Newton’s Law Reappears on Several PSEi Issues!

Down by a measly 1.08% for the week, the Phisix remains at a lofty 7,845.

But headlines don’t reveal of the real story.

There seems to be a developing divergence in price actions within the PSEi 30. 

For now, three characters of price actions can be seen: non record vertical price movements, adrift at recently established record highs from latest vertical run, and finally, the reappearance of Newton’s Third law of motion “For every action, there is an equal and opposite reaction”

The breakdown:

-An incredible 7 issues are within striking distance 5% less to new record highs.

-Two second tier issues seem as on a vertical ramp

-Finally the reappearance of Newton’s Law as seen in 7 charts below. 

Note: not all charts indicate the same degree of Newton’s law. Some have shown major symptoms, this includes JGS, URC and GLO. The minor ones are AEV, PLDT, ALI and MBT.

The jury is out as to whether these issues will be pushed up by the record drifting counterparts or if they instead will drag down the rest with them.

Surely, given the record valuation levels and the recent spate of vertical price actions, it’s easy to see how history has been unfolding.

As I recently wrote,

In short, the current vertical trend itself is structurally unsustainable.

At best, it would need to take some of the froth off through a lengthy process of consolidation. From here, fundamentals should grow more than enough to offset the recent price pumps.

At the norm, it would suffer the same Newton’s Third Law of motion dynamic as its 2013 and 2015 predecessors.

At worst, the PSE would suffer from a crash that would be more than the Newton’s law.

The reemergence of the Newton’s Law suggest that for now the PSEi may take second route. But of course, the BW-SSO final blast off phase could still be a possible option. 

Interesting.