Market to test 6,400 resistance level

MANILA, Philippines — After last week’s strong run, the Philippine Stock Exchange index (PSEi) is seen testing its immediate resistance at the 6,400 level this week.

Philstock Financial attributed the market’s performance last week to the slowdown in US inflation and the anticipated pause in the Bangko Sentral ng Pilipinas’ (BSP) monetary tightening.

At the same time, Philstocks cautioned that overall, the market is still on a downtrend and value turnover has remained tepid, implying that recent runs still lacked conviction and that investors are advised to remain careful.

“Recently, the local currency has been strengthening against the US dollar while oil prices in the global market have been downwardly biased. Sustaining these positive developments may help the local market in next week’s trading. Chartwise, the market is expected to test the validity of its breach of its 50-day exponential moving average. If it is able to hold its position above the said line, then this will be considered as its immediate dynamic support. Resistance is seen at the 6,400 level,” Philstocks said.

Last week, the PSEi closed 50 points higher to 6,211 week-on-week. Average value turnover slightly eased to P3.52 billion or down by 3.13 percent week-on-week. Foreigners turned net sellers to P21 million on average, compared to P17 million in net buying the previous week.

2TradeAsia attributed the local bourse’s upward movement to the positive US inflation print. It tumbled to 3.2 percent in October, the first decline in four months, and was also marginally below expectations of 3.3 percent.

Moving forward, 2TradeAsia said the BSP maintaining rates – albeit cautious with inflation guidance – should allay anxieties, especially from a modeling standpoint heading into 2024.

It added that this quarter’s earnings season, as expected, showed mixed but positively in-line results for its monitored stock universe.

The online stock market portal said “economic indicators are stabilizing and that corporate fundamentals are showing resilience.”

It sees immediate support at 6,000 to 6,100, with resistance at 6,300 to 6,400.