Salam sahabat semua. Alhamdulillah. Selamat Hari Raya ke-8. Sakan beraya tahun ni. Mercun dan perut pun sakan juga :-). Finally, beraya seminggu tanpa internet. Terima kasih semua. Yang belum beraya, jumpa di pejabat besok ! Ok done. My brief market updates next week. TOP TEN BUY STOCKS : Sumatec, Sentoria, PMetal, KUB, L&G, Scomi, TalamT, Johan, Fitters and Asiapac. MARKET DIRECTION : Down. Bursa suffered the worst week in nine month. We see a major medium top. Reason : Federal Reserve to increase interest rate as economy speed up. AGGRESSIVE STRATEGY : Short KLCI Index Futures. Short CPO Futures. Short Dow, S&P, Nasdaq Futures. Short Pound & Aussie Futures. Short Oil, Corn, Bean, Wheat Futures. Buy USA Dollar & Gold Futures. Avoid Blue Chips. Buy Small Cap Stocks On Dips. xxxxxxxxxxxxxxxxxxxxx FEDERAL RESERVE RATE DEBATE AND BANK COLLAPSE DEBACLE CONTINUE, SHARP DOWNSIDE FOLLOW-THROUGH KEEPS BURSA BEARS IN CONTROL FBMKLCI is set to dip further next week amidst rising global volatility with a a combination of rising interest rates and European debt collapse reinforcing fears that the worlds stock market are sliding back into a breather. FBMKLCI therefore should consolidate further dominated by mounting speculation that the Federal Reserve might raise interest rates sooner than expected. The cautious mood was also evident across the Asian region as further evidence of economic weakness in the Eurozone was exacerbated by growing concerns over the collapse of Portuguese lender Banco Espírito Santo. From a bigger perspective, both Bursa and global stock markets closed out the July month on a distinctly negative note, after news of a strong rebound in the US economy helped fuel concerns that a Federal Reserve interest rate rise could be closer than previously thought. Other areas of concern for equity markets come with a number of geopolitical headwinds, Ukraine-Russia as well as Gaza-Israel and the debt default situation in Argentina. FBMKLCI therefore could extend recent losses, with a number of headwinds keeping the bear camp in control. Both MSCI All World and FTSE All World are down 1.8% and 1.6% w-o-w respectively with some concern Fed rates may be on the offing after the strong USA GDP in the second quarter. There was bearish reversal action in FBMKLCI, despite the early week stabilisation above 1860 support level. All of the major European indices were down by more than 1%, with the German DAX and UK FTSE down 2% suggesting more minor contagion from the Portugal debacle. There was added weakness in Europe in the wake of slightly weaker than expected manufacturing figures from Germany, the Euro zone and Great Britain. The latest bout of uncertainty in the markets followed news that US non-farm payrolls had risen 209,000 last month and scored the sixth successive increase of more than 200,000 over the last six month, suggesting a strong economic recovery. On the technical front, we believe the global market was already experiencing a buying fatigue after having six straight upside month since the February peak, hence we are not surprised to see investors mopping out bargains ahead due to the attractive size of correction. We see an aggressive round of profit-taking mixed with fresh selling interest comes on ideas that the local blue chips has been overextended. The local benchmark appears to be forming a lateral pattern sandwiched between 1860 support and 1880 resistance levels, with a slow sideways grind on lower volume. Weakness below the bottom end of this range at 1860 would favour a larger decline targeting 1840, which is also the 200 moving average line. The near term bias in the local index clearly goes to the bear camp, with support at 1860 and 1840 levels while resistance coming in at 1880 and ultimately 1900 psycho level. Daily stochastics has turned lower suggesting a decelerating upside momentum but the markets close above the 50 and 200-day moving average is an indication the medium and long term trend still remain positive. Overall, prospects for an improving US economy and the Fed pulling away from their loose monetary policy provide the catalysts for a corrective setback in global equity markets including Bursa Malaysia. Upside action has been fierce in recent month and has become technically overbought on a long uptrend basis. Aggressive bulls might consider using early strength to short KLCI futures, positioning for a dip towards 1840 level. Given the cautiously optimistic post Hari Raya sentiment, stock bulls may want to avoid blue chips and buy our Top Ten featured speculative stocks namely Sumatec, Sentoria, PMetal, KUB, L&G, Scomi, TalamT, Johan, Fitters and Asiapac. Dr Nazri Khan First Vice President, Affin Investment Bank President, Malaysian Association of Technical Analyst (MATA)
Posted on: Sun, 03 Aug 2014 13:22:09 +0000
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