MANILA, Philippines — The Philippine Stock Exchange Composite index (PSEi) is expected to sustain its upward momentum this week with the next break out point seen at 7,500, according to Rizal Commercial Banking Corp. chief economist Michael Ricafort.
Ricafort said the next resistance may hover at 7,263.71, while the next breakout point would be 7,500. “After that, the next important support is at the 6,600 to 6,700 level.’’ he said.
This, Ricafort said, would help keep intact the latest strong upward momentum over the past month.
Last week, the PSEi gained 343.10 points or five percent up for the fourth straight week in five weeks.
From a low of 4,039.15 posted on March 19, the PSEi still gained by a total of 76.6 percent after reaching as much as 80 percent during the week’s high of 7,263.71 on Nov. 23.
Ricafort observed a consistent gap area at the 6,690 to 6,740 range.
Last week, the latest spike in inflation turned off investors.
However, Ricafort said the latest uptick in inflation is expected to be temporary.
“An offsetting positive factor locally is the latest easing in new COVID-19 cases to below 1,000, as well as the recent progress on the CREATE bill, which could be passed into law as early as by end-2020,” Ricafort said.
The markets are also anticipating the final passage/approval into law of the P4.5 trillion 2021 national budget in the coming days.
The expected increase in OFW remittances in view of the upcoming Christmas season could also boost investor confidence in the stock market, Ricafort said.
‘’Further progress on vaccines for COVID-19 that help improve economic recovery prospects and global market risk appetite could also spill over in Philippine equities,” Ricafort said, adding that “ any additional measures to further re-open the economy that help recovery prospects would also be positive for the market.’’