Stock Market Weekly: Middle East tensions in focus 

WHAT HAPPENED LAST WEEK

Last week, the index inched upwards by 0.29% week-on-week (w/w), closing at 6,395.59 (+18.8 points). Despite a tepid start, the market managed to end the week in the green after the US announced a trade deal with China. The agreement reduced tariffs on Chinese goods to 55% from 145%, while China cut levies on US imports to 10% and eased barriers on key mineral exports. Additionally, a softer-than-expected US Consumer Price Index (CPI) print of 2.4% (estimates: 2.5%) also boosted risk-on sentiment.

WHAT TO EXPECT THIS WEEK

This week, investors are likely to maintain a risk-off stance amid the escalating war in the Middle East. Oil prices are expected to surge after the bombing of a major oil facility in Iran, possibly reigniting inflation fears and affecting upcoming policy decisions. The US Fed and Bangko Sentral ng Pilipinas (BSP) are both set to meet on Thursday. While the Fed is expected to hold rates steady at 4.5%, the BSP is expected to cut rates by 25 bps following weak GDP and low inflation. However, rising fuel costs from the Middle East conflict could derail dovish expectations. Local fuel prices are set to increase by PHP 0.90–1.40/liter.

ANALYSIS

The Philippine Stock Exchange index (PSEi) inched up 0.29% w/w to 6,395.59 (+18.9 pts). The index is currently consolidating just below the 6,400 resistance level, indicating indecision or sideways movement. A break above 6,400 could signal a bullish trend, while consolidation might lead to a retest of the 6,300 support. Accumulating on breakout is recommended.

Resistance: 6,400 / 6,500

Support: 6,200 / 6,300

STOCK CALLS FOR THE WEEK

Bloomberry Resorts Corp. (BLOOM) | BUY ON PULLBACK | CONSENSUS TARGET PRICE: PHP 7.31

BLOOM regained momentum after speculation about its potential PSEi exclusion. It has been on an uptrend since late April with strong volume. The 50-day MA crossed above the 100-day MA, and the 20-day MA is poised to cross the 200-day MA.

However, momentum indicators show overbought levels, suggesting a correction may occur. Accumulating BLOOM once it pulls back near the 50-day MA around PHP 5.50/5.30 is advised. Take profits at PHP 6.32 and set stop loss limits at PHP 5.06.

Universal Robina Corp. (URC) | BUY | CONSENSUS TARGET PRICE: PHP 90.00

URC is trading below its 20-day MA and above its 23.60% Fibonacci retracement level. RSI is neutral but trending downward, while MACD remains below the signal line. Accumulating URC once it pulls back to the 38.20% Fibonacci retracement level at PHP 79.75 is advisable. Take profits at PHP 91.00 and set stop loss limits below PHP 73.40.

DoubleDragon Corp. (DD) | BUY | CONSENSUS TARGET PRICE: N/A

DD has surged 42.52% since the start of June and is now trading above all key MAs, reflecting strong bullish momentum. MACD is above the signal line and RSI is at overbought levels, indicating continued investor interest. Accumulating DD at current levels is advisable. Take profit at PHP 16.65 and set the stop loss limit at PHP 13.32.

KEY DATA RELEASES

1. PH Cash Remittances for April 2025 on Monday, June 17, 2025 (previous: USD 2.8 billion)

2. US Retail Sales month-on-month (m/m) for May 2025 on Tuesday, June 17, 2025 (estimates: -0.1%; previous: 0.1%)

3. US FOMC Economic Projections on Thursday, June 19, 2025

4. US Fed Interest Rate Decision on Thursday, June 19, 2025 (estimates: 4.5%; previous: 4.5%)

5. PH Interest Rate Decision on Thursday, June 19, 2025 (estimates: 5.25%; previous: 5.5%)