As the local stock market enters the 11th year of its bull cycle this 2020, investors must brace for choppy movements and watch out for risks that the bear will overpower the aging bull, according to equities research provider Trading Edge. In a research note from Trading Edge chief investment strategist Ron Albert Acoba and technical analyst Angelique Chua, they said that for about a year now, the Philippine Stock Exchange index (PSEi) was simply moving similar to a tennis match rally, with the near-term support at 7,545 to 7,600 and resistance at 8,150 to 8,216. The inability of the local stock barometer to move forward suggested there was a risk of breaking below the near-term support, the analysts said. The next support levels are seen at 6,800-7,000, the lows seen in 2018 when the upsurge in inflation spooked investors. Trading Edge believes it’s “crucial to stay above this as a break below may mark the start of a prolonged bear wave.”
The analysts noted the last bull run back in the 2000s lasted for five years while the bull run in the 1990s lasted seven years. Today, the PSEi is seen at the late stage of its bull cycle.