Uptrend expected to continue

The stock market is expected to continue its upward momentum this week, boosted largely by the traditional month-end window dressing, analysts said.

Justino Calaycay of Philstocks Financials said the upward momemtum may continue but it may be short lived as the Chinese ghost month will soon set in.

“Traders said Monday’s trades may keep the momentum going as sentiments ride on traditional month-end window dressing. But more likely, optimism is keenly keeping an eye on corporate profit reports expected to begin rolling out next week with the bulk, including those of the heavyweights, coming in approaching mid-week of August,” he said.

But then again, August brings in another tradition — the Chinese ghost month, which falls between Aug. 22 and Sept. 19.

“All said, optimism continues to flow in the market, boosted further by the breach of the 8,000 mark. The onus on validating this surge now rests on second quarter earnings. This will become the fulcrum on which trades will turn in the coming weeks,” Calaycay said.

Market investors are also keenly awaiting the upcoming initial public offering (IPO) of Chelsea Logistics Holdings Corp. (CLC), the logistics company of Davao-based businessman Dennis Uy,

CLC will list on Aug. 8 and while its offer period has yet to end on Monday, investors have already swarmed the transaction.

Uy said on Saturday the deal is three times oversubscribed.

Last week, the market barometer rallied anew for the second straight week by 1.02 percent to 8,071.47 as market players positioned ahead of the first half 2017 corporate earnings report, anticipation of passage of a tax reform plan, and accelerated infrastructure spending program of the government, said Jonathan Ravelas, chief market strategist at Banco de Oro.

This comes on the heels of President Duterte’s second State of the Nation Address as he reiterated the government’s direction and plan which investors took positively, Ravelas said.

“Chartwise, the week’s close at 8,071.47 signals a breakout from a three- month long consolidation between the 7,700 and 8,000 levels. This could push the market to test the 8,100 to 8,150 levels initially. But it has the momentum to bring it up to 8,300 levels. Immediate support and resistance is seen at 7,950 and 8,150 levels, respectively,” Ravelas said.