Volatile trade seen this week

Volatility in the market continues to persist in the face of developing economic conditions and low liquidity in the market.

Unicapital Securities said share prices would likely test the 6,400 resistance level this week.

“We expect the market to trade within a range of 6,100 to 6,400 and recommend accumulation toward the range’s support levels,” it said.

On Friday, the Philippine Stock Exchange index (PSEi) rallied by 196 points or 3.19 percent week-on-week, although average value turnover eased to P4.89 billion, lower by 11.65 percent, as average net foreign selling dropped to P290 million, down 35.84 percent week-on-week.

Stock portal 2TradeAsia, meanwhile, sees immediate support for the index at 6,200, with resistance at 6,500 to 6,600.

In its weekly commentary, 2TradeAsia said moving forward, participants should brace for foreign exchange devaluation, plus capital formation to take a backseat to disinflation efforts.

“This postpones most growth stories to no earlier than 2023, making underrated by resilient bargain plays more rewarding in the long-term. Key is to dig deep – after all, those who struck oil first looked underneath the desert,” 2TradeAsia said.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., for his part said the PSEi managed to eke out gains amid plans by the new administration to resume 100 percent face-to-face classes by November, with a phased-in, face-to-face schooling to start in September.

He said this is considered one of the remaining missing elements to complete the country’s economic recovery from the pandemic as this would help the further recovery of many businesses and industries.

Ricafort sees the next resistance at the 6,500 to 6,600 levels if there would be some selling on rallies. If there would be a breakout, the further upside potential would be toward 6,800 to 7,000, with immediate support at the 6,000 to 6,100 levels.