THE benchmark PSEi is likely to attempt piercing the resistance level at 7,667, fueled by the recently concluded Asean Finance Ministers’ meeting in Cebu City, where the Philippines bagged business pacts with peer countries.
In a market note over the weekend, online stock brokerage 2TradeAsia.com said the Asean Finance Ministers Investors’ Seminar (AFMIS) will open wider avenues for Asean members.
“The move would allow the entry of qualified Asean banks (QABs), which could harness partnerships in financing and trade,” 2TradeAsia said.
“Also, BSP signed a declaration of conclusion of negotiations (DCN) with Bank Negara Malaysia (BNM) on the entry of QABs. Philippine banks could face competition, which will compel them to offer better products and service to clients,” it added.
But the US will remain on the spotlight, especially after recent missile strike on a Syrian airbase after a gas attack in a northwestern town that killed civilians including children.
“Moreover, last week’s meeting between US President Trump and China President Xi Jinping could provide guidance how trading relationship will be defined moving forward,” 2TradeAsia said.
The stock brokerage said the market will attempt to break into the psychologically important range of 7,650 to 7,670.
However, Regina Capital Development Corp. Managing Director Luis Limlingan said the PSEi could retest its 7,400 chart support as bullish indicators start to weaken.
“The technical indicators seem to be pointing towards a week with less market conviction. The momentum has started to stabilize as shown by the flat MFI and RSI,” Limlingan said. MFI or the Money Flow Index tracks price and volume to measure the buying and selling pressure, while the Relative Strength Index shows market momentum in terms of the latest gains and losses and is used to identify overbought and oversold conditions “RSI also signals that the market is already overbought. PSEi could test its 7,400 support this week as the bullish indicators start to weaken,” he added.
The PSEi surged by 3.72 percent or 272 points to close at 7,583 week-on-week on Friday, with all sectors in positive territory led by Property Index (+5.9 percent).
Turnover averaged P8.4 billion, and gainers outnumbered losers 102-83. Net foreign buying stood at P1.673 billion for the week, reversing the previous week’s outflow of P1.3 billion.