Currently on a five-week winning streak, the local stock market will be looking to large-cap earnings reports to see if the 7,000 resistance level will be breached this week.

“The local market is already running on a 5-week winning streak with a total gain of 6.30 percent. Chartwise, the market has been closing in on its resistance at 7,000,” said Philstocks Financial Research Manager Japhet Tantiangco.

He noted though that “trading remains anemic as seen in the low value turnover, implying that many are still on the sidelines.”

Tantiangco expects the local market could move sideways this week as “we may see strong selling pressures as investors take profits from the market’s preceding 5-week rally. On a positive note, optimism towards our corporate sector’s fourth quarter and fiscal year 2023 results may continue to provide support to the bourse.”

“Record high performances from Wall Street, if continued, may also produce positive spillovers that would help the local market. Investors may also watch out for the upcoming S&P Global Philippines Manufacturing PMI for clues on how the local economy has been faring,” he added.

Online brokerage 2Tradeasia.com said, “fourth quarter 2023 earnings have been mostly impressive so far… and expansion guidance have been consistently more aggressive relative to last year.”

“Note that next week will be heavy on large caps' earnings, led by the SM Group (BDO, SM, SMPH) and power giant MER; brace for likely intraweek swings as these make up 45 percent weight on the index,” it noted.

2Tradeasia.com also said that “the PSEi has so far held on to the 6,900 level, and is even showing signs of potentially being able to out-stamina the selling pressure around the 7,000 mark."

"The question of rates going down later in the year (and by how much) is a major force impacting this run, amid significantly improved earnings across sectors; expect more of this heightened volatility as the market attempts to price out this 'tension,” it added.

For stock picks, Abacus Securities Corporation is recommending investors to accumulate shares of D&L Industries because “we believe it has the potential to rally in the near-to-medium term given its outlook for 2024.”

“We do think the company is set for a stronger year after a tepid 2023 which was attributable to the prevailing economic conditions at that time. This makes us further recommend DNL especially for those with a longer term horizon as is prospects have continued to point upwards,” it said.

For its part, COL Financial has a BUY rating for SM Prime Holdings which as “we remain positive on its malls business but will keep a close eye on residential as take-up sales slow. We maintain our BUY rating on SMPH with a fair value estimate of P43.20.”

COL Also has a BUY rating for Ayala Land because “earnings growth was strong last year despite higher interest rates. This year, expectations are for rates to come down in the second half and this should benefit the biggest residential developer in the Philippines.”

Meanwhile, it noted that “the malls segment remains robust, and the office leasing segment continues to improve despite a difficult operating environment. Overall, we believe ALI to be a major beneficiary of lower interest rate expectations this year.”