MANILA, Philippines – The upswing in the local bourse is still in play for this week, with month-end window dressing and positive news likely to push the benchmark index close to the 6,500 level.
Investors will monitor several market-moving news here and abroad, particularly those related to interest rates, analysts said.
“The uptrend remains intact and a retest of 6,500 level is still probable,” said Jonathan Ravelas, chief market strategist of BDO Unibank Inc. On the other hand, there is also a risk of the main index dropping below the 6,300 level.
“On a technical basis, the market broke its short-term support level at 6,400 and 6,350, but remains mid-way through its three-month upward trend channel,” said Joyce Anne Ramos, an analyst at AB Capital Securities Inc.
“Should the anticipated market developments turn out positively in addition to the possibility of window dressing for the end of first quarter, we expect that the local bourse will slowly inch upwards to test the resistance levels at 6,550 and 6,570,” Ramos said.
Week-on-week, the Philippine Stock Exchange index lost 0.81 percent or 51.98 points to close at 6,339.26, with the decline led by holdings firms that sank 2.21 percent or 130.23 points. It marked the second straight week the main index ended in the red.
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The geopolitical tension in Ukraine, the nearing conclusion of the US Federal Reserve’s stimulus program and the impending increase in US interest rates kept a lid on share prices last week.
For this week, investors will await several noteworthy leads.
On the local front, the Bangko Sentral ng Pilipinas’ Monetary Board will hold its policy meeting on Thursday. Investors are looking for clarity about the possibility of an increase in interest rate.
Also this week, new US home sales, unemployment claims and pending home sales report will be released.
Ramos said that if the main index hits the 6,550 level, the next resistance level is seen at 6,660.
However, a downward pressure caused by negative market news, might result in a retreat to the 6,300 and 6,270 support levels.
“Given this, we advise the investors to remain cautious and prudently take profits near the mentioned resistance levels, and accumulate near the support,” Ramos said.
