[OIL GAS AND PROPERTIES TO LEAD HARI RAYA RALLY NEXT WEEK] Salam Ramadhan. My quick Bursa forecast after having two crowded seminar today. TEN points for Bursa next week : Whether we are aware or not, FBMKLCI is still strong and has gained 5.6% over the past five month (FBMKLCI gained 5.6% Feb-July). The latest shot down of MH17 will be a fantastic buying opportunity as nervous investors take profit next week. Based on MH370 incident, the latest airlines disaster should be a good buy-on-dip opportunity for most Birsa stocks. Last case, FBMKLCI dipped 30 points or 1.6% for eight days immediately after MH370 disappear on the 8th March 2014. FBMKLCI made a subsequent rally gained 68 points or 3.7% eight days after the incident. Expect more flight-to-quality trade with FBMKLCI to stage short term correction weighed down by global equities/commodities dip and a risk-off vibe across most safe haven assets. Four strongest asset now : (1) Nasdaq (2) Dow Jones (3) S&P 500 (4) Yen (5) Dollar (6) USA Bond (7) Germany Bond. Four bearish catalyst : (1) rising geopolitical concerns in Ukraine/Russia rising (2) conflict in Gaza/Israel (3) a rating downgrade in the troubled Portuguese bank (4) Imposition of fresh sanctions on Moscow by the USA/EU. On Thursday, we see a mini crash and the biggest one-day-fall-in-three-month on the Wall Street and European markets (Dow Jones, S&P 500 lost 2.2% and 2.4% before stabilized immediately on Friday. CBOE Vix equity volatility index climbed 36% and headed for its highest close since April 2014. The latest airlines disaster should temporarily foster a pullback in risk-taking sentiment as well as short term profit-taking in all major tourism stocks (MAS, Airasia, Brahim, Shang) after recent gains. From a bigger picture, Dow, MSCI All World and Bursa Malaysia are still on a strong uptrend and just within 2% of seven year high and all-time-high respectively. The latest global economic data remains positive which includes USA Philadelphia Manufacturing Index, USA Jobless Claim, USA Empire Manufacturing Index, Europe Inflation, British Unemployment Rate and China Money Supply. The Federal Reserve positive assessment of the economy and unchanged interest rate by Fed Chairwoman Janet Yellen should be a sustainable long term positive catalyst for stock market worldwide. The merger of three big banks (CIMB, RHB and MBSB) should kick-start a new government reforms and liberalisation wave to boost investor confidence with Maybank, Public Bank, BIMB, TA and Apex to be the next merger targets. On the technical front, the local benchmark appears to be forming a bullish cup and handle pattern sandwiched between 1860 support and 1880 resistance levels with a slow sideways grind on lower volume. Overall, despite the external blips, FBMKLCI maintain its slow bullish edge leading to another accumulation base before marching higher. My Top Featured Stocks are mostly oil gas and properties : SP Setia, Huayang, Tambun, YNH Properties, A&M, Cresbuilder, CMSB, OSK Properties, Yinson, KNM, Muhibah, Sumatec, Coastal, Fitters, KUB, TA, TAGB and Prestariang Berhad. Aggressive bulls might consider buying most global index futures including Bursa KLCI Futures on dips toward 1860, positioning for a larger jump to all time high of 1900. Finally, my heart goes out to all the families of the passengers and crew. Selamat berterawih dan bersahur.
Posted on: Sat, 19 Jul 2014 12:41:07 +0000
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