The local stock barometer is seen aggressive to stay above the 8,000 level and revisit recent highs.
Last week, the main-share Philippine Stock Exchange index (PSEi) trodden up by 65.27 points, or 0.82 percent, to close on Friday at 8,055.47.
Local stock brokerage Papa Securities stated resistance remained at the recent high of 8,139 but it’s “highly likely for this to be breached in the coming days,” citing clarity in the monetary policy of the Bangko Sentral ng Pilipinas (BSP) and the dovish tone of the US Federal Reserve (Fed).
It noted that the relative strength index, a crucial technical indicator, remained strong and not yet at the overbought level.
After a “prudent pause” during the monetary setting last week, British banking giant HSBC expects the BSP to resume monetary easing by August with a 25-basis point interest rate cut.
An added 100-basis point reduction in the reserve requirement is likewise anticipated in the fourth quarter.
HSBC economist Noelan Arbis noted there was scope for further monetary easing ahead, “given relatively tepid domestic growth, a less hawkish Fed, and a more benign inflation trajectory in the second half of the year.”
For the PSEi, AAA Equities head of research Chris Mangun said that after hovering close to the 8,000 level in the last four weeks, the next resistance would be at 8,150, which was last hit in January.
“A successful break above this level will trigger a bull run which may lead back to the previous all-time high of the PSEi at 9,000,” Mangun stated.
“However, the main index has ended positive for the last five weeks which means there is a strong possibility that we will see a pullback (this) week,” he said.
Nonetheless, Mangun stated he was confident of a market rally soon.