SHARE prices could retreat this week given the absence of major catalysts and as selling pressure builds following the stock market's continued upward trajectory.
The 30-company Philippine Stock Exchange index (PSEi), which has advanced for five consecutive weeks, closed 0.58 percent higher week-on-week at 6,913.21 last Friday.
"[T]he local market could move sideways," Philstocks Financial Inc. senior research analyst Japhet Tantiangco said.
"We may see strong selling pressures as investors take profits from the market's preceding five-week rally," he added.
While the PSEi is approaching the 7,000 resistance level, Tantiangco said trading remained "anemic," as evidenced by low value turnover, implying that many investors had remained on the sidelines.
Last week, net market value turnover only averaged P4.29 billion per day.
Tantiangco, however, also said that the corporate sector's fourth quarter and full-year results could continue to drive optimism and support for the bourse.
"Record high performances from Wall Street, if continued, may also produce positive spillovers that would help the local market," he added.
Online brokerage 2TradeAsia.com said that recently released corporate earnings reports were "mostly impressive so far," with banks and property firms hitting positive expectations.
This week would be "heavy on large caps' earnings, led by the SM Group and power giant Manila Electric Co., [and] brace for likely intraweek swings as these make up 45 percent [of the] weight on the index," it noted.
2TradeAsia.com said the PSEi — which closed above 6,900 for the last two trading days — was "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 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."
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said that upcoming local economic reports, including the budget balance data and the latest Philippine purchasing managers, could move the market.
He added that investors would also closely monitor fresh US data such as new home sales, durable goods orders, home price gauges, trade deficits, personal income and spending, and personal consumption expenditure inflation, among others.
Chart-wise, analysts see the PSEi's support at between 6,700 and 6,800.
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