Analysts believe that this trading week, investors are looking for profitable deals even at the bottom of the barrel.
After two days of decline, the Philippine Stock Exchange Index rose 9.92 points, or 0.2 percent, last Friday, July 1, 2022, to close at 6,165.35.
According to Philstock Financial Inc. senior analyst at Japhet Tantiangco, the market has been declining for four consecutive weeks with a total loss of 8.54 percent. As such, they are expecting episodes of bargain hunting this week.
“The market may still be bearish due to continued downside risks to the local economy. On the chart, market support is visible in the range of 6,100-6,150. Resistance is visible in the range of 6,350-6,400,” Tantiangko said. in his analysis.
Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael Ricafort and 2TradeAsia noted that investors are expected to look to the upcoming June inflation data, with inflation data well above May’s 5.4%, which could lead to increased selling pressure in the market.
They said that the peso/dollar exchange rate is already at 55 pesos:1 dollar and further depreciation of the local currency will put pressure on the market. In addition, the market may also be guided by the upcoming data on the Philippine labor market and concerns about the global economy amid tighter monetary policy of the Federal Reserve System (Fed) and rising commodity prices caused by the war between Russia and Ukraine.
Regarding other external US catalysts, Ricafort pointed to the following: Fed/Federal Open Market Committee minutes; factory orders; orders for durable goods; trade deficit data; data on applications for unemployment benefits; jobs/employment data; consumer credit; consumer price index/inflation data.
For Ricafort, support is seen at the psychological level of 6000, and immediate resistance is seen at the levels of 6300-6500.
For 2TradeAsia, the immediate support is seen at 6,100-6,000 and the immediate resistance is at 6,400.