Philippine Stock Market: Bearish Because of President Rodrigo Duterte?
Jaycee De Guzman

Jaycee De Guzman

Hi! I'm Jaycee De Guzman. I have helped thousands of Filipinos trade independently and execute investment plans profitably through the Stock Signals Philippines. I have also helped thousands of international clients and businesses from 100+ countries build their online presence and boost their sales through iPresence Business Solutions. Read my About Me page.
Jaycee De Guzman

Contrary to the popular belief that foreign investors’ ears are annoyed by the sound coming from Pres. Duterte’s mouth, we cannot really attribute everything to that matter.

The growing tension between international markets, brought about by political (wars) and economic issues (Brexit, dollar, oil) this year, is what’s causing this topsy-turvy behavior of our local market.

Take a look at the major index not only of our neighboring Asian markets but also those of the American and European markets. Don’t you see an advanced celebration of Valentine’s Day in their markets, too?

Citing President Duterte, as the only or major cause of this volatility in the market, is a lazy boy’s way of interpreting things. Blaming is totally different from analyzing. Let’s talk about the Philippine Stock Exchange Index (PSEi).

Philippine Stock Exchange Index (PSEi) - October 14, 2016

Philippine Stock Exchange Index (PSEi) - Foreign Fund Flow - October 14, 2016

PSEi already breached its support near 7,300-7,400. Watch out for the next support near 6,900-7,000 as the outflow of foreign funds continues. On a 30-day trading period, PSEi is on a Net Foreign Selling worth PHP15,907,723,000.00.

Breaking below 7,300, which is breaking below its 200-day SMA, is existing from the long-term bullish trend of PSEi.

If local and foreign investors won’t find PSEi ripe for a good entry near 7,300 to 7,400, the downtrend might continue until it re-tests the support near 6,900 to 7,000.

MACD is bearish as it moves below the zero line and below the signal line. RSI, despite its upward slope, is closer to the oversold area than the overbought area.

Volume was low from October 7 to 12. It went back to its 30-day volume average on October 13, 2016.

Philippine Stock Exchange Index (PSEi) - Volume - October 14, 2016

Stay on the sidelines if you’re the kind of a trader whose only basis for all decisions is what you think, feel, and believe without any data behind it. Take this opportunity to study 2 to 3 indicators that suit you best. Identify your risk tolerance so you won’t see yourself again losing more than what you can only afford to handle.

When it comes to long-term investing, continue with your monthly top-up schedule. Don’t postpone it. Don’t get stuck at this kind of thinking: “Shall I buy now or postpone the plan to buy? The price might go down further by next month.” Once you get used to that kind of thinking, as far as long-term investing is concerned, you might end up saying that 12 months a year and investing on nothing at all. It is not a bad idea to be wary of your stocks’ support levels. Just don’t let your craving to catch the perfect bottom paralyze you.

So, is the Philippine stock market bearish because of President Rodrigo Duterte or it’s just easier to blame than to analyze properly? Ssshhhh. Answer in silence.

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