The Philippine Stock Exchange Index (PSEi) managed to recover above the support at the 7,000 level after touching the intraday low of 6,923.57. Unfortunately, the outflow of foreign funds continues as the main index registered P1.4B Net Foreign Selling (NFS) today, its 26th NFS in a row.
Meanwhile, European indices found relief due to the results of the manufacturing data and oil gains, but US and Asian markets remain in the red zone.
Back to the local, the Philippine Peso shows no significant sign of recovery against the dollar while the inflation rate is expected to rise between 4.7 to 5.1 percent this year, according to bankers. Notice that every time “inflation” and “rate hikes” become trending topics in the financial market, equities tend to move to the south.
I would still advise active traders to stay on the sidelines and be in a cash position so you’re ready to ride the reversal of sentiment as soon as the market hits its psychological bottom.
While it is still possible to earn through scalping, I suggest that you leave that to the experienced and skilled traders. If you want to test your skills in a market environment like this, use “play money” and virtual trading money platforms such as that one provided by Investagrams for a start.
This kind of market environment is a cycle. This is not the first and last time that we will encounter a bearish market, anyway. When this happens again, at least, you have a tested strategy for a market like this.
For the medium- to long-term investors, this is the best time to enter a new position and top up on your positions on stocks that are not only fundamentally sound but also have a “good” reward-to-risk ratio. Modesty aside, I recommend 14 stocks from various sectors that are undervalued relative to the fundamental stats of the sector where they belong. You’ll find these 14 stocks in the Top Stock Picks service of Equilyst Analytics.
Always remember to make a data-driven decision. If you’re not comfortable making a decision on your own, find a mentor who can simplify the stock market for you.