MANILA – Online stockbroker COL Financial Group expects the Philippine Stock Exchange index (PSEi) to recover to 7,500 to 8,250 level this year after reconfiguring into a corrective consolidation.
In a press briefing Tuesday, COL chief technical analyst Juanis Barredo said the PSEi has seen a viable bottom and now moving on its first major rally off such a base.
“Given its stretchiness from its October-January rebound, we may need to prepare for some corrective but temporary maneuvering soon. There is still a chance though that the rally could extend perhaps until mid-February –which may be a good reason to stay fairly positioned, not to mention that the worst seems to be over,” he said.
Barredo said the PSEi was recently overbought when it reached price channel highs of 7,100 to 7,200.
“This could drive some interim need to pull back to range lows or support. We see this first at 6,850-6,650 then 6,400-6,200. Accumulate into pullbacks as we look to eventually target index levels back to 7,500 – 8,250,” he said.
The PSEi closed at 6,566.39 points in 2022.
COL chief equity strategist April Lynn Tan cited “compelling reasons” why Philippine stocks should continue to go up this year.
“Inflation is on the way down and is expected to push the Fed (Federal Reserve) and the BSP (Bangko Sentral ng Pilipinas) to cut rates,” she said.
Tan said these are expected to lead to lower bond rates and a weaker dollar.
Barredo said the United States and Philippine bond yields have adjusted down as US inflation began to slow.
“USD (US dollar) index also shows some capacity to rally after being battered into major support; same goes for the USD-PHP (Philippine peso) whose major support stands at 54.20… a short-term rally towards 56 to 56.75 could surface,” he added. (PNA)