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Friday, January 29, 2016

MYR Recovery Begins?

In November last year, I posted about a tentative MYR recovery. Those in the market long enough will learn -as I did - that markets have a perverse way of proving us wrong at every opportunity. That call was no exception.

USD-MYR & SGD-MYR actually went up after the November call. However today our MYR strengthens against both these currencies- set the stage for a possible bearish reversal. See the two charts below.

 
Chart1: USD-MYR's weekly chart as at Jan 29, 2016_10.45am (Source: Investing.com)


Chart 2: SGD-MYR's weekly chart as at Jan 29, 2016_10.45am (Source: Investing.com)

In my earlier post, I have recommended that investors should take profit on those trades that were based on a weakened MYR. If you have done so, you would be a happier man. See the sharp drop for rubber glove producers below.


Chart 3: Harta's weekly chart as at Jan 29, 2016_10.45am (Source: ShareInvestor)


Chart 4: Topglov's weekly chart as at Jan 29, 2016_10.45am (Source: ShareInvestor)


Chart 5: Kossan's weekly chart as at Jan 29, 2016_10.45am (Source: ShareInvestor)

On the other hand, you would have made a decent profit if you had positioned in the opposite side - based on a strengthening MYR - by buying into stocks which were weighed down by USD borrowings (example: Tenaga) or importers (examples: automakers).

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Harta, Topglov, Kossan & Tenaga.

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