Foreign investors outflow have kept market selling pressure high. Likewise the continuing PHP depreciation is not helping local retail investors at all. As value investing have lost ground on both fronts with a triple digit decline on the PH stock market with the PSE Index closing at 7638 as of Sept 6, from a session low at 7567. Led by Mining/Oil down by -2.86%, followed by Holdings by -1.93% , Financials with -1.74% and Property sector down by 1.21% respectively.
As mentioned, it would take a considerable move from a decline which is the normal case scenario for the market to correct its misalignment when we had identified the divergent trend earlier period of August. With the continuing PHP depreciation and lost value in stocks would be quite a drag on a market that already has negative sentiments afloat on top of the political issues surrounding the present administration recent moves.
Technical vs. External Fundamentals
Meanwhile, after identifying the previous 'Mix Reading, Divergent Trend & Market Behavior' signal that we made reference to from our previous market call, the technical perspective already have been identified. Where price chart & price formation reflected above would have to complete its 'Complex Inverted H/S Formation' before any real serious price action would breakout from its intended forward looking pattern.
Only a contrary external fundamental could offset such anticipated pattern with a continuing price decline. There are at least a few issues that may emerge such as coming from a considerable and/ or continuous Foreign outflows, PH political misdirection on current issues, external forces of a major correction and /or a divergence with global equities such as the US markets just to name a few examples.
