Wednesday, May 15, 2019

Market Outlook as at May 15, 2019

FBMKLCI has managed to climb back above 1600. The index may continue to go higher in the next few days though it may be interrupted by the public holidays on next Monday & Wednesday. After the short rebound - which may touch 1630-1635 - the market will likely drift sideways for a while due to global uncertainties such as geopolitical problems between US & Iran (impacting crude oil prices) as well as continuing trade war rhetoric between US and China (impacting global trade). 


Chart 1: FBMKLCI daily chart as at May 15, 2019_10.54am (Source: Malaysiastock.biz)

It is worth noting that USD-MYR has broken above the 4.15 mark, and it could rally quickly to 4.19-4.20. A break above 4.20 will bring out fear of economic problem in the country, which would depress the market sentiment.


Chart 2: USD-MYR daily chart as at May 15, 2019_11:00am (Source: Investing.com)

There will always be winners and losers if the ringgit were to weaken. The usual winners will be the exporters, and none would benefit more than the glove makers. You can see Harta has once again broken above its intermediate downtrend line today.


Chart 3: Harta daily chart as at May 15, 2019_10.45am (Source: Malaysiastock.biz)

As always, a sharp plunge in the market after a prolonged decline has a cathartic effect on the market players. We are seeing a relief rally today and we can adjust our position accordingly so that we will be better position for the next move. Good luck!

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