The benchmark Philippine Stock Exchange index (PSEi) is seen ranging from 7,500 to 8,450 with target resistance at 8,136, said Victor Felix, equity analyst at AB Capital. File photo
MANILA, Philippines – The stock market may see some profit taking this week ahead of the so-called ghost month of August, analysts said.
The benchmark Philippine Stock Exchange index (PSEi) is seen ranging from 7,500 to 8,450 with target resistance at 8,136, said Victor Felix, equity analyst at AB Capital.
Felix said primary support is seen at 7,950 while secondary support is seen at 7,850.
Felix said investors would be keeping a close watch on President Duterte’s State of the Nation Address on Monday. Depending on his pronouncements, the SONA can push the index higher, Felix said.
“Overall, the PSEi may be experiencing an overwhelming bullish sentiment as well as favorable technical formation for the bulls. Thus, we caution for an investing mindset at these levels; meanwhile, momentum and range trading are the most effective strategies in an indecisive market movement. Next week, the president’s SONA will provide for either a boost in bullish sentiments or start a major correction,” Felix said.
Last week, the market closed on a near 15th month high amid a string of positive news. These include Japan’s stimulus bets, the move of the European Central Bank to keep rates steady and the generally positive second quarter earnings.
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Felix said companies are expected to continue reporting positive corporate earnings next week.
“Locally, investors were generally positive as early first half results remained positive…For next week, we expect corporate earnings to continue to drive market sentiment,” Felix said.
2TradeAsia.com agreed that corporate results would be a major consideration for investors.
“Attention would still trend with first half 2016 results, especially for select shares likely to outperform the economy,” it said.
It also said that President Duterte’s SONA will be closely watched by investors especially as they wait for more details on his economic agenda.
“President Duterte’s high political vote of confidence is enough to highlight his first SONA on July. Markets will be all ears on details of his 10-point economic agenda, specifically in expediting infrastructure spending. If part of his speech will move on this note, holdings, infra-related plays might lead the limelight. Meanwhile, angles relating to lowering of income and corporate taxes might provide the boost for consumer spending and investment related companies,” 2TradeAsia.com said.
