PSEi ready to breach resistance

MANILA, Philippines — Stocks ended a volatile trading week in the green and looks headed to breach the 7,000 resistance level anew amid renewed optimism, traders said.

Buoyed by record highs in global trades,the Philippine Stock Exchange index (PSEi) would retest the 7,000 psychological resistance, this time with a better outlook for the second half of the year supporting the buying thesis, online stock portal 2TradeAsia said in a market commentary.

Wall Street notched broad gains on Friday, with the S&P 500 index closing at a record and global shares also finished at an all-time high, while oil prices rose for a fifth straight week.

2TradeAsia said it sees the immediate support for the PSEi at 6,800 after closing higher to 6,950.51 last Friday.

“Renewed optimism pushed local shares to higher terrain as the US Fed reiterated its support for lower interest rates and that above average inflation is merely transitory,” 2TradeAsia said.

The PSEi rose 1.45 percent week-on-week. Average value turnover, however, eased to P6.05 billion while average net foreign selling declined to P490 million.

Japhet Tantiangco, an analyst at PhilStocks Financial Inc., said that for this week, investors are expected to watch out for the government’s quarantine classification decisions after June 30.

“Further easing of restrictions may push the market to a positive close this week. Till the government’s decision, the market is seen to move sideways while investors look for clues or hints on what the new quarantine measures will be. Investors may also watch out for the upcoming IHS Markit Philippines Manufacturing PMI for clues on how the local economy is faring,” he said.

Moving forward, investors may also monitor Wall Street to see if it would be able to sustain its robust performance last week.

“If it is able to do so, then it may have positive spillovers for the local bourse,” Tantiangco said.

Chartwise, he said if the market holds its ground at 6,900, then this is seen to become its new support while its resistance is at 7,300. If the market fails to, however, then 6,900 is seen to remain as a resistance while support is seen at 6,600, he added.