Sunday, January 07, 2018

Market Outlook as at Jan 9, 2018

For the past 2 weeks, the market has been so charged up that many investors are blindsided and left standing at the sideline. Many are like the bears that had recently awaken from their hibernation, and standing in the Adams River in a full-blown salmon run. 

Today I will not talk about what stocks to buy. You have to look through the charts to get ideas on trading or investing. FBMKLCI has broken above the June 2017 high of 1795 as well as the psychological 1800 level. While correction may come any time now - and correction is not a bad thing - I believe any correction will not be long and deep. The market has an appointment to meet: 1900 sometime this year. That's not all! I believe that our market could potentially peak only in 2019. See my earlier market outlook (here).

Chart 1: FBMKLCI's daily chart as at Jan 6, 2018 (Source: 

Chart 2: FBMKLCI's monthly chart as at Jan 6, 2018 (Source: 

My July 2017 bullish market outlook is predicated on two assumptions:
1. US markets, which are at all time high, shall avoid a crash.
2. MYR shall avoid another bout of weakening.

From Chart 3 below, we can see that USD-MYR is now in a downtrend, with MACD below the zero line and the +DMI  and ADX are rising fast.

Chart 3: USD-MYR's weekly chart as at Jan 6, 2018 (Source: 

Some investors believe that MYR recovery is due to the improvement in crude oil prices. This may be true, and we can see that Brent crude oil prices are on a steady increase. However I believe the USD67-69 will be a strong resistance which may cap price rise for the next 2-3 months.

Chart 4: Brent's weekly chart as at Jan 6, 2018 (Source: 

If you are sitting on a pile of cash, this is a good time to lose the cash. By that, I mean you deploy your cash quickly in the market. Good luck!!

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