While there is still momentum in the local stock market from last week’s rally, its sustainability will hinge on whether there will be more positive news on COVID-19 vaccines and the US stimulus package.

BDO Chief Market Strategist Jonathan Ravelas said that, after hopes of a vaccine fueled last week's 5.05 percent surge in the PSEi, it “appears the rally still has some gas to try the 7,300 levels.”

However, he warned that, “Failure to clear said levels could call for a retest of the 7,000 levels anew.”

Online brokerage firm 2TradeAsia.com sees the market’s next resistance level at 7,200 to 7,350 and then at 7,500.

However, it said that, “Hurdling these resistances will be dictated by vaccine headlines and stimulus injections, as investors temper their optimism with vigilance.

The firm noted that “market players would have to digest the economic team anticipating extended quarantine restrictions for most, if not all of 2021, as vaccines are not expected to be deployed until the third or fourth quarter.”

“Granted, restrictions moving forward are likely to be more relaxed, but a longer waiting game exposes the market to possible new waves of COVID cases and stretches the cash burn for sub-optimally operating business units,” 2TradeAsia.com said.

Meanwhile, Philstocks Financial Senior Analyst Japhet Tantiangco said investors will also have to chew on recent data showing higher unemployment, lower bank lending, and higher inflation.

“So far, our data are still conveying a challenged local economy as the recent typhoons aggravate our pandemic-stricken situation. Chartwise, the PSEi has so far been unable to sustain its ground at the 7,150 level. With these, we see a downward bias for the local market in next week’s trading,” he noted.

Tantiangco added that, “Investors are expected to look towards the upcoming economic data including our September foreign direct investments and October foreign trade for further clues on our economic condition.”

While casinos are not allowed full operations yet, Abacus Securities Corporation is recommending a buy on the shares of Bloomberry Resorts Corporation as it is an attractive post-pandemic play given its hefty discount to its regional peers.

Another reason for the recommendation is the introduction of the digital yuan or e-RMB which may give the Chinese government broader oversight to the cash flows in Macau and this might discourage high rollers from playing in the gambling hub.

“This makes the Philippines a potential destination,” said Abacus noting that even a fraction of Macau’s $17 billion annual gaming revenues “should be a huge positive to the domestic gaming industry and could help hasten its recovery.”

Abacus is also recommending Robinsons Land Corporation on news that it is planning a real estate investment trust offering backed by an office portfolio worth $2 billion.

The brokerage noted that the amount is already about the same as the market capitalization of RLC itself and means that, at its current market price, “investors right now are essentially getting the mall business (which is bigger) for free.”

Meanwhile, COL Financial is rating First Philippine Holdings Corporation a BUY even without considering its recent plan to make a tender offer for the publicly-held shares of Lopez Holdings Corporation.

“Given FPH’s 68 percent ownership in FGEN, we view FPH as a cheaper way to own FGEN. FPH is trading at a huge 62 percent discount to its market-based net asset value of P162 per share,” the online brokerage said.