Market to retest 8,000 level this week

The market could further retest the 8,000 level this week, as investors recalibrate their portfolios, traders said over the weekend.

Noel Medina, research and finance analyst at HDI Securities, said investors are likely to remain cautious.

“The market slump caused by the unabated foreign selling had been overwhelmed by bargain hunters who bought oversold blue chips with stable growth potential. We can expect investors to remain cautious considering the probable monetary policy adjustments brought about by the inflationary pressures and weakening currency,” he said.

Jonathan Ravelas, chief market strategist at BDO, said last week’s close suggest a further decline of the benchmark Philippine Stock Exchange index.

“Chartwise, the week’s close at 8,238.15 signals further tests toward the 8,000 to 8,100 levels. Any pullback, if any, could be limited to the 8,300 to 8,350 levels,” he said.

Last week, the PSEi fell 1.6 percent week-on-week for the fourth straight week to 8,238.15 as the general rise in interest rates and expectations of higher inflation are driving investors to stay on the sidelines and recalibrate their portfolios. The local stock market printed an intra-week low at 8,156.19.

“Immediate support and resistance is seen at 8,100 and 8,800 levels, respectively,” Ravelas said.

Chris Mangun, head of research at Eagle Equities, agreed the market may continue to take a loss.

“The market lost more than 100 points this week as the market broke below our support levels. The chart shows a volume spike this week which can be viewed as a selling climax. If we lose another 100 points this week then we are officially in a correction as we will be down 10 percent from the high. We may continue to see the market take a loss, but I think we will see a reversal sometime in the second quarter. I am adjusting supports and resistances accordingly,” he said.

The PSEi was on a rollercoaster last week as it gained almost one percent on Monday, then saw a quick turnaround to lose more than 300 points in the following days.

It then recovered 80 points on Friday to close at 8,238.15. The market traded a whopping P19.69 billion on Friday, Mangun noted.