Stocks seen to sustain upward bias

MANILA, Philippines — Investors will be on the lookout for fresh leads this week as the stock market hopes to sustain its momentum and keep its winning streak going.

The Philippine Stock Exchange index finished last week on a positive note, closing near the 6,800 level. It settled at 6,791.69 last Friday, 2.16 percent higher week-on-week.

“We continue to see a buildup in positive momentum for the local bourse as it extends its rally to a fourth straight week,” Philstocks Financial research manager Japhet Tantiangco said.

He said the local market, which is on a three-day winning streak, has also gotten past the 6,700 level which was previously considered as a resistance.

He said its 50-day and 200-day exponential moving averages are about to form a golden cross and value turnover, while still tepid, is seen to be improving compared to previous weeks.

“With the four-week rally, we may see some pullbacks next week as traders book profits. However, at its current level, the local market is still deemed to be fundamentally undervalued. Hence, long term investors may also take positions next week,” he said.

Tantiangco said it is likely that market could post gains this week with optimism driven by hopes of a rate cut by the Bangko Sentral ng Pilipinas soon and anticipation of second quarter corporate results.

“The local currency, if it strengthens further against the US dollar and Wall Street, if it continues to post record performances, are also expected to provide aid to the bourse,” he said.

Market support is seen at 6,700 while resistance is at 7,000.