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Friday, March 03, 2017

Banking Stocks Are Hot Again!!

Yesterday, our market rallied as reflected in both FBMKLCI & FBM70 recovering above their respective uptrend lines. See the daily twin charts below.


Chart 1: FBMKLCI and FBM70's monthly chart as at Mar 2, 2017 (Source: Shareinvestor.com) 

As noted in my market outlook update yesterday, the underlying tone for the market - despite
lackluster retail participation, poor consumer sentiment & slower economic growth - has turned upward. This is reflected in the monthly chart for FBMKLCI with 3 important points to note:
  • MACD has crossed above the MACD signal line 
  • the index is above the 30-month EMA line, and
  • the 10-month SMA line has crossed above the 20-month SMA line
In the past, a triple crossover (my own term) has always led to an uptrend or the continuation of the prior uptrend.


Chart 2: FBMKLCI's monthly chart as at Mar 2, 2017 (Source: Shareinvestor.com)

The same triple crossover is also seen in the Finance index: That explained why we had a strong rally for banking stocks yesterday. This serves to confirm the market bullish outlook because we have never had - nor can we ever have - a bull market without banking stocks participation.


Chart 3; Finance's monthly chart as at Mar 2, 2017 (Source: Shareinvestor.com)

I have appended below the charts for 5 banking stocks. In my mind, Maybank, CIMB and Affin are poised to go higher. AMBank and AFG are now pushing against their respective downtrend lines. You can consider getting into Maybank, CIMB and Affin now. Watch out for the upside breakouts for AMBank and AFG.


Chart 4: Maybank's weekly chart as at Mar 2, 2017 (Source: MalaysiaStock.Biz)


Chart 5: Affin's weekly chart as at Mar 2, 2017 (Source: MalaysiaStock.Biz)


Chart 6: CIMB's weekly chart as at Mar 2, 2017 (Source: MalaysiaStock.Biz)


Chart 6: AFG's weekly chart as at Mar 2, 2017 (Source: MalaysiaStock.Biz)


Chart 7: AMBank's weekly chart as at Mar 2, 2017 (Source: MalaysiaStock.Biz)

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