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.