The PSEi\u2019s closing value of 6,779.02 last week remains above the support zone of 6,740-6,760 that we have been watching closely, as it represents the 50% Fibonacci retracement of the market run-up that started in mid-December of 2022. However, it was also a touch below the 50-day moving average at 6,790, and below the trend line support of the uptrend that started in October 2022. <\/p>\n\n\n\n
While we find it encouraging that the 6,740-6,760 support zone has effectively repelled three attempts of a technical breakdown, we are concerned that the index is currently at a very precarious position where downward pressures have been allowed to build up and we are one bad news away from a 300-point drop that could take the market back to where it was at the end of 2022. <\/p>\n\n\n\n
A confluence of the 100-day and 200-day moving averages at around 6,450-6,500 could support the index if that happens, but a combination of macroeconomic and geopolitical risks could open up further downside below this level.<\/p>\n\n\n\n
All in all, the PSEi still has more than 700 points to go before it can mark a higher high above the February 2022 peak at 7,500. This is when we can establish a convincing bull market scenario. <\/p>\n\n\n\n
Until this happens, we will continue to identify this recent run-up merely as a bear market rally instead of an actual bull market.<\/p>\n\n\n\n