THE stock market could fall further this week ahead of a renewed push to 9,000, analysts said.
Eagle Equities, Inc. research head Chris Mangun said the benchmark Philippine Stock Exchange index (PSEi) could shed another 200 points but may see a recovery before the end of the month.
“We are currently down 2.9 percent for the month of February but I have no doubt that we will [see]a recovery before the end of the month. I will not [also]be surprised if we lose another 200 points this week,” Mangun said.
“However, I am also confident that if we do, we will see it hold our major support at 8,300. If this scenario plays out, we will see the index bounce of that support line and break above 9,000,” he added.
“This is called a ‘bear trap’. This is beneficial for our market as more of the weak hands will be shaken out.”
A bear trap is defined as a false signal that a market rise has reversed, luring players to bet on a continued decline.
Local share prices were caught up in a global rout on Friday with the PSEi ending the trading week just short of falling into 8,400 territory.
The bellwether index lost 1.64 percent or 141.39 points to finish at 8,503.69 while wider All Shares dropped 1.30 percent or 66.29 points to end at 5,028.38.