The benchmark stock index is expected to follow leads from foreign markets this week after Friday’s surprise surge but analysts are keeping their fingers crossed that a “Santa Claus” rally is in the offing.
On Friday, the Philippine Stock Exchange index (PSEi) advanced 2.15 percent or 152.11 points to 7,224.21, breaching the 7,200 points after a few downsides to 7,000 points until Thursday. The wider All Shares index also increased 1.83 percent or 76.06 points to 4,238.28.
Jason Escartin, investment analyst at F. Yap Securities Inc., said the week will give investors the option to cash in on gains, or “seize this base to buy, which could also trigger a much-awaited Santa Claus rally.”
Analysts project that this week maybe the start of window dressing but the index is expected not to go beyond 7,400 points.
Astro del Castillo said on Friday that the market is seen to follow global leads in the following days due to the lack of fresh catalysts that can move the market domestically.
“Possibly [going up to 7,400 points]. We’ll see the trend and news for the following days but the upside will just be small. Maybe about 7,200 points to 7,300 points by yearend. We’ll see,” del Castillo said.
Justino Calaycay Jr. of Accord Capital Equities Corp. said there are no definite leads from the local market and overseas bourses do not look that good either.
“Risks to investing in equities next year have surfaced. Talks of a possible recession in Europe heightened by fresh developments from Greece and deficit ratios of France and Italy. The drop in oil prices, even as it benefits the domestic economy, is impacting negatively on others — and seemingly, on a net basis, the latter wins out,” he added.
Regina Capital Development Corp. Managing Director Luis, Limlingan said in a text message that it is advised for investors to “accumulate on some positions” and to hold their shareholdings “until all technical threats have reversed.”
“Also keep close watch on 7,160 points and 7,030 points because these will be the main support levels that the index must hold on to keep ascending triangle pattern intact. A strong buy will be issued once clear buy signals are generated,” Limlingan said.
For its part, RCBC Securities Inc. said in an advisory posted in its website that the market may go positive this week after a series of declines the past few days as the market broke the strong 7,200 resistance on Friday.
“For now, 2015 macro targets will be revisited, which will gauge the disparity between skeptics versus bulls. We view weaknesses in stellar sectors as buying windows, especially those with firm resolve on their expansion mode,” Escartin said.
He said immediate market support is at 7,100 points to 7,150 points, while resistance is at 7,300 points to 7,400 points.