Philippine Daily Inquirer
6:49 pm | Sunday, January 12th, 2014
Sluggish trading is seen at the local stock market this week in the absence of fresh catalysts to load up on equities.
Last week, the main-share Philippine Stock Exchange index (PSEi) gave up 105.05 points or 1.77 percent to end at 5,842.88 on Friday.
“We’ve found a strong support at current levels. We’ll probably see boring trading in the week ahead but at least we’ll no longer likely test the lows. It will be range-trading at this point,” said Jose Mari Lacson, head of research at Campos Lanuza & Co.
Abbygayle Estrella, analyst at AB Capital Securities, said a mixed bag of local and foreign economic data created an invisible barrier to the psychological 6,000 resistance.
Last week, she noted that the uninterrupted trading week saw value turnover averaging at P5.22 billion, higher than the previous week’s P4.03 billion.
Stock rights offerings of Bank of the Philippine Islands and Philippine National Bank threaten to sap the remaining liquidity in the market while Top Frontier Investment Holdings Inc. will debut by way of introduction today, Estrella said. “Such factors, not to mention the influential pull by Wall Street, have built a strong hurdle to the 6,000 level,” she said.
Breaking the 20-day exponential moving average, Estrella said the PSEi’s recent
close (resembling a black candle) was an unfavorable sign that could slump to 5,700 if market sentiment would remain lethargic.
For this week, AB Capital Securities expects the PSEi to course sideways with a negative bias hinted by technical indicators.
“For the near term, the 6,000 level remains a psychological resistance unless a significant local development will spur sentiment. Shadowing the ups and down in the regional markets is not enough to support the PSEi’s recovery in the long term,” Estrella said. “We advise investors to be cautious of their positions in the wake of the range-bound trade.”
The main index is trading at the upper band of its sideways movement, she said, adding that the entry to the lower band would be an opportunity for bargain hunting at the 5,700 level. Doris C. Dumlao
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