Some stocks remain strong despite choppy trading

Volatile trading is expected at the local equities market this week although stock analysts remain positive about the longer term.

Abacus Securities Corporation said the market may experience choppy action near-term but some stocks like MacroAsia and Wilcon are strong despite the global selloff.

BDO Chief Market Strategist Jonathan Ravelas noted that “market barometer PSEi fell by 3.49 percent week-on-week to 8,503.69 for the second straight week on continued sell-off in global stocks led by Wall Street as investors have yet to get comfortable with the higher interest rates.”

“Chartwise, the week’s close at 8,503.69 suggests the market to range between the 8,350-8,700 levels in the near-term. Immediate support and resistance is seen at 8,300 and 8,800 levels, respectively,” he said

Eagle Securities Head of Research Chris Mangun said “we are currently down 2.9 percent for the month of February but I have no doubt that we will a recovery before the end of the month.”

He added that, “I will not be surprised if we lose another 200 points next week. However, I am also confident that if we do, we will see it hold our major support at 8,300. If this scenario plays out, we will see the index bounce of that support line and break above 9,000.”

Mangun explained that this is called a “bear trap” and is beneficial for our market as more of the “weak hands” will be shaken out. A bear trap is a false signal that the rising trend of a stock or index has reversed when it has not.

“Price gyrations are part of the cycle in equities investing. With Macro fundamentals intact, it is important to embrace the bigger picture than adopt a reactionary approach,” said 2TradeAsia.

The firm advised that, “the key strategy is to accumulate prime stocks set to perform within an acceptable price band and stay alert for entry-exit levels. Immediate support is 8,400, resistance at 8,600 to 8,650.”

Regina Capital Development Corporation expects support levels to be at 8,400. “This is one of the strongest supports, but indicators show that this could get lower… We maintain our range trade recommendation,” it added.

“Investors may look to sell into rallies as the market may encounter resistance near 8,603 and 8,746. The technical picture of global markets looks jittery,” it added.