ILOILO City – Last week, the Philippine Stock Exchange index (PSEi) closed at 7,970. Despite the positive news, however, the market still has a long way to go before it can fully return to bullish territory.
According to local stock market technical analyst Hernan Segovia, recovery back to the 8,000 level is good for the market but unless it can break past the 8,400 level, it may still fall back to lower benchmarks.
“Again, that’s the key level (8,400) that the index should break, because it has been tested a few times already, and the market succumbed to profit taking again,” Segovia said. “So if the market goes above 8,000 level, the question will be if it sustains toward 8,400.”
Despite this, Segovia is confident that the market will perform well in the coming weeks. He cites a combination of low oil prices and a strong peso as having positive effects on inflation, which in turn will help to buoy the market’s growth.
“So right now, we have positive sentiments. We have seen fuel prices going down, especially the global oil price. We have seen it broken down to 56 per barrel I think, then we saw a stable peso. Hopefully, we go down below 52. And that equates to a softening of inflation. So I think that the catalyst for the positive sentiment for the market are those things,” Segovia said.
If his expectations do pan out then the investors and traders may want to position themselves for a potential “bull market.”/PN