PSEi to track local pandemic situation
THE coronavirus disease 2019 (Covid-19) situation in the country will continue to be the background for this week’s trading, analysts said.
Philstocks Financial Inc. senior research analyst Japhet Tantiangco still expects a downward bias for the local bourse amid lingering pandemic woes as daily Covid-19 cases continue to remain high.
The Philippines recorded 11,101 new Covid-19 cases on Saturday, bringing the total tally to 926,052.
Tantiangco added that uncertainties are also clouding the country’s vaccination program as the government struggles to obtain vaccine supplies.
“The continuous surge in Covid-19 cases and the vaccine roll out uncertainties are weighing on our economic and corporate outlook. This in turn is seen to keep the negative sentiment this trading week,” Tantiangco explained in a text message.
Trading could also remain lethargic, according to Tantiangco, as investors might opt to stay on the sidelines as they wait for catalysts that could lift the market’s bias.
Chartwise, Tantiangco said the gap between the main index’ 50-day and 200-day exponential moving average (EMA) continues to narrow.
“If the 50-day EMA continues its cross below its 200-day counterpart, it will form a Death Cross, which signals a possible downtrend for the market moving forward,” he noted.
The market’s immediate support is seen at 6,100, immediate resistance is at its 10-day exponential moving average, which was at 6,526.87 last week, while next resistance is seen at 6,600.
Rizal Commercial Bank Corp. chief economist Michael Ricafort in an email said the market has been in consolidation mode and confined in the range of 6,400 to 6,600 levels for more than a month already.
Ricafort noted several local leads and catalysts, which also includes the trend in local pandemic cases.
He said daily Covid-19 cases continue to log near record highs, which could lead to prolonged tight quarantine restrictions and could slow down economic recovery prospects.
Ricafort likewise added that progress in the country’s vaccine rollout could also be a market catalyst, along with release of some economic data.
The benchmark Philippine Stock Exchange index (PSEi) slipped by 0.69 percent or 45.15 points to close at 6,494.81 on Friday as investors booked profits after the market’s back-to-back rally.