Market may seek support at 5,830 level

 

After closing stronger last week, the Philippine Stock Exchange index is seen getting immediate support at the 5,830 level, according to Rizal Commercial Banking Corp. chief economist Michael Ricafort.

He said the 5,700 to 5,800 levels have been proven to be a strong support during the period of consolidation over the past one to two months, partly supported by the near record low local interest rates.

“The next resistance is at 6,000 to 6,150 levels, which serve as an important gateway, especially if there would be a sustained breakout beyond the familiar two-month consolidation or base-building range of 5,700 to 6,100,” Ricafort said.

Last week, the PSEi gained 160.74 points or 2.7 percent   after declining for two straight weeks.

“Since the start of 2020, the PSEi declined by 23.2 percent versus 7,815.26 in end-2019. It is among the worst-performing stock markets in the ASEAN and Asia,’’   he said.

In all, the PSEi gained for the third straight day, up for the first day in five days by 54.53 points or 0.9 percent to close at 5,999.40, the highest in more than two weeks since Sept. 15.

Ricafort said some easing in the new local COVID-19 cases recently, although relatively modest, also partly supported sentiment on the local financial markets, including the PSEi.

Moving forward, Ricafort said investors are anticipating  a Santa Claus rally toward the end of the year.

Any further positive developments on vaccines for COVID-19, as well as the easing of quarantine measures, are also expected to boost the market, he said. 

-Iris Gonzales (The Philippine Star ) 

Source: Peso Economics