The local stock market index, dropped -0.26% for the day as it closed at 7,294.52 with 8.19 Billion Pesos worth of value turnover amidst a bigger probability of a FED rate hike to happen this March. In spite of that though, we now have 2 straight days of net foreign buying after 5 straight days of selling.
Key issues to watch out for are:
1. The FED rate hike and how many basis points will the hike be. 0.25 pts is what’s expected, should it go higher say 0.50% this is something above and beyond what is expected and would probably throw off the markets.
2. The Peso continues to depreciate along with oil prices continuing its steady increase. As a result, this has already affected inflation to levels that is at 2 year highs.
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Looking at the chart below, the PSEI is sideways for the short to mid term. With that you could expect the market to oscillate from 7,118 to 7,370.
For quick traders, you may use the PSEI as a reference for most of the large caps (SM, AC) that move as proxy plays to the index. The best buying opportunity is a bounce 7,118 with a short term target price to sell at 7,370. Should the market fall and not hold 7,118, the downside risk would bring the market to 7,048. Should it breakout of 7,370 the market could go higher to 7,460.
For position traders, we don’t have a firm conviction yet that the market is bullish already. It must breakout of 7,460 for it to have a complete reversal upward. I would suggest that position traders wait until all parameters would point that the market is already bullish. Should the breakout from 7,460 happen, the market turns bullish and we could see the market go to 7,761 initially.
I hope this helps you in your trades and I hope the stock market brings you closer to your dreams of financial freedom.