Investor optimism is rising; stock market could exceed 7,000

INVESTOR optimism could push the stock market higher this week, analysts said, with the benchmark Philippine Stock Exchange Index (PSEi) closing close to the 7,000 level.

The PSEi rose 118.01 points, or 1.73 percent, on Friday to end the week at 6,951.54. The last time it was higher was on April 25, 2022 when it closed at 7,020.83.

The broader All Shares also jumped, rising 49.58 points, or 1.38 percent, to 3,637.42.

“The market’s 50-day and 200-day exponential moving averages are about to form a golden cross indicating a possible medium to long-term upside,” said Japhet Tantiangco, senior research analyst at Philstocks Financial Inc. .

“In general, the local market is showing an optimistic trend,” he added.

Investors could take their cues from remittances from foreign Philippine workers due today and balance of payments data on Thursday, Tantiangco continued.

The market’s new support would be at 6,800 with resistance in the 7,000-7,100 range.

For online brokerage 2TradeAsia, market momentum is building as US inflation slowed in December.

“This is expected to fuel optimism about risk assets, particularly those that are cyclical heavy and sensitive to central bank moves, as this overall improvement is substantial evidence that interest rate breaks may at least be coming in the medium term,” he said. the report. .

The market jump would be largely broad-based and in line with baseline 2023 expectations of fewer downside risks in the first quarter and no global catastrophic events in supply chains and oil markets.

“We think there will be some opportunities in interest rate sensitive assets in banking and real estate, as well as tourism and gaming, both of which have yet to fully return to pre-Covid EPS (earnings per share) levels,” 2TradeAsia said.

“In addition, the local index breaking above the 6,900 level is 22 percent higher than its October 2022 low, signaling a return to bull market territory.”

The PSEi’s technical momentum shift should coincide with the easing of fundamental pressures, which should help push it past the next major resistances of 7,200 and 7,500.

2TradeAsia said immediate support was at 6,700 and resistance at 7,150-7,200.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said that “currently, any sustained break above the 11-month major resistance of 6,840 levels in the coming days or weeks could potentially hit the 7,000-7,100 levels and the 7,552.20 pandemic again.” able to test. posted on February 9, 2022.”

“Meanwhile, the immediate minor support is pegged at the 6,730-6,820 levels, while the immediate major support levels that help keep the underlying upside momentum intact will be at the 6,590-6,660 levels since December 19, 2022.”