The Philippine Stock Market breaks 3,400c- May 15, 2007

The morning after the elections saw the local equities market strongly advancing towards its record levels. After yesterday's trading break, investors flocked to the market and pushed the index past its immediate resistance at 3,400 as the political overhang over the past several months has been lifted.

The recovery in the US Dow Jones Industrial Average (US DJIA) on Friday (May 11 ; up by 111.09 points to close at 13326.22) and Monday (May 14 ; up by 20.56 to close 13346.78) after last Thursday's (May 10) big drop also boosted sentiment.

PSEi previous close - 3364.61 (May 11, 2007)

time-----------------up----------------PSEi
9:31----------------17.37
9:32----------------28.76
9:34----------------31.58
9:35----------------35.00-------------3399.61

After just five minutes into trading, the 3,400 resistance is already challenged and broken easily.

9:37---------------38.09
9:38---------------44.55
9:39---------------51.18
9:40---------------54.71
9:43---------------55.60
9:46---------------56.35
9:48---------------58.02------------3422.63

After a little more than 10 more minutes, the next resistance at 3,425 - 3450 was tested.

The market then consolidated in the next ten minutes.

9:49--------------51.13
9:50--------------50.46
9:54--------------54.95
9:55--------------56.82
9:56--------------57.28
9:57--------------54.01
9:59--------------50.64
10:01-------------56.32
10:02------------57.84
10:08------------60.24--------------3424.85

Upon breaking the lower tier of the resistance level, the PSEi tried to proceed to higher levels.

10:11-------------62.38
10:12-------------65.27
10:13-------------66.03
10:14-------------66.59
10:20------------66.80
10:21-------------67.07
10:22------------68.21-----------------3432.82 (the day's high)

An hour into trading, the market reached its day's high. After going up too fast too soon, it is prone to profit taking and bouts of selldowns. The market became somewhat volatile and trades in a wide range.

10:25------------64.00
10:29------------60.84
10:30------------54.53
10:36------------51.11

10:38------------54.58
10:47------------51.56
10:49------------50.89
10:51-------------49.15
10:53-------------47.64
11:04-------------43.99
11:08-------------41.56---------------3406.17

11:18--------------44.53
11:19--------------45.10
11:23--------------45.39
11:26--------------45.99
11:32--------------46.99

11:33---------------42.56
11:35---------------47.37
11:37---------------47.31
11:38---------------49.29

11:46--------------41.44
11:49--------------41.07
11:50--------------39.34
11:52--------------39.69

11:56--------------45.38

11:57---------------38.34
11:58---------------35.65-------------3400.26

The 3,400 level is briefly tested towards the close of the trading day, and managed to hold.

11:59---------------39.49
12:01---------------44.12------------3408.73
Market Close.

Advancers 85
Decliners 33

Value turnover PhP 5.71 bn
Cross transactions PhP 1.46 bn

Sectoral Indices
Industrial +2.75%
Holdings +1.84%
Property +1.35%
Financial +1.02%
Services +0.28%
M-O -0.43%

Market is now in a BULLISH MOOD. It is now on track to test its all time high levels. Investors can now concentrate on the economic fundamentals and company earnings.

Support at 3, 400 must hold and resistance is pegged at the 3,425- 3,450 levels. After this, it would be a breakout.

The peso is now just hovering at PhP 47.00 against the dollar.

Short term volatility may be experienced. As seen in the daily movement in the PSEi, market can move up or down very fast. This is a traders market; but it is riskier. For more conservative investors, buy fundamentlly sound stocks and hold for a longer period of time. For a start, a six month to one year time frame my be considered.


Closing prices of select stocks; - May 15, 2007
ABA - PhP 0.011
ALI - PhP 18.25
AR - PhP 0.012
DGTL - PhP 1.66
EIB - PhP 0.54
GO - PhP 0.28
GOB - PhP 0.28
LOTO - PhP 15.75
MPI - PhP 4.45
NRCP - PhP 4.35
SUN - PhP 0.73
V - PhP 1.76
WEB - PhP 0.05