Investors’ sentiment remains positive despite the 25-point loss on Friday’s session following an intra-day rally last Thursday.

BPI Securities noted that the rally on Thursday has failed to sustain on Friday as the market resumed its descent, closing out the session with a loss of 25 points.

Despite the weak close to the trading week, the PSEi still managed a 123 point gain owing to the midweek surge.

BPI says a rally in US stocks had propelled local issues higher; buying support has been extremely strong with volumes topping to P5 billion. The index also set a new high for the year this week, peaking at 2971.

AB Capital Securities says despite the recent breakout from an important resistance, the local stock market might take a breather.

“There seems to be a lack of conviction and fundamental backing on the market's technical breakout,” says AB Capital.

“We noticed that the volume was quite thin on the breakout day and after that. Short-term traders are still in a profit-taking mode and the lack of a similar break out from the US market seems to be dampening the PSEi's run up to 3,000.”

AB Capital expects the PSEi to move within another narrow 100 point range this week at between 2,900 to 3,000.

“A lot will depend on how the markets abroad will perform. A strong rally abroad will be a big boost in market sentiments, which should help the local market make its run beyond 3,000. The Dow Jones Industrial Average has its own major hurdle at 9,840,” says AB Capital.

The PSEi has broke out from its important 2,900 resistance level. The market consolidated within a narrow 200 point range for more than two months, dating back to late July this year, says AB Capital.

Local shares rallied on the improving projections for the local economy and it also reacted positively to the latest inflation data.