Last Week's Round-up

I am posting Chap Ayam Market Research Report here to show how the market did last week as well as what are his predictions for this week.

On weekly basis, Malaysia shares expected to extend gains next week, possibly test all-time high of 1391.57 after ending +0.4% at 1382.36 in moderate volume; market breadth remained positive with gainers beating decliners 549 to 305. Both local and foreign funds were accumulating a range of blue chips and index-linked heavyweights. The ringgit's strength against the U.S. Dollar was a major contributor in attracting foreign fund. Speculation of FX trade liberalization cited as core reason for ringgit's strength; USD/MYR at 3.4140 late vs. 3.4520 late Thursday. However, going forward we are still lack of major catalysts. We're still in a consolidation mode right now pending the August earnings reporting season. The market's upside trend for the next 12 months remains intact.

I think barring sharp reactions to Wall Street, market will at best inched upwards in a rolling fashion, some day up and some day down, ending this week in plus territory. Volume indicator signify market broadening and more retail involvement.

If it is true that foreign funds are here chasing ringgit denominated stocks particularly index-linked blue-chips because of the potential strength of the ringgit, then the additional liquidity will b good to high-tail the market beyond the 1391 resistance level currently in the way. It may also move beyond 1400 on an intra-day high but perhaps may not maintain itself at that psychological level.

Let us see how Chap Ayam's predictions pan out.

Heartsong