STOCK-MARKET OUTLOOK

Last week

Share prices soared last week, with the main index reaching 6,400 points as investors took their position ahead of the third quarter reporting season.

The benchmark Philippine Stock Exchange index (PSEI) gained 585.59 points to close at 6,484.06 points.

The main index was up all week long, gaining at least 1 percent per trade and went as high as 2.7 percent.

Analysts said investors are preparing for the third quarter financial reporting of large firms that will start this week.

Foreign investors were net buyers at P20.58 million as average daily trading also soared to P7.88 billion.

Broker 2Tradeasia said the average turn- over was up 54 percent for the week, but this is still relatively tepid compared with the rallies in the previous year.

“We note that this pace is more sustainable, especially amid uncertainties of the macro backdrop today,” it said.

All other subindices ended in the green led by the All Shares index that closed 278.04 points higher to end at 3,859.95 points, the Financials index gained 97.02 to 1,274.74, the Industrial index added 611.88 points to 8,628.44, the Holding Firms index rose 686.63 to 6,722.05, the Property index soared 362.49 to 3,137.75, the Services index increased 18.66 to 1,460.71 and the Mining and Oil index was up 307.52 to 7,705.73.

For the week, gainers led losers 168 to 65 and 19 shares remained unchanged. Top gainers were PXP Energy Corp., Discovery World Corp., LT Group Inc., Keppel Philippines Properties Inc., Jollibee Foods Corp., PH Resorts Group Holdings Inc. and Phoenix Petroleum Philippines Inc.

Top losers were Atok- Big Wedge Co. Inc., Apex Mining Co. Inc., Philippine Racing Club Inc., Abra Mining and Industrial Corp., Manila Mining Corp. B. ACE Enexor Inc. and Now Corp.

This week

Share prices may go down this week as investors may decide to sell to cash in on the gains they made in the previous week.

“With the quick surge, however, the local bourse is now at the overbought territory making it susceptible to profit taking. Thus, we may see a pull back in next week’s trading. Still, the PSEI may hold its ground at the 6,000 to 6,100 support range buoyed by optimism towards the further easing of restrictions on economic activities,” Japhet Louis O. Tantiangco, senior research analyst at Philstocks Financials Inc., said.

“Investors could also look towards the upcoming data for further cues including the Philippines’s September money supply and bank lending data, and third quarter corporate reports. The local market’s resistance is seen at 6,600."

2Tradeasia, meanwhile, said the main index's next hurdle is to go past the price gap of 6,600 points and 6,750 points, which it made during the stock market collapse last March.

“We continue to harp that in investing, the key is time and not timing. No one can perfectly jump in on market valleys and cash out on peaks, but decent enough win rates can be met by simply riding out market cycles while holding on to reliable value plays,” it said, adding that the goal should be the expected market bounce in 2021 and 2022.

It sees immediate support for the main index at 6,000 points and resistance between 6,750 and 6,500.

Stock picks

Brok er Regina Capital Development Corp. advised investors to take profits on the stock of Jollibee Foods Corp. (JFC) after its successive days of winning streaks that saw it breaking the past resistance levels and all of its moving averages.

“At this point, all indicators are pointing to JFC already being heavily overbought which could prompt profit taking soon. However, it looks like buying momentum is starting to wane; volatility is extremely high relative to the past few weeks. Should profit-taking occur, the selldown would be quick. Now would be as good a time as any to slowly take profits,” it said.

Jollibee shares closed Friday at P179 apiece.

Meanwhile, the broker gave the same recommendation on the stock of Bank of the Philippine Islands (BPI) as it broke out past the resistance P67.60, closing at a high of P69.

“This brings the next resistance to P69.80, its 200- day moving average. Indicators are all on strong buy signs. It is a few points away from being considered overbought, [while the stock] is displaying strong buying pressure, but with slowly waning momentum. Volatility has only just started to pick up. Since the stock has yet to be deemed overbought by most indicators, the upturn may carry over [in the succeeding trading sessions]. Watch out for possible pullbacks should BPI tread closer to P69.80,” it said.

BPI shares closed last week at P74.40 apiece.