Stocks to trade sideways this week

MANILA, Philippines — Local stocks are seen trading in a narrow range as investors look for fresh leads.

Last week, the Philippine Stock Exchange index  gained for the second straight week, up by 1.8 percent or 121.83 points  to 6,796.34, driven by the passage of additional fiscal measures such as Bayanihan 3 and additional measures to further reopen the economy under general community quarantine.

Analysts said the  Philippine Stock Exchange composite index’s next important resistance is  at the 6,900 levels.

This serves as the gateway prior to a potential re-test above the psychological 7,000-mark.

“Immediate minor support at the 6,500 to 6,600 levels, which help maintain the strong upward momentum recently,” said Michael Ricafort of Yuchengco-owned Rizal Commercial Banking Corp.

“Continued progress on other reform measures at the House of Representatives, such as the proposed amendments of the restrictive economic provisions under the Constitution and the Bayanihan 3 economic stimulus approved at the third and final reading, among others, have again sent strong positive signals that led to the recent gains in the local financial markets,” Ricafort said.

The immediate major support is seen at 6,300 to 6,400 levels.

Japhet Tantiangco, an analyst at PhilStocks Financial Inc., said the local market may decline if the country’s COVID-19 situation further relapses.

“For last week so far, our new COVID-19 cases have averaged 6,459 per day, higher than the prior week’s average of 5,716. The COVID-19 situation in the National Capital Region Plus has shown signs of regressing while those in other regions have worsened. If this continues, the risk of the reimposition of stringent quarantine measures in more areas of the country is seen to rise, which in turn is expected to weigh on market sentiment. This  as the stringent quarantine measures are expected to further delay the country’s economic recovery,” he said.