Stock Market Weekly: Sentiment remains muted 

WHAT HAPPENED LAST WEEK

The Philippine Stock Exchange (PSEi) closed relatively flat week-on-week (w/w) at 6,266.75 after a week of range-bound trading, slightly lower by 0.43% (-27.36 points). The local bourse started the week on a positive note as investors hunted for bargains following the previous week’s sharp sell-off.

However, gains were quickly capped as investors adopted a risk-off stance ahead of the US Federal Reserve’s policy rate decision. As widely expected, the Fed kept interest rates steady at 4.50%, boosting sentiment mid-week after suggesting the possibility of two rate cuts this year.

On the local front, optimism was further supported by Department of Finance (DOF) Secretary Ralph Recto’s statement that the Bangko Sentral ng Pilipinas (BSP) is likely to trim policy rates in April, with room for 50 to 75 basis points (bps) worth of cuts this year. However, profit-taking on the final trading day of the week erased all gains, with investors repositioning ahead of the FTSE rebalancing, effective on Monday, March 24, 2025.

WHAT TO EXPECT THIS WEEK

This week, we expect the market to trade sideways with a slight downside bias. Despite signals of monetary policy easing from both domestic and foreign fronts, sentiment remains muted. On the foreign front, the third reading for US 4Q 2024 GDP report is scheduled for release on Thursday, March 27, 2025. The market expects 2.3% quarter-on-quarter (q/q) growth. This aligns with the first and second reading’s 2.3% estimate.

Resistance: 6,400 / 6,800

Support: 6,000 / 6,200

ANALYSIS

The PSEi ended flattish at 6,266.75 (-0.43% w/w), with the index moving sideways throughout the week. Despite the choppy price action, it remains above the 20-day and 50-day moving averages, suggesting established support. As the index finds direction, a sustained move above 6,400 could indicate further upside.

STOCK CALLS FOR THE WEEK

Puregold Price Club, Inc. (PGOLD) | BUY ON SUPPORT | CONSENSUS TARGET PRICE: PHP 36.00

PGOLD’s share price has dropped below its 20-day and 50-day moving averages (MAs) and is nearing its key support level at PHP 26.35. Since the start of the year, PGOLD has struggled to surpass its 100-day and 200-day MAs, which further signals weak momentum, reducing the possibility of a potential reversal.

On momentum indicators, its MACD and RSI are slightly below neutral levels, suggesting a possible visit near its key support level at PHP 25.00. Therefore, given the risk is skewed towards the downside, accumulating at support is advisable. Accumulating PGOLD on support at PHP 25.00 is advisable. Set stop limit orders at PHP 23.00 and take profits at PHP 28.75.

PLDT Inc. (TEL) | BUY ON BREAKOUT | FMSEC TARGET PRICE: PHP 1,600.00

TEL has traded in an upward channel since hitting its 52-week low of PHP 1,252 in December 2024. However, the stock dropped below its 20-day and 200-day moving averages (MAs) amid a broad-based market sell-off, with the stock now trading around its 50-day and 100-day MAs.

While momentum indicators remain neutral, TEL’s 50-day MA appears set to cross above the 100-day MA, suggesting renewed bullish momentum in the medium term. Nonetheless, we prefer accumulating TEL once it breaks above its immediate resistance (20-day MA) on strong volume, which may confirm price recovery. Accumulate TEL once it breaks above the 20-day MA (around PHP 1,367) on strong volume. Take profits at PHP 1,572 and set stop loss limits below PHP 1,258.

International Container Terminal Services, Inc. (ICT) | TRAILING STOPS | CONSENSUS TARGET PRICE: PHP 439.84

The counter has been trading in a downward channel since reaching its all-time high of PHP 446.00 in October 2024. Since then, it has struggled to sustain momentum, forming lower lows amid geopolitical uncertainties. While the stock surged by as much as 50% in 2024 from end-2023 to its peak, replicating that rally may be challenging given the ongoing downtrend and macroeconomic headwinds.

Given these, investors may consider reducing exposure ahead of potential volatility. We recommend implementing trailing stops and taking profits near the upper band of the downward channel. For those with exposure, implementing trailing stops is advisable.

KEY DATA RELEASES

1. US S&P Global Manufacturing Purchasing Managers’ Index (PMI) Flash for March 2025 on Monday, March 24, 2025 (previous: 52.7; estimates: 51.9)

2. US GDP growth rate q/q (third reading) for 4Q 2025 on Thursday, March 27, 2025 (3Q 2024: 3.1%; estimates: 2.3%)

3. US Initial Jobless Claims as of March 22, 2025, on Thursday, March 27, 2025 (previous: 223k; estimates: 225k)

4. PH Balance of Trade y/y on Friday, March 28, 2025 (previous: -USD5.089 billion)

5. PH Exports y/y on Friday, March 28, 2025 (previous: 6.3%)

6. PH Imports y/y on Friday, March 28, 2025 (previous: 10.8%)