Index stocks push for short trading week

Trading at the local market is seen to be slow with a slight upward bias because of the shortened work week and analysts are recommending a trading buy on index stocks.

Abacus Securities Corporation Technical Analyst Lawrence Gonzaga said recommends a trading buy for Ayala Land near its support levels of R39.00 and R39.80 while watching the resistance at R43.35 and R46.00.

He also recommended buying Semirara Mining near the support levels of R29.60 and R29.10, Manila Electric Company if it breaks R340, and Security Bank which may rally if it crosses its 50-day moving average of R211 per share.

Abacus also likes Petron Corporation because of the higher valuation of its Malaysian unit which also means that its domestic business is priced far lower than rival Pilipinas Shell “despite having dominant market position.”

Also based on technical indicators, Regina Capital Development Corporation is recommending DMCI Holdings due to its strong trading momentum with a weekly target of R12.00 per share and SM Prime if its support at R37.17 holds.

“For next week, we see continued sluggish value turnover because of the shortened work week. In the US, we will be taking our cues from the CPI, Crude oil inventories, FOMC meeting announcement, jobless claims, retail sales among many others,” said Regina Capital Managing Director Luis Limlingan.

He noted that, “the EU will also make announcements from their very own ECB. The 44th G7 summit will be held in Quebec this weekend. Several key points of market interest will be discussed at the meetings and could influence the movements for the beginning of next week. Locally, we will just be awaiting the latest OFW remittance data.”

For his part, Eagle Equities Research Head Chris Mangun said that, because inflation was below the estimate of the Department of Finance (DOF), this “has calmed the jitters that investors have been experiencing in the last few months.”

Thus, Mangun said “the market continues to show signs of recovery after bouncing off the 7,500 support line last week. If it can sustain this momentum, we will start to see a reversal to test resistance at 8,000.”

“With only three trading days next week due to the holidays, the index will continue in this congestion area between 7,500 and 7,830 on low volume. The following weeks are going to be very crucial as investors will decide to start coming in or to stay on the sidelines and wait for a catalyst,” he added.