Today's market closed with unexciting behavior. The value turnover is thin at P5.85 billion, the fourth day in a series of dropping liquidity since it reached a peak of P9.98 billion on Wednesday (February 6). Gainers barely outmatched Lossers 83-to-81. Last Friday Gainers failed to outdo Lossers at a deuce.
The good news however is that despite the crawling movement of the exhausted bull, the PSEi managed to breakthrough a new high and at the milestone level of 6,500, and just barely did so at 6,500.08.
The anemia of investor interest can be seen in the value turnover of the Top Three most-traded stocks of the day. Globe Telecom Inc (GLO) had a measely turnover of P210.34 million; SM Investments Corp (SM), only P182.87 million, and; Bank of the Philippine Islands Inc (BPI), P150.76 million. Compare that to the most favorite stock on Wednesday--BDO Unibank Inc (BDO)--which logged on a value turnover of P1.82 billion.
ANALYSIS
The PSEi performance is mimicked by the PSE All Shares index, indicating that the market malaise has been widespread in the market.
Today belongs to the second set of dissipating market interest; the first of which occurred last week from Monday through Thurdays, wherein PSEi change was at its highest of 117.17 and then dropped boldly in the succeeding days--to 29.87 on Tuesday; 7.14 on Wednesday, and culminated into a negative figure (-26.46) on Thursday. Today is the second day in the downtrend of the PSEi change (from 29.91 yesterday to 10.18 today), which may result into a negative figure tomorrow and Wednesday, bringing the market prices downward and more strongly... unless buying interest recovers at the level of at least P8.00 billion.
Nonetheless, the general prices in the market continues to be very high; that is, overpriced. A persisting bull with renewed spirit this week remains possible which can bring the PSEi to new heights. There is however a probability of profit-taking when such occurs, which can dampen the buying momentum.
Should a reversal occur, and a sustained one, value investors would be opening their purse wider. But that could spell the end of the Bull market. And who wants to end the enormouse stock pricing growth than those who had not bought in at attractive prices?
RECOMMENDATION
Despite the impending persistence of the downward pressure, this week's prospect continues to be a wait-and-see situation. The drop in prices may not dint the overvaluation that is reigning in the market. And the absent P4.0 billion funds in the market can become a buying force that will push the level much higher this week. There is a strong probability though that the traders who have already gained so much profit (at least 20%) on paper may decide to cash in on it when the market players decide to push the prices once more. At this pricing level, these are a trader's most tempting times.
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