Stock market to sustain winning streak this week

The stock market is seen sustaining its winning streak this week as investors are likely to continue to scout for bargains.

Jonathan Ravelas, market strategist at BDO, said a sustained climb above the 7,800 levels in the near term could retest the 8,000 mark.

On the other hand, he said failure to stay above 7,800 could call for further losses toward the 7,500 levels.

“Last week, the market barometer PSEi rose 1.53 percent week-on-week for the fourth straight week to 7,819.39 on foreign portfolio flows returning to the local markets as they find bargains on cheaper valuations of selected counters in the market,” Ravelas said.

Astro del Castillo, managing director at First Grade Finance Inc., said foreign buying helped bring back investors into the market as domestic buyers also found their return a positive sign.

On the other hand, Chris Mangun, head of research at Eagle Equities, said the PSEi is currently up 12 percent since it bottomed out a few weeks ago and may see a pullback this week.

Mangun said it’s also not good if the market goes up too fast.

“This is the fourth week in a row that the index closed higher. We don’t want to see the market go up too far too fast as this can reverse and cause a big swing to the downside. However, the market will do what it wants to do. Based on the technicals, we may see the index continue to surpass resistances. The 7,820 level is heavy resistance after bouncing off the level three times between May and June,” Mangun said in a report.

“Immediate support comes in at 7,650. We will continue to see investors flood in to blue- chips that were laggards last year,” Mangun said.