Tuesday, November 29, 2016

Market Outlook as at November 29, 2016

Our market is now taking direction from the way MYR is trading. At lunch time, USD was trading at MYR 4.46 - not far from the high of 4.48 recorded in September 2015. A convincing break above the 4.50 mark may send MYR to 4.90-5.00. And, that's why foreign funds are selling in our market. They are anticipating MYR to breakdown and the stock market to go into a selldown. If this scenario pans out - MYR weakens (say by 10%) and stocks tumble (say by 10%) - today sellers would "make or save" a lot of money (about 20% in this example). Before you join in the fun, you should bear in mind that technical resistance levels (such as the 4.50 mark for USD-MYR) should be respected. They are there for a reason! Failure to break that resistance could set off a decent rebound!


Chart 1: USD-MYR's wekly chart as at Nov 29, 2016_12.30pm (Source: Investing.com)

There is two sides to a coin. MYR is very much a victim of a strengthening USD. You may note that USD Index (below) has broken above its resistance. Thus USD may strengthen further.


Chart 2: USD's wekly chart as at Nov 28, 2016 (Source: Stockchart.com) 

The strengthening of USD only tells one side of the story; our MYR is weakening against many other currencies! Look at the SGD-MYR chart below. SGD is now trading at the September 2015 high of MYR3.13. Thus it is critical that MYR must stage a strong rebound now or else we may fall into the abyss! 


Chart 2: SGD-MYR's wekly chart as at Nov 29, 2016_12.30pm (Source: Investing.com) 

A quick look at our indices shows that most of them are drifting to their strong horizontal support. For FBMKLCI, FBM70 and FBMSCAP, the support that we hope will not be violated are 1600, 12500 and 14000 respectively.

 
Chart 4: FBMKLCI's monthly chart as at Nov 29, 2016_12.30 (Source: Shareinvestor.com)  

 
Chart 5: FBM70's monthly chart as at Nov 29, 2016_12.30 (Source: Shareinvestor.com)   

 
Chart 6: FBMSCAPs monthly chart as at Nov 29, 2016_12.30 (Source: Shareinvestor.com)    

Meanwhile, FBMACE is already at its strong horizontal support of  4800. 


Chart 7: FBMACE's monthly chart as at Nov 29, 2016_12.30 (Source: Shareinvestor.com)    

Of course, there is always a black sheep in every family! FBMFLG - the index for the weakest stocks - is showing us how to live life to the fullest.


Chart 8: FBMFKG's monthly chart as at Nov 29, 2016_12.30 (Source: Shareinvestor.com)

Our market is now a buyers' market. If you are looking for bargains, you will love this market. If you exercise careful discretion, carry out due diligence and observe strict discipline, you will get many bargains that will reward you handsomely in the months and years ahead. Good luck!


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2 comments:

  1. Black InkThursday, December 01, 2016 5:31:00 PM

    Hi Alex,

    How do I get a complete list of the FTSE Bursa Malaysia Fledgling Index constituents?

    I can't seem to find a list on Google for the life of me.

    Thanks

    A

    ReplyDelete
  2. Alex LuFriday, December 02, 2016 9:49:00 AM

    Hi Black Ink,

    I wrote to Bursa Malaysia in April 2012 to enquire about the Industrial Products index. My questions were:
    1. Is this index also known as the NST Industrial index?
    2. What are the components of this index?
    3. How is this index weighted?
    4. Has there been any new stock added to this index or any stock removed from it recently?
    5. Who maintains this index?

    I enquired about this index (0300I not Ind-Prod index, 00002I) because it dates back to 1984. That's just as long as FBMKLCI which dates back to 1977 (as per Shareinvestor.com). Unlike FBMKLCI which was adjusted a few times, Industrial index would be "purer" for technical study.

    Unfortunately this is the reply I received:

    Thank you for your enquiry. as per your request, most of the information are available in below link:

    http://www.bursamalaysia.com/website/bm/market_information/index_components.html

    We offer a wide range of historical data products / market data on our securities, derivatives & Bond markets.

    Please visit our website at http://www.bursamalaysia.com/website/bm/products_and_services/information_services/products.html

    for details of the data products. The subscription to the data products is accepted via email.

    Should you have any questions about our data products, please don’t hesitate to contact us again.

    *****

    Not satisfied with this reply, I called up and spoke to the relevant person. He explained that the website provides information on FBMKLCI only. I would have to subscribe to get the information on the other indices. I abandoned my study on the Industrial index. Your question will find the same fate as mine unless you are prepared to subscribe for the information. The alternative is to approach your stockbroker to check whether it subscribes to the service provider. If it does, you might be able to request for the data. Good luck.

    ReplyDelete