Technical View FCPO 19.12.2018

• Big gains in nearby positions resulted in forward premium narrowing. There were rumours of unavailability of tank space for tenders, forcing some short coverings. Sentiment is turning positive on seasonal strength from declining production in coming months. However bearish nearby fundamentals, with record high stocks expected in Dec, may cap the upside. Market look likely to trend sideways to higher.

• Technical view - Indicators are positive. The overbought situation indicated in the stochastic may bring some downward correction which should be buy opportunity.

• The final leg of the expanded triangle (wave c of (e)) is developing into a 5-wave structure stretching up to the extreme of upper triangle line, hinting the correction phase is coming to an end. The final subwave of c of (e) may further develop into a rising wedge before FCPO starts to dive in.

• As far as spot month (Mar19) is concerned, the overall correction of wave 4 takes in the form of ending diagonal. 

• It is worth to note that EW invalidation level @ 2137 is violated. It indicates that the next major downtrend may be limited to a certain extent.

• We will see what market offers today.

Disclaimer: This only for education purpose. Not a buy call or sell call from us.

Stock Analysis 19.12.2018 : Nike Inc (NKE, NYSE, US Market)

• Nike is currently trading below the cloud of Ichimoku Kinko Hyo. With earning result will out on Thursday, we will expect the positive result from that and Nike can go up to the cloud.

• We expect the short term of Nike will be bullish after the earning result announce this Thursday. The price can go up to upper cloud with target price of 75.97.

• However, please be careful as Nike is still below the cloud which mean its still bearish until the significant signal of bullish already appear.

Disclaimer: This only for education purpose. Not a buy call or sell call from us.

Market Outlook 19.12.2018

Dear all,

Last night, US dives 500 points ahead of FED interest rates decision this coming Wednesday. Donald Trump tweeted his support towards FED raising interest rates. This statement had contradicted with his previous slamming on FED’s action of increasing interest rates.

Market investors and traders are still uncertain on the next move by FED. Many expects FED will increase interest rates on Wednesday, however with slowing down economic growth FED might think twice on increasing interest rates. Also, with recent Federal Reserve Chairman, Jerome Powell indicating interest rates are near neutral level.

The KLCI close lower by 6.31 points or 0.38% to close at 1635.31 following US Dow’s drop last night. Losers edge gainers by 699 to 222 while 983 counters remain unchanged. Volume was higher at RM1.8426 billion as compared to at RM1.1739 billion.

Falling crude oil prices have add on some pressure for our local market. Crude oil price fell below the $50 psychological support hinting for further downside to come. $50 crude price is roughly 30% lower than our $70 price used in our budget 2019 estimates. With falling crude oil prices, there will be concern on government’s ability to meet its budget deficit target.

Will there be any year-end rally or the ‘Santa rally’ globally to close the year 2018?

With most of the indices worldwide trading below its 50-100-200 moving averages, we are in doubt of a strong closing on year 2018. Traders and investors are strongly advice to trade with care and be defensive in markets like this.

All the best for a great Wednesday but be cautious as the overall sentiment of our market is bearish.