Philippine Daily Inquirer
12:04 am | Monday, March 24th, 2014
The local stock market is seen awaiting fresh catalysts from local and external events this week but may benefit from some month-end window-dressing activities.
Last week, the Philippine Stock Exchange index (PSEi) dropped by 51.98 points or 0.81 percent to close at 6,339.26 on Friday.
Among the key events this week will be the policy-rate setting of the Bangko Sentral ng Pilipinas on Thursday. The BSP last week hinted at an earlier-than-expected monetary tightening.
Joyce Anne Ramos, an analyst at AB Capital Securities, said other developments to watch would be US data releases, including new home sales, unemployment claims and pending home sales. Another important event, Ramos said, would be a G7 (group of industrialized countries) meeting, noting that policy shifts that might be discussed in the meeting could influence markets.
“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. 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, and if breached, next
resistance level may be found at 6,660,” according to Ramos, adding that a downward pressure in prices caused by negative market news might lead to a fall back to the PSEi’s support levels at 6,300 and 6,270.
“Given this, we advise investors to remain cautious and prudently take profits near the mentioned resistance levels and accumulate near the support,” she said.
Banco de Oro Unibank chief strategist Jonathan Ravelas said that chart-wise, the short-term uptrend channel remained intact, which might allow the index to retest the 6,500 level. Doris C. Dumlao
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