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Stock Market Weekly: A ray of hope amid data releases
With macro data releases this week, we see an upward bias in the markets amid the volatility.
By First Metro Securities Research
WHAT HAPPENED LAST WEEK
Last week, the Philippine Stock Exchange index (PSEi) extended its winning streak for a third consecutive week, rising 2.28% week-on-week (w/w) to close at 6,411.86 (+143.11 points). The local bourse initially traded sideways amid continued global trade uncertainties. Mid-week, investor confidence improved after Fitch Ratings reaffirmed the Philippines’ BBB rating, triggering significant foreign inflows. In addition, strong local and foreign 1Q 2025 corporate earnings as well as the strengthening of the peso below PHP 56.0 further boosted the index.
The US labor market added 177k jobs in April 2025, higher than the consensus estimate of 130k additions, with most of the job gains coming from healthcare (+51k), transportation and ware-housing (+29k), and financial activities (+14k).
The unemployment rate was stable at 4.2% (estimates: 4.2%; March 2025: 4.2%). The labor force participation rate came in at 62.6% (March 2025: 62.5%). Wage growth came in at 3.8% year-on-year (y/y) (March 2025: 3.3%).
WHAT TO EXPECT THIS WEEK
We expect a volatile week ahead with an upward bias amid a slew of index earnings results and key macro data releases. On the local front, investors will digest inflation, employment, and GDP figures, which are expected to improve sequentially. Consensus forecasts Philippine unemployment to ease to 3.3% (from 3.8%) and GDP to expand by 5.7% y/y. Overseas, the market is pricing in an unchanged US policy rate following last week’s strong jobs data and tariff-driven inflation fears. Furthermore, continued easing of trade tensions between China and the US could spur further risk-on activity.
ANALYSIS
SUPPORT: 6,200/6,400
RESISTANCE: 6,600/6,800
The PSEi increased 2.28% w/w to 6,411.86 (+143.11 points), breaking past its 6,400 resistance as well as its 20-day, 50-day, and 100-day moving averages (MA). With the index now trending upward, accumulating on sustained strength is advisable as the overall trend has shifted to bullish. Key support levels are set at 6,200 and 6,400, while its resistance levels are at 6,600 and 6,800.
Accumulating at current levels is advisable.
STOCK CALLS FOR THE WEEK
SP New Energy Corp. (SPNEC) | BUY | CONSENSUS TARGET PRICE: N/A
SPNEC has broken above its cup and handle reversal pattern, trading above key moving averages (20-day, 50- day, 100-day, and 200-day). Momentum indicators have also turned to the upside, further supporting a potential rally. Thus, accumulating SPNEC at current levels could present an opportunity with potential for further gains.
Accumulating SPNEC at current levels around PHP 1.28 level is advisable. Take profits around PHP 1.47 and set stop-loss limits below PHP 1.18.
Puregold Price Club, Inc. (PGOLD) | BUY | FMSEC TARGET PRICE: PHP 36.00
PGOLD shows strong bullish momentum, trading above all key moving averages (20-day, 50-day, 100-day, and 200-day). The MACD remains bullish, while the RSI indicates overbought conditions, suggesting the likelihood of pullbacks. Additionally, a potential short-term opportunity for entry may arise following a decline after the April 29, 2025, ex-dividend date, presenting an opportunity to accumulate at more favorable levels.
Accumulating PGOLD at current levels is advisable. Take profits 15% above your entry price and set stop loss limits 8% below entry price.
Cebu Air, Inc. (CEB) | BUY | CONSENSUS TARGET PRICE: PHP 44.00
CEB broke out of its immediate resistance of PHP 34.50. It is trading above key moving averages (50-day, 100-day, and 200-day MA) with momentum indicators (RSI and MACD) signaling strong bearish sentiment. Thus, we prefer to trend follow and accumulate on pullbacks.
Accumulating once CEB pulls back to PHP 34.50 is advised. Take profits at PHP 41.4 and set your stop-loss limit below PHP 31.74.
KEY DATA RELEASES
- PH inflation rate y/y for April on Tuesday, May 6, 2025 (estimates: 1.8%; previous: 1.8%)
- PH 1Q 2025 unemployment rate on Wednesday, May 7, 2025 (estimates: 3.3%; previous: 3.8%)
- US Fed interest rate decision on Thursday, May 7, 2025 (estimates: 4.5%; previous: 4.5%)
- PH 1Q 2025 GDP growth rate on Thursday, May 7, 2025 (estimates: 5.7%; previous: 5.2%)