Market sees correction

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Analysts expect the stock market to correct this week from Friday’s record finish due to shortened trading days. The market will be closed on Thursday, Friday and Monday (January 15,16 and 19) because of the holidays declared due to the coming visit of Pope Francis.

Joyce Anne Ramos, analyst at AB Capital Securities Inc., said there will be profit taking given the previous gains.

Jason Escartin of F. Yap Securities Inc. and Justino Calaycay Jr. of Accord Capital Equities Corp. likewise agree that there will be market volatility.

The market capped a 10-day winning streak with record finish last Friday because of investor optimism and dividend play.


Today, the market is expected to weigh in that last Friday Dow lost 170.50 points, S&P 500 was down 17.33 points, and Nasdaq less 32.12 points..

Escartin said investors might also be keen on using the “buy on dips strategy” as corporate are seen to benefit from relatively “low interest rates” and “aggressive capex [capital expenditure]initiatives” for 2015.

AB Capital said in its weekly market wrap that the PSEi is seen to go down to up to 7,250 points this week should the weakness in correction prevails.

But if buy on dips strategy continues to be solid, “this week’s bull run can push the index up to 7,700 to 7,800 level,” AB Capital said.

Calaycay, for his part, is a bit cautious as the market pushed past the 7,360 resistance and the PSEi was deemed being into “deep overbought territory.”

“While the short term charts now show a bullish picture driven by monthly charts still suggest some weakness. Both time horizons in fact suggest that the PSEi is deep into overbought territory,” Calaycay said.

“Investors are well advised to take advantage of the present positive volatility, if and when it extends to next week,” he added.

On Friday, January 9, the PSEi recorded its intraday and close all time highs— advancing 35.09 points or 0.48 percent to end at 7,402.72, while having an intraday high of 7,446.66 in the morning.

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