SHARE PRICES are seen to move within a narrow range in the week ahead, with analysts banking on an increase in trading volume for the main index to sustain its upward trajectory.
The 30-company Philippine Stock Exchange index (PSEi) gained 0.66% or 48.60 points to close at 7,399.18 on Friday, marking a 2.96% or 212.47-point improvement from the week before. Holding firms and financials supported the market last week, rising 4% and 3%, respectively.
Despite the increase, the PSEi still saw little participation as turnover only reached P24.59 billion, flat from a week ago. Foreign net selling reached P1.62 billion, slightly higher than the P1.59-billion net outflow recorded from July 2-6.
“The month of July is looking brighter and brighter as the index had another good week… We are looking at two scenarios next week. The first is that we start to see volume come in, and the index is going to try and test the next resistance at 7,500,” Eagle Equities, Inc. Research Head Christopher John Mangun said in a weekly market report.
Mr. Mangun noted that reaching the 7,500 resistance will confirm the PSEi’s reversal, as well as put an end to the bear market.
“The second scenario is that investors will take gains as several blue chips have gained 10% in the last two weeks and we will see the index come back down to support at 7,185… Based on the market sentiment, the latter scenario is more likely to take place. However, the pullback that we may see next week is a great opportunity for more investors to test the waters,” Mr. Mangun said.
Meanwhile, online brokerage 2TradeAsia.com said investors will focus on developments in the escalating trade war between the United States and China. US President Donald J. Trump last week announced additional dues on $200 billion worth of Chinese goods. China has yet to retaliate from this fresh round of tariffs.
“Resolutions that would put clearer guidelines in resolving the US-China trade row will be a boost for equities, having regressed from its recent high this year. This issue is something that investors will have to deal with on a daily basis, pending clearer outcomes of talks,” 2TradeAsia.com said.
It added that earnings results for the first half are soon to be released, advising investors to hunt for stocks with “good fundamental merits and solid upside potential.”
Eagle Equities’ Mr. Mangun expects support to be at 7,340 down to 7,185, while resistance could reach 7,400 to 7,500.
US stocks rose slightly on Friday, putting the S&P 500 at its highest closing level in more than five months, as gains in industrials and other areas offset a drop in financials after results from three of the big banks mostly disappointed.
The Dow Jones Industrial Average rose 94.52 points or 0.38% to 25,019.41; the S&P 500 gained 3.02 points or 0.11% to 2,801.31; and the Nasdaq Composite added 2.06 points or 0.03% to 7,825.98. — Arra B. Francia with Reuters

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