The Philippine Stock Exchange Index(PSEi) has been slump for the past days due to the Euro concerns and some market sentiment that it is overvalued. The long-awaited correction phase has kick in and most investors are now cashing out their profits. Also with the Holy Week coming next week, most investors are positioning their portfolios to either grab their profit before the Holy Week break(the Philippine Stock Exchange will be close on March 28-29 in observance of Maundy Thursday & Good Friday) or stockpile shares that seem to be in the bottom prices.
Looking at the two charts it is clear that the Philippine Stock Market has enjoyed a bullish period and that small slant signals the reversal of the trend. For the fact that the market has enjoyed such upward trend it is normal that what goes up should go down.
Some are kinda traumatized specially when they just jump in the stock trading bandwagon but in my opinion we should be happy because finally the market corrected.
As I went through some stock market news the Cyprus story has in a way set fire on another fear. Most are now thinking that it will start another Euro financial crisis that we have experienced with Greece. Also in the local scene the upcoming mid-term election might bring some negative effect on the market and the ability of the Pnoy administration will be tested if peace and order will be maintained in such chaotic times.
So with all that I still believe the Philippine Stock Exchange Index is okay and investing while prices are low they will definitely go back up. What the PSEi is experiencing right now is the correction to put the correct valuation to the seemingly overpriced stock prices. It is just taking a step back to make two steps further.
But again this is just my opinion and as always trade at your own risk.