Market looks to Greek debt crisis for direction


THE Greek debt crisis is likely to be a major catalyst for trading on the Philippine Stock Exchange this week.

While forecasting a slightly positive move this week, AB Capital Securities Inc. said in its weekly review the PSEi will mainly get its bearings from the Greece debt debacle.

“Investors are likely to look into the Greece debt crisis for direction. Currently, there are thousands rallying outside the parliament in central Athens to urge the government to reach an agreement with its creditors and prevent it from exiting the euro. We view this as slightly favorable news, as this may pressure Greece Prime Minister Tsipras to accept the austerity measures,” AB Capital said.

“The outlook remains neutral as the index tries to re-test resistance at 7,650,” it added.

Failing to breach the resistance level, the PSEi is likely to seek a place to bottom out at the nearest support area at 7,500—if not, then there is the 7,400 mark.

For AB Capital the smoke signals from the charts are bearish on the heels of last week’s net foreign selling. The other technical indicators are beeping with “diverging signals” as the stochastic finds that the index is nearing overbought levels while the Relative Strength Index (RSI) “points to a further upside.”

The bottom line?
“As such, investors are advised to lighten equity exposure if the index fails to sustain its momentum,” AB Capital said.

BPI Asset Management, on the other hand, is expecting the PSEi to play within the 7,400 to 7,660 range—but “… with a downward bias.

“The market will still likely be influenced by global developments, particularly the result of the talks in Greece,” BPI Asset Management said.

The view from Regina Capital Development Corp. is somewhat bullish. Analyst Luis Limlingan sees the market churning out uneven trades.

“Expect a choppy week as the index may still attempt to reverse its downtrend, as shown by its improving technicals – breaking 7,690 will be our bullish condition this week,” Limlingan said.

“On the other hand, selling pressure remains strong that sharp pullbacks down to the 260-day moving average are possible based on current volatility readings and bearish intraday patterns. Again, we reiterate selling on rallies until our bullish condition is met,” he added.

Limlingan noted the short-term buys of last week, saying that current levels “are good for taking profits as most issues – especially the index stocks – that rallied are trading near their respective resistance levels.”

On Friday, the PSEi dipped by 0.07 percent or 5.69 points to 7,601.17, while the All Shares edged lower by 0.02 percent or 0.79 points to 4,351.39.


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