Market seen sideways

MANILA, Philippines - Mixed reactions are expected to surround the market this week following rollercoaster sessions last week that saw the country’s benchmark stock index settle in the negative territory for the second time this year.

Analysts said they expect the local market to drift sideways in the next five days, but outlooks differ as to whether movement will be upward or downward.

“We are still firm to our sideways to down outlook despite the PSEi maintaining its hold above 32-day moving average (MA). More caution has to be exercised this week, especially that technical readings are putting even more pressure on prices. Our hold recommendation still stands with a trigger to ‘take profits’ if 32-day MA is breached,” said Luis Limlingan, managing director at Regina Capital Development Corp.

Accord Capital Equities Corp. analyst Justino Calaycay Jr., however, said Friday’s finish of above the 7800-mark despite the decline is a hopeful sign going into this week’s sessions.

“The lower close to the week however does not alter the existing or prevailing trends in the market – sideways over the short-term as well as the medium-term. Except for the fact that the pace has slowed, the monthly charts still show a valid up-trend,” Calaycay said.

Week-on-week, the Philippine Stock Exchange index (PSEi) gave up 52 points as profit takers swamped the market last Friday.

“Zigzag sessions prevailed, as equities swung between gains & losses within 7,772 to 7,862,” said Jason Escartin, investment analyst at F Yap Securities, summarizing last week’s market performance.

“Modest recovery is possible this week, especially with the reversal of prior week’s net foreign selling (P59 million on average) to buying (P111 million). Caution would likely rule overall, in light of overseas developments, plus reaffirmed volatility at the crude futures market,” Escartin said.

Analysts have placed immediate support this week at 7,750, while resistance is pegged at 7,850 to 7,900.