The Philippine stock index is bullish, rising for three weeks in a row and surpassing not just the 7,000-point psychological barrier but also breaking the 7,200 strong resistance level.

According to Philstocks Financial Inc., a product and service provider in the stock market, trading activity is in upward momentum. Foreigners are consistently being net buyers, with net foreign inflows in a 14-day streak. 

They added that the market is trading above its 10-day, 50-day, and 200-day moving averages, while its moving average convergence/divergence (MACD) line is moving above the signal line. 

“However, its 14-day RSI (relative strength index) indicates that the market is already in overbought territory," Philstocks Financial Inc. senior research analyst Japhet Tantiangco said.

He noted that with the three-week rally and the RSI indications, episodes of profit-taking are possible next week. However, he said the local bourse may still end in green.

“The market may still end next week on a positive note as the dovish monetary policy outlook of the BSP and the Fed may continue to uphold optimism,” Tantiangco said, adding that continued appreciation of the peso will buoy the market’s upward movement. 

“Next week, investors may also watch out for the BSP’s upcoming business and consumer expectations survey for clues on the local economy,” he noted.

The local market’s support is seen at 7,150, while resistance is at 7,400, he added.

The stock market benchmark last Friday closed at 7,252.32 points,  with Banking leading the gainers.

The sentiment was boosted by the fund adjustments from the Financial Times Stock Exchange as the Bangko Sentral ng Pilipinas reduced the reserve requirement ratio (RRR) for local banks to 250 basis points (bps) for universal banks to 7 percent; 200 bps for digital banks; and 100 bps for thrift, rural, and cooperative banks, effective 25 October.