Hope everyone had a good and refreshing weekend. The PSEi returns to action once again and here are some key insights on what could happen to the index this week.
The PSEi or even the Philippine stock market as a whole is expected to trade sideways this week. The sideways movement of the market is still mainly due to the fact that investors continue to be wary of the possible US interest rate hike which will take place next month. There is an increasing sentiment that the interest rate hike will actually take place.
Last week saw the Philippine stock market gain strength after the release of the 3Q gross domestic product (GDP), this was 4 percentage points better than the forecasted 6.7% GDP growth, the actual number was 7.1%. The strength was seen as temporary, the market actually had 3 straight winning days right after the 3Q GDP was announced, however, as of lunch today, the PSEi is already down.
The PSEi ended last week on a positive note, up by 1.33% to end the week at 7,067.73 points.
The PSEi is still in a corrective mode and resistance is said to be at 7,100-7,160. If the resistance points are broken, there is a good chance of the index recovering to 7,297.
The looming Fed rake hike together with the issues and anxiety over President Duterte’s anti-west and pivot to China have been said to be dragging the index down. In fact, it is now a long way down since hitting the market peak at 8,102.40 on July 21, or a gain of 16.5%.
We might see more volatility in the market if the Fed rake hike takes place next month.
Just remember, we are in the stock market for the long haul. Regardless of whether the market recovers and goes higher or the market goes down deeper, we will continue our strategic average method and continue with the monthly investments we regularly make.