While investors in the local stock market are growing more bullish amid expectations of easing rate hikes, there may be periods of profit-taking while share prices may also be swayed by the release of some US and Philippine economic data.

“The case for optimism continues to build up for the local bourse amid hints that the Federal Reserve and the Bangko Sentral ng Pilipinas may slow down with their monetary tightening soon,” said Philstocks Research Manager Japhet Tantiangco.

He noted that, “Adding to this is the improvements in the movement of our local currency against the US Dollar. Chart-wise, the local market has been able to maintain its position above the 6,400 level and has gotten past its 200-day exponential moving average last week.”

“However, the market has already been rallying for six straight weeks. With this, we may see episodes of profit taking moving forward,” Tantiangco warned.

He said investors may also take cues from the upcoming bank lending and S&P Global Philippines’ Manufacturing PMI data for clues on the local economy.

“The coming week will be big for US market data, likely to rouse another round or volatility before the curtain closes for 2022,” said 2TradeAsia.com.

It added that, “Labor and manufacturing data will be the highlight amongst market drivers next week, which should impact Fed movements not only on the December FOMC (December 14th) but at least for the first quarter of 2023.”

“While we do not expect a sharp pivot, inflation indicators are showing some hint of cooling in the past weeks (e.g., factory gate price data, petroleum product prices, shipping costs),” 2TradeAsia noted.

Meanwhile, the brokerage said “Next weeks shortened trading week plus end-of-month window dressing should help prop-up momentum heading into 2023.”

As earnings rise with the reopening of the economy, many companies have seen their share prices rise after filing their third quarter financials.

However, there are some laggards that Abacus Securities Corporation sees some stocks that have good prospects and expects share prices to catch up soon.

“We have positive views on three, namely MacroAsia, Max’s Group, and Security Bank. We believe the fundamentals are there for all three,” the brokerage said.

It noted though that MacroAsia is a unique play because it is the only airport services stock in the country even as Filipino consumers are spending more for recreation and this should benefit travel-related businesses.

Abacus also pointed to the firm’s catering business which is growing due to a rise in non-airline clients.

Meanwhile, COL Financial also favors Max’s as it upgraded the fair value of the stock to P9.53 per share from P8.45 a share. “We expect MAXS to benefit from seasonal uptick in spending during the fourth quarter and the continued reopening of the economy,” it noted.

Abacus and COL also like Puregold even though it has already rallied 32 percent from its pandemic low last October. “Earnings are likely to continue its momentum heading into its strongest month in the fourth quarter,” it noted.

“We are raising our fair value estimate on PGOLD to P55.60 per share as we roll over our estimates to 2023 and maintain our BUY rating on the stock,” said COL.

It added that, “We continue to like PGOLD as it remains well-positioned to capitalize on improving mobility trends despite near term headwinds from high inflation and the weaker peso. Despite near-term headwinds from high inflation and a weaker peso.”