or breakout point prior to further upside potential going forward,” said Michael Ricafort, chief economist at  Rizal Commercial Banking Corp.

The immediate major support is at the 6,640 to 6,740 level, which help keep intact the latest strong upward momentum over the past two weeks.

Ricafort said that consistently, there is a gap area at the 6,690 to 6,790 range that was abruptly skipped during the strong rally on Nov. 10, which also now serves as the immediate support level.

Last week, the PSEi gained by 284.19 points or 4.2 percent, sharply higher for the third week in four weeks.

Foreign fund managers returned to the market and brought foreign fund buying to $66.2 million, better compared to the previous week’s foreign selling of $10.2 million.

The highest level reached for the PSEi this week is at 7,079.18, which was on Nov. 11.

Since the start of 2020, the decline of the PSEi has already been reduced to 10.8 percent and from the low of 4,039.15 posted on March 19 the PSEi already gained by a total of 72.6 percent.

Moving forward, Ricafort said traders would continue to look at both external and local factors.

The US stock markets also corrected lower from new record highs posted earlier during the week, partly on speculations about possible US lockdown of four to six weeks by the incoming Biden administration amid new record high COVID-19 cases in the US.

Investors will also look at the latest storm damage which could lead to a temporary spike in inflation and slower GDP data, as well as the progress on the COVID-19 front.

Continued measures to reopen the economy are also being closely monitored by investors.