Say: Market may have already factored in weak GDP, high inflation

Hinzugefügt: 2026-05-12

[00:00:00]Philippine GDP hovers at its weakest [music] in 5 years, while inflation quickens to its fastest in over 3 years.

[00:00:07]Yet, our next [music] guest technical charts reveal the Philippine stock exchange index and key sectors [music] are holding up or even improving in momentum. So, what is the market signaling [music] that the macro headlines may be missing? Here to share his insights, Aaron Sayed, a consultant at First Metro [music] Securities Inc.

[00:00:25]It's good seeing you again, Aaron.

[00:00:26]Welcome back to the program.

[00:00:31]I believe you're on mute. Uh Aaron, you're seeing possible divergence in the PSEi and four of the six sectoral indices. For viewers who are not technical traders, how do you define bullish divergence in in plain language and why does it matter right now?

[00:00:49]Yes, as we know, the market has been going lower, no? So, as as the market goes to the direction of the trend, which again is lower, uh we expect momentum in that direction to be higher, no? So, bullish divergence is the is when we see that the momentum in the downward trend, no, is uh getting lower or uh the market is still bearish, no, but they are less bearish now than before, no? So, yes, the the momentum is improving, no, but in the sense of it's less bearish now, even in the face of uh same low or even lower lows. Right, less bearish now and the momentum improving at a time we're seeing softer growth numbers and a recent surge in inflation.

[00:01:29]I mean, how do you reconcile this improving technical picture with the fundamentals?

[00:01:34]>> [laughter] >> I I can't.

[00:01:37]I I I I I I actually am a little bit uh worried, no, about this divergences, no?

[00:01:42]Although, again, no, as we know, the market is forward-looking, no, and as we uh as we draw our charts, no, as we study our charts, we are taking cues, no, from what the market is doing based on the price action, no? And again, uh as we know, that are a lot of times that technicals know or the price action and the fundamentals know which again very bearish know as with recent announcement of the GDP and inflation know very very bad numbers know but the what we are seeing from the chart is that it's possible know it's possible of course subject to future confirmation know that the market has already been discounting this all all along know we have been in this mess know we have been in this mess for for quite some time already know we we have seen the prices really corrected lower know since the February announcement of bad things know and we have and we have seen drastic downtrend know from that time know but now even with the announcement know even with the announcement of bad macro numbers and this macro numbers are big know this are GDP know GDP and inflation know but we but we seeing the prices is that that the support are either holding up know and of course the for some even if they have made lower lows know the the momentum know the downward bearish momentum is improving know meaning it's very very good for the market >> so that can be our disclaimer but just let's take it through one chart at a time and really understand what you're getting at PSEI had opened higher about 600 of a percent just for everybody's knowledge the PSEI itself you're pointing to a double bottom and a higher low in momentum even as the price retests support so what specific price and momentum triggers would tell you that a tradeable bottom is in place when you look at this chart As for now I think what we actually the what happened last week know what happened last Friday was a little bit worrisome know because it rejected the the bullish price action the day before know but as for now we as long as that as long as that support at around 6,000 level or at around 5800 level is still intact, I think there's still a good chance that we can get get go higher, no, maybe around 6,600.

[00:04:03]Again, this double bottom is still forming, no.

[00:04:06]What's good about this is that the double bottom is showing in the midst, no, in the midst and supported by maybe no by by a bullish divergence, which again is a lower bearish momentum. So, if this momentum in improves, no, maybe if we see MACD and RSI going above the threshold, no, so zero for MACD and above 50 for RSI, then maybe we can be more confident, no, in the positive momentum moving forward for the PSEi. Right. When we take a look at services, because that's been the key driver for GDP, your chart shows that a well-defined uptrend channel and a push to new highs is is showing up in this chart. How much more upside do you see in this move? And what kind of a pullback would you consider healthy rather than a red flag for the sector?

[00:04:58]Yes, for now, services is the stellar sector amongst the many, no. So, the other one being mining and oil. So, for services, it's really been carried on its back, no, by ICTSI, no, being the highest, no, weight no in in all the indices no in services subsector and of course in PSEi.

[00:05:19]But along with ICT, other other service companies, no, or other companies in the in the in that sector, no, namely RHI, as we saw it surged after the tender offer announcement. And of course, Puregold, no. Puregold as of now is is knocking on heaven's door, we call it, no. It's knocking on the 44 pesos resistance. And if it breaks above that 40 that resistance now where it is now, I think there's a a fairly hefty no price movement moving upwards. So, as for now, we we will not fight the trend in services. No, we will continue to be uh those to to have a bullish stance on services. As for the correction, as long as it doesn't go below its 50-day moving average, I think we're good for services. Okay, but what about industrials? Because your chart here also flags a bit of a breakout in that box that you made there, a box consolidation with positive market momentum and trend direction. How do you interpret this breakout in the context of the broader market?

[00:06:21]I think the context of a very bad broad market that is as a welcome surprise, a welcome positive surprise. Although this this breakout is still a lower high. No, this is a lower high from the from the recent high.

[00:06:34]A good showing from the the heavyweights now in this in this in the in the industrial sector index, no, mainly Meralco. No, it still continues to go higher. No, and now it's being supported by the continued uptrend in Manila Water. No, as well as in recent breakout of consolidation of ACEN, as well as Monde. No, so for now, for for for looking at the charts now of those that are comprising this industrial index, I think there's a good chance that it can retest now that recent high that we we are seeing in the charts. Yeah, because when you talk about holding firms, the chart already shows repeated repetitive bullish divergences even as the longer-term downtrend remains intact. How are you reconciling then the short-term positive signals with the longer-term downward slope?

[00:07:28]Well, for the holding company, as we know, this this this sector has been very much battered, no.

[00:07:34]But but for now, we we are seeing again, if you are looking at the broader view, While again the data has been has been uh the macro data which are very relevant for holding firms. Now, if we talk if we talk about SM AC or JGS even no, uh they are representative actually.

[00:07:52]Their businesses are representative of what we what we can uh build up no to to be the backer economy. And the macro economy is telling us that it has been bad no. But again, the the the market is forward-looking. The SM AC and JGS has been battered a lot no, but of course recently they have been uh especially for a uh AC and JGS, they have been um rallying no. But the generally downtrend is still lower. So, I think again, it's possible no based on what the what the index is showing, uh the holdings index is showing and uh based on the uh what the what the individual charts no of those under the holdings index are uh showing no, I think there's a good chance that uh what we are seeing now in the macro data has been if not fully no, largely no, uh uh discounted already in the stock price. Now, of course, uh subject to further uh confirmation by the market.

[00:08:47]Right. Um then we go to financials and because that's a bellwether of the Philippine economy. Does it show a full discounting already of the bad news or does this suggest that banks and and and other um financials uh already have or still risks a delay uh that could delay a sustained uptrend?

[00:09:10]Yes, amongst men amongst the many including properties no, financial is definitely one of the uh one of those in the forefront of uh the possible um adversely adversely affected no by this uh numbers no in the economy no.

[00:09:24]But again, for for the charts no, it's it's has been showing the lower low no.

[00:09:28]But MACD no as a measure of of momentum has been improving to a lot to higher low no. So, um and and more than that, I think now is if we are if we are to look at the charts, now what we are seeing now is a possible a possible end of end of period or end of consolidation now in a in a bullish in a bullish falling wedge pattern now.

[00:09:54]So again, we have seen that before when the when the price now when the price breaks above the resistance of a falling wedge now it it it went higher now. So that's what we're seeing now.

[00:10:05]The possibility of that at least now it's still inside the consolidation pattern, but when we look at the what the corroborating information namely that the bullish divergence that it might be forming, then we might possibly see a good days ahead for BDO, BPI, and Metrobank. Okay, now that you mentioned falling wedge, I wanted to show the property chart here because that's exactly what we're or you're at least looking at that long falling wedge.

[00:10:32]Given higher rates and softer patches in demand, what is really Aaron, the realistic road map for a property rebound now that you're that you're seeing this in the chart and how long do you think that might play out?

[00:10:44]Yes, fundamentals is really against property now.

[00:10:48]If we are if we are looking at rates now though so the signaling of the willingness of the BSP to to stop and to reverse now the the cutting of rates and go higher risk. So which I think based on the interest rates benchmark now that we are seeing even from the US 10-year yield we are we are also of the view that it might go higher now. But again for for the property companies at least for what we are seeing in the chart of the property sector, it has been in a downtrend now.

[00:11:17]It has made lower low even lower than November 2025 low, but the but these movements now since the highs are inside now inside the bullish falling wedge consolidation now. It's very very big now so the swings would definitely be large, no, as as as big as the proportionate with the the whole pattern, no. But, what we are seeing now inside that that falling wedge is a possible double bottom, no, for the property sector. So, I think for this one, I if I if if we would choose, no, which companies inside the property sector would provide some opportunities, definitely SM Prime and Ali, no. As for their REITs, no, which are the third and the fourth, um AREIT and RCR, no, the third and the fourth in the market cap weighted index, um I'm a little bit not comfortable, no, because they have gone lower from a double top, no, and they broke below neckline. So, as far as the the proper opportunities in the property sector, if this consolidation pattern successfully break above resistance, I think my money would go to SM Prime and Ali more than the REITs. Where would your money go when it comes to the speculative? So, I mean, when you look at the mining and oil chart, it stands out. It's still in that broad uptrend channel, but it's it's now testing last month's high. So, how much of this move do you attribute to that technical structure versus your view on global commodities for one and the peso? And how should investors approach this more volatile space?

[00:12:51]As for mining and oil in again in the long term, I think we have shared that in the charts when I was there the last time, no.

[00:12:57]The the mining and oil, if we look at it more broadly and again in the long term, the mining and oil index of the PSE is for has been forming, no, at that time has been forming a bullish head and shoulders pattern, which is a very very big pattern, and we are still a long way to go to to achieve the target, no. It has broken above the resistance of that head and shoulders. It has retested the broken resistance recently and successfully bounced off off that are broken resistance. So, I think mining and oil as as also reinforced by this short-term daily chart is still very much in an uptrend. So, as far as the individual stock picking, I think the since we are looking at the bullish sectoral index chart, the heavyweights, APX, OGP, and of course nickel are good candidates. If you are look at the individual charts of this if this if this companies, they actually mimic what we are seeing in mining and oil, which actually is very much resembling the movement and the gold prices.

[00:14:01]Actually, I remember when I was there when we did we we did this in the studio, I think we were a little a little bit cautious now about gold prices, but we warned that if that gold can also be held above the 50-day. And if gold if it if it manages to hold above the 50-day, then the the uptrend continues. And that's what happened. No. And what we're seeing now is still a continuation of that. No. Although again, we have seen a tremendous explosion in the price of gold since it really went a search higher. So, we would continue to be on guard against possible correction. But as of now, I think we have what we have seen since February is a good correction enough to be more confident that the upside could still be there even at this level. Yeah, we do. The whole team remembers when you were here and gold prices were reaching historic records for for long-term Filipino investors, Aaron, who stayed underweight equities because of all the uncertainty and and what you call the mess, how should they think about reentering? Is it through the index or through select sectors like services and financials which we've taken up on the charts or through very specific stock themes tied to these divergences?

[00:15:13]As far as price as far as price action, I think this divergence says no are are good Uh, starting point now as to where to look. Now, but of course, if we're talking about long-term, uh, because I know I as as we know this daily charts and uh, even there if there if they're showing bullish divergences as might falter uh, moving forward. Now, but hopefully not. Now, but because if they faltered then that means a lot of lower lows, which again could signal more bearish sentiments moving forward.

[00:15:42]Now, but again, if this uh, if this bullish divergences are to be successful now, then that's that's the first uh, place to look at. Now, but of course, for long-term investors, if we introduce valuation and then I did this exercise as now using the consensus uh, fair value estimates of of major brokers. Now, if we introduce valuation and we introduce uh, 30% now, we take away 30% from their consensus fair value, Ali, GT Cap, JFC and SMPH still stand out. Now, as they still present more than 20% upside despite that uh, steep 30% discount.

[00:16:19]Okay, just a final point for the active traders watching and listening.

[00:16:24]Um, what is your practical game plan now? How should they size positions and where should they, you know, set the stops and and what clear warning signs would tell them that the bullish setup has failed?

[00:16:36]Uh, the bullish setup is still with the with the uh, services and miners. Now, so first for the for the traders, we continue to uh, stick with the miners. I with the miners, ICT, Manila Water and of course, uh, AGI send, which again has has a clear uh, breakout now from consolidation and of course, the miners. Now, PX APX or GP.

[00:16:58]Now, as for the position sizing, uh, I I think now if you are nimble enough now and if you are um, agile enough now in I know in uh, in monitoring the price trend, then you can invest as much as 50%. Now, uh, if if you are risk averse [clears throat] now, as much as 50% of your portfolio. Just mind possibility of this market going still going lower. As we are still in a downtrend. What's good about what we're seeing now is there might be a some relief in the short term, which might be indicative of its long-term health. But as as as long as what we're seeing now is a very very bad market.

[00:17:40]We continue to air on the side of prudence, while taking advantage of the opportunities that is I think showing us today. All right, I'll leave it at nimble and agile. Thank you so much for the insights there Earn Sei of First Metro [music] Securities.