The Philippine stock market is not seen to move significantly in its first trading week of the year as optimism over COVID-19 vaccines is offset by concern over the new and more infectious strain of the virus.
“The local market could move sideways as investors weigh the prospects for 2021,” said Philstocks Financial Senior Analyst Japhet Tantiangco.
He added that, “Economic recovery hopes fuelled by the timely signing of the 2021 national budget, eased monetary policy, and positive business and consumer sentiment towards the succeeding months as per the BSP’s latest survey could encourage buying in the market next week.”
Tantiangco noted that, “Narratives that would point to a sooner availability of the COVID-19 vaccine in the Philippines may provide further boost.”
“On the flipside however, pandemic worries amplified by the new COVID-19 variant and its spread to other countries may continue to weigh on investor sentiment,” he said.
Because of the threat posed by the mutated strain of the coronavirus, 2TradeAsia.com said “Expect corrections in equity prices alongside caseload spikes.”
However, the firm added, “Heed of one of 2020's greatest investment lessons: broad market fear can be quite profitable, if one gets past the shock and awe.”
Tantiangco said that, “Chartwise, the PSEi is expected to test its 7,150 to 7,200 resistance range. It is also expected to test its 10-day exponential moving average, currently at 7,187.46, which currently serves as a dynamic resistance.”
He said “The market’s initial support is seen at its 50-day exponential moving average currently at 6,856.79. After this, its next support is seen at the 6,600 level.”
On the other hand, 2TradeAsia.com sees the market’s initial support at 7,100, secondary at 7,000 while it sees the resistance at 7,300. Stock analysts are expected to start picking out favored stocks for the new year and their recommendations will be reported starting next week.