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Friday, September 08, 2017

Market Outlook as at September 8, 2017

I like to share two interesting developments that may affect our market next week. 

The first thing is USD-MYR  has broken its uptrend line (see Chart 1 below). The movement in that currency pair simply means MYR is gaining on USD. This is due more to weakness in the USD than strength in our MYR. Because if our MYR is really strengthening, we should see SGD-MYR breaking its uptrend line. From Chart 2 below, you can see that SGD-MYR is still in an uptrend- for now.



Chart 1: USD-MYR monthly chart as at Sep 8, 2017_12.30pm (Source: Investing.com)


Chart 2: SGD-MYR monthly chart as at Sep 8, 2017_12.30pm (Source: Investing.com)

As I said before, MYR need only to stabilize for our stock market to regain its uptrend. While we await the strengthening of MYR, we need not be overly pessimistic about the MYR or the economy. I maintain my earlier forecast that our market is likely to go higher in 2018.

The second thought I like to share is the improvement in some sectors in the market. The second liner stocks, as represented by FBM70, are improving. Those who are sitting on their cash, should slowly nibble into beaten down stocks that may not get any cheaper going forward.


Chart 3: FBM70's daily chart as at Sep 8, 2017_12.30pm (Source: Shareinvestor.com)

I think you can consider getting some Plantation stocks or some stocks in the Trading Service sector. I don't have a laundry list of good stocks to look at, except Tenaga. Technology stocks are richly priced. I would take some profit in that sector.


Chart 4: Plantation's daily chart as at Sep 8, 2017_12.30pm (Source: Shareinvestor.com)


Chart 5: Trad/Serv's daily chart as at Sep 8, 2017_12.30pm (Source: Shareinvestor.com)

Good luck and have a nice weekend.

5 comments:

YC Chai said...

Agree...enjoy reading your write up on stock market...keep it up

Chong BK said...

Hi Alex,

What's your view on Armada? I see an inverse H&S pattern on its weekly chart...

Jason Lim said...

Enjoy your weekend too!

Alex Lu said...

Hi Chong BK

Armada is still undecided whether it wants to break to the upside of the downtrend line that stretches back to June 2015. If it can go above RM0.75, that could be a breakout. Since it has been here for the past 4-5 weeks - even above the downtrend line to as high as RM0.775 - I like to be convinced of a genuine breakout by substantial volume and ADX going above 20 on the weekly chart.

I can see your inverse H&S pattern with the neckline at RM0.83. If Armada can surpass that, it is definitely on the recovery. It would be a very safe BUY.

Alex Lu said...

Thank you, Jason & YC.