Market ready to breach 7,000 mark

MANILA, Philippines — Stocks are looking to ride on the momentum of last week’s uptrend as the main index attempts to break past the 7,000 wall anew.

The benchmark Philippine Stock Exchange index (PSEi) has been flirting near the 7,000-mark the past weeks, but was still unable to actually breach the crucial level. Last Friday, it closed at 6,951.53.

Online platform 2TradeAsia said the market needs stronger catalysts to go past the 7,000-mark again.

“The glass ceiling that is 7,000 needs a stronger catalyst to shatter, beyond reopening themes or the Bangko Sentral ng Pilipinas’ maintaining the status quo, that seems to be baked in prices as of the moment,” it said in a market commentary.

Moving forward, it said “the grind toward 7,000 now overlaps with the third quarter earnings season, also known as 2022 speculation season.”

“Immediate support is 6,800, with resistance at 7,000 to 7,100,” 2TradeAsia said in its report.

The last time the PSEi breached the 7,000 mark was on Sept. 14 in intra-day trades, but later gave up gains to close lower.

For this week, investors would continue to monitor developments related to the COVID-19 lockdowns, which could reduce the drag of lockdowns on the economy, at the very least, and could be a de facto measure to further re-open the economy, said Michael Ricafort, chief economist a Rizal Commercial Banking Corp.

Investors will also be looking at the trend in the new COVID-19 cases locally, as well as in Asia and worldwide in view of the more contagious Delta and Lambda variants.

As 2TradeAsia mentioned, investors would also be looking at third quarter and nine-month corporate earnings results.

Against this backdrop, Ricafort said the next important resistance levels would be the 7,000 psychological mark and then the potential re-test of the 7,064.24 high posted on July 6, as gateways.

“Immediate minor support is seen at the 6,660 to 6,740 levels. The important support over the past four months are the 6,450 to 6,570 levels, which helped keep intact the underlying upward trend or momentum during the same period following an intra-week low of 6,779.19 on Sept. 21,” Ricafort said.