Market may break 6900-pt resistance ‘very soon’

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Philippine shares may hit the next resistance level at 6,900 points “very soon” after the benchmark index returned to the 6,800 mark on Friday on a surge of optimism following the country’s recent rating upgrade by global debt watcher Standard & Poor’s.

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“The country’s credit rating was raised to BBB from BBB- by S&P [and this]has boosted investor confidence anew. This will further attract investors to the market. This helped push the market beyond the 6,800 level,” Jonathan Ravelas, chief market strategist at BDO Unibank, Inc., said in a text message.

Lexter Azurin, research head at Unicapital Securities Inc., said he sees the next resistance level for the benchmark index at 6,900.

“The market may tap that level very soon. We may see some positive momentum continuing in the next sessions,” Azurin said.

Ravelas said market participants are in fact already expecting the main index to attempt the 7,000 level amid optimism arising from the credit rating upgrade and selected positive corporate news.

“Continue to expect the market to try the 7,000 level in the coming weeks,” he said.

However, the market is still susceptible to profit-taking after several days of gains, Azurin said.

“We expect profit-taking. But in the long-term the momentum can still be maintained,” he said.

On Friday, Philippine shares breached the 6,800-level anew, rising by more than 1 percent after S&P’s announcement Thursday that it has upgraded the country’s sovereign credit rating to “BBB” from “BBB-” and upgraded its short-term rating to “A-2” from “A-3.”

On Thursday, the market rebounded from a two-day correction, tracking the gains on Wall Street after US Federal Reserve Chair Janet Yellen indicated continued support for the US economy.

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