Stocks are expected to take a pause from a six-day rally that sent the benchmark index near the 8,000-point level last week.
Regina Capital Development Corp managing director Luis Limlingan said the market would likely trend sideways, with a downward bias within the next two weeks, after reaching an overbought level above 7,700 points.
“On worst case scenario, we would sell pullbacks to 7,584 level within the same time frame, assuming current volatility levels are constant,” Limlingan said.
F. Yap Securities investment analyst Jason Escartin said temporary pauses were anticipated as players digested the impact of power outages on the economy and contingency measures to ensure economic growth would not be stalled.
“Speculative shares might take the limelight, in view of the technical recovery in crude futures prices. Also, talks of possible shift to other safer havens such as metals could heighten interest for metal-related stocks,” Escartin said.
The immediate support is projected at 7,750 to 7,800, while resistance is seen at 7,900 to 7,950.
The bellwether Philippine Stock Exchange index closed at 7,825.39 on Friday, up 0.7 percent week-on-week while the broader all-shares index gained 0.7 percent to end the week at 4,537.06.
The PSEi advanced to a fresh all-time high on Friday by logging a record high of 7,840.39 during the intra-day trading, as investors were elated by rosy prospects on domestic corporate earnings.
Except for financial and mining and oil, all major sub-indices ended in the green, led by property, which rose 1.8 percent and holding firms which advanced 1.1 percent.
Foreign investors were net buyers by P1.22 billion last week, as total overseas buying reached P12.99 billion, exceeding total overseas selling of P11.77 billion.
The average daily value traded dropped to P6.8 billion from the previous week’s P11.25 billion, because of the Chinese New Year holiday.
Top gainers last week were Unioil Resources & Holdings Co. Inc., which jumped 46.4 percent to P0.52; Forum Pacific Inc., which climbed 21.6 percent to P0.365; and Crown Equities Inc., which went up 14.8 percent to P0.147.
Heavy losers were Concrete Aggregates Corp “A” shares which lost 28.3 percent to P43; Sun Life Financial Inc., which declined 15.2 percent to P1,200; and Vivant Corp., which fell 12.6 percent to P20.1.