The PSEi sits on an 8.5% decline from its January 18 high of 7,094.86 and the index is just 1.4% away from a full 10% decline from its recent peak, qualifying as a technical correction. Such can be classified as both an opportunity or a harbinger of a deeper decline, depending on the context for when it happens.<\/p>\n\n\n\n
Our View:<\/strong> The key levels of the PSEi to watch are 6,644.75 for the resistance level and 6,330.53 for support. A breach either way, supported by the number of PSEi stocks making new highs or lows, would increase our confidence on the bounce or breakdown of the PSEi. Remain on high alert for the time being.<\/p>\n\n\n\n What is concerning at this point is the weak technical conditions of the PSEi and this was even corroborated by the sell-off seen in ALI, SMPH and JFC in previous weeks. The market is indeed in a make-or-break situation, with 43% of index members can either inspire market confidence or be the last line of defense to break. <\/p>\n\n\n\n Notice also the negative price momentum as against the 200-day moving average with just 56% or 17 members of the PSEi still holding above this long-term average which can serve as both the anchor or the future burden for the Philippine market.<\/p>\n\n\n\n The Financials sector is an interesting sector to keep an eye on especially with the divergence seen in BDO vs the rest of the sector. The other sources of strength for the PSEi are URC, AP and MBT which are all sitting on top of its 50 MA and could indicate the likely direction of the index.<\/p>\n\n\n\n