Philippine shares are expected to retest the 7,900-mark on the benchmark PSEi this week after a dose of optimism from double-digit company earnings for the first quarter fueled a five-day rally last week.
Investors are excited by more corporate earnings propelling the PSEi higher this week, said Luis Limingan, managing director of Regina Capital Development Corp.
“The PSEi is expected to continue its advances from last week, given the improved readings coming from its indicators. Also, since the index recently breached its trend line resistance, some accumulation can be done especially for issues that bounced above their respective support points,” Limlingan said.
“Bullish condition this week is for the index to break 7,950 ̶ this will give us a “buy” signal as prices are now more likely to retest 8,000, and potentially 8,140 based on indicator bullishness and volatility.”
If the market fails to keep a positive stance, Limlingan said the PSEi tends to retrace its steps back to 7,508 and then ̶ if broken ̶ down to 7,360 points.
In another weekly outlook, Accord Capital Equities Corp. analyst Justino Calaycay Jr. said the market may continue a resilient pattern which signals positive leads the rest of the week.
“The PSEi has once again showed its “resilience” and will continue to do so next week as numbers with a positive spin are expected. Albeit having done so gradually, it has been able to restore the index above 7,800 with the 7,900-line well within sight – even as talks of a 7,300 or less index surfaced following the extended debacle in the weeks prior,” Calaycay said.
“We are now getting closer and closer to an all-important economic data release – GDP. The results are usually reported out toward the month’s end and thus leave the market with sufficient time to cast their ‘peso’ votes,” he added.
In a separate note, BPI Asset Management is forecasting the PSEi to trace a slight downtrend this week as the first quarter earnings season draws to a close and more investors shift towards the next Federal Open Market Committee (FOMC) meeting this week.
“We expect the PSEi to trade range-bound between 7,700 and 8,000 with a slight downward bias as the first quarter of 2015 corporate earnings results come to a close and as market players move ahead of the Federal Open Market Committee meeting minutes release next week,” the note read.
On Friday, the main PSEi rose by 0.64 percent or 50.51 points to 7,881.95, while the All Shares inched up 0.52 percent or 23.63 points at 4,546.13.