Bargain hunting likely this week

MANILA, Philippines — Share prices could continue gaining some ground this week with investors seen hunting for cheap stocks while waiting for fresh leads.

While the benchmark Philippine Stock Exchange index (PSEi) closed in the red last Friday at 6,619.89, it managed to inch up by 0.02 percent week-on-week.

“The local market posted marginal gains last week. However, it had another failed attempt of taking the 6,700-line implying that a strong resistance remains at the said level. Tepid trading has also returned, inferring that many have gone back to the sidelines amid lingering market uncertainties,” Japhet Tantiangco of Philstocks Financial said.

On a positive note, Tantiangco said the market managed to maintain its position above its 200-day exponential moving average (EMA).

With the local market still at attractive levels, he said bargain hunting could take place this week.

“However, we still expect the market to move in a cautious tone while investors wait for fresh leads. Primarily, investors are expected to watch out for more cues on our inflation and interest rate outlook,” Tantiangco said.

Further, he said investors are expected to monitor the movements of the local currency against the US dollar this week.

“A rebound above the 58 levels may spur positive sentiment but a further depreciation may weigh on the bourse,” he said.

In a report, 2TradeAsia.com said the PSEi remains range bound around the 6,400 to 6,800 band, with macro downside risks preventing any propulsion toward the medium-term resistance of 6,800.

Immediate support is seen at 6,400 to 6,500, while resistance is at 6,700 to 6,800.

“If the market gets past its 50-day EMA, we may see a retesting of the 6,700-resistance line. If the market falls below its 200-day EMA however, the market may test next its recent trough at 6,511.93 touched last May 10. Falling below this level too will be taken as a bearish development for the local bourse,” Tantiangco said.