Although the PSEi edged higher though neglegibly at 6,098.14, it closed low today as reds dominated the sectoral indices at closing. Rumors of a "market bubble" to erupt anytime may have stricken the traders with fright to sell down their holdings in drove. Losers exceptionally dominated consisting of 120 stocks, the highest so far even in the last two years, as Gainers dropped to 52 companies. The profit-taking marked a value turnover of P8.44 billion, a huge cash that can bring the market back up when conditions allow.
GT Capital Holdings Inc (GTCAP) topped the value turnover list with P1.0 billion transacted for the day. Imperial Resources Inc, Class B (IMPB) bested everone else in price gains that reached 50.0 percent. Loser of the day is Chemical Industries of the Philippines (CIP), which dropped 41.13 percent.
ANALYSIS
As noted in yesterday's post, the weakening of the Bull finally gave way today to the bearish forces. But this does not necessarily mean that the Bear is going to be riding the market down in the coming days. Our hope rests in the sturdiness of the 6,000 PSEi level that many traders may fight to the death to let back down to the 5,000 levels. The reputation of the Philippine stock market is at stake in keeping the 6,000 mark stay.
Unless serious bad news come in tomorrow that will cast another round of fear among traders, the huge cash available today from the profit-makers can become a fuel for a resurgence of the market tomorrow. We will hope that more investment funds come in to buy securities in the market tomorrow so continued surge can reach higher levels, hopefully at 6,500. That's the positive side of the event of the day.
Expensive stocks however continue to dominate the market even after the decline today. Value investors may hold back capital tomorrow to wait for cheaper prices in the coming days. That will remove enough money from the market which can make the trading tomorrow anemic. And a surge may be weak at best. At worst, another round of price decline can happen as traders run after sellers at lower prices levels.
RECOMMENDATION
If you have cashed in part or whole of your portfolio today, your cash may be your best bullets to shoot rare elephants that may start appearing tomorrow. But of course, it is wiser to pay for better price.
If you have stayed with your portfolio to wait for another surge, you may need to put in more money to shop for cheaper prices tomorrow. High buying behavior tomorrow may encourage traders who made money today to go back to the market and run after higher prices again.
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