Top 6 Green Technology Stocks In Bursa Malaysia

 

Trading With Fibonacci

Fibonacci retracements are often used as part of a trending strategy. In this scenario, traders observe a retracement taking place within a trend and try to make low-risk entries in the direction of the initial trend using Fibonacci levels. Traders using this strategy anticipate that a price has a high probability of bouncing from the Fibonacci levels back in the direction of the initial trend.

The following is the recorded webinar on how to trade with Fibonacci in Chinese.

Top 5 Consumer Non Cyclical Stocks Under RM5

 

Non-cyclical stocks repeatedly outperform the market when economic growth slows. Non-cyclical securities are generally profitable regardless of economic trends because they produce or distribute goods and services we always need, including things like food, power, water, and gas.

Top 10 Most Paying Dividends Stocks in Bursa Malaysia

 

Is Stock Investment A Passive Income or Active Income ?

 

Many people say property and share investments are sources of passive income. Well, yes and no! No doubt, if you are a value investor that practices long term hold strategy, you may not sell your share until 5 or 10 years later. Hence, you get dividends and capital appreciation during the holding period, and yes that’s passive income. However, as an investor, before we buy any investment, be it properties or shares, we need to “actively” searching for the relevant information available to us, and to scan for any fundamental problem for the particular investment that we are buying, as there must be a reason why a certain investment is too cheap.  

 There are many sources of information available in the stock investing business. One good source is the analyst report. Analyst reports are generally written to offer to investors as to whether to invest in specific companies or industry sectors.

Reports may focus on recent financials and their expected share price movements. Valuable insights are provided when analysts write about the current and future outlook for the state of the industry, based not only on financials, but on interviews with top management, a review of peer performance and macro/micro economic indicators, among other inputss.

Our stock market is very much driven by so called “investment themes”. During the covid pandemic, investment theme surrounding the health care and technology sectors took off. Now the investment theme seemed to have shifted towards vaccine and "opening up" sectors. If you have caught the right trend, you would see your portfolio shine like a diamond! Hence, we must breathe the same air as other market participants, but don’t follow the trend blindly. Stay objective and try to make decisions based on probabilities and reasons.

Hence, from today onwards, give yourself some time to read the analyst reports every week, it doesn’t matter how much you can absorbed, at least by browsing through them will give you some investment ideas.

 Happy investing,

 

The US Pump Priming Is Working Well For The Stock Market

For the past one week we saw the US S&P500 index has crossed its 200 day MA for the first time since February before the outbreak of the pandemic.The 200-day MA is a technical indicator used to identify and analyse long term trend. Above 200 day MA means long term bullish and vice versa. The NASDAQ has crossed has crossed above this line more than one month ago. The Dow Jones Industrial Average which represented the top 30 largest cap stocks in US is still lagging behind with the index still below its 200 day MA.


The prime pumping by the US government has proven to be quite effective with a V-shaped recovery in the stock market. It would be difficult to imagine if the US government can do this again should there be another black swan event within 1 year.

The retail investors are the major participants for the US stock market during this pandemic. This article indicated how the retail investors took over the US stock market https://www.zerohedge.com/markets/how-retail-investors-took-over-stock-market. 

In the above article, the chart indicated that the clients positions in stocks with Robinhood (A US brokerage firm) has more than doubled since the US lockdown. For you information, it is currently commission-free to trade in many of the US trading platforms. With zero cost to the retail investors, they are making a big wave into the stock market.

In Malaysia, although we do not have zero cost in trading, but many Malaysians do realise that the pandemic led recession is an opportunity to make money in the stock market. We can see that in our market participation statistics that the local retail investors had became the net buyers of the local stocks during this period as well. https://www.bursamalaysia.com/market_information/market_statistic/securities

What happened to the economy? Are we not seeing all the negatives in the economic data? Yes, but our stock market is driven by sentiments and emotion. When investors see the massive stimulus package initiated by the governments around the world, the sentiments helped to put more liquidity into the stock market as the interest rate is historical low. Here is a macro view of the stimulus packages around the world: https://howmuch.net/articles/worlds-economic-programs-against-coronavirus

As you can see that the extent of the stimulus is unprecedented.  The governments are applying expansionary monetary and fiscal policies to help stimulate the economy regardless of how much debt burden will be added for this round.


 Below are the trading range for the 3 markets namely the S&P 500, KLCI and the STI:

S&P 500: The S&P 500 gained 25pts or 0.8% for the week at 3044. It also gained 191 pts or 6.6% for the month of May. The index has now crossed its 200 day MA which is another milestone, besides its 50% retracement milestone. Technically, the US market is bullish and looks like the trend will continue further.The trading range is between 2975 to 3075.

KLCI: The KLCI gained 36pts or 2.5% for the week at 1473. On a monthly basis, it gained 65pts or 4.7%. The index is above the 20day MA but below the 200day MA. The index has been bullish led by the rubber glove industry and the local retail participants. What happened to the economy? Well, at this moment retail investors are overly excited about the stock market and they will temporary ignore the fundamental for now until we encounter another bad news. Next week, we are looking at the support at 1430, resistance 1500.

STI: The STI gained 10pts or 0.4% for the week at 2510. For the month of May, it lost 113 points or -4.3% for the week. The index has underperformed the regional markets together with the Hang Seng Index.  Currently the index still remained at below both the 20 day MA and the 200 day MA. Next week trading range remained at between 2475 to 2575.

KLCI Historical Chart 1981 - 2020

  
It is our belief that history repeats itself in the stock market because human nature and investor psychology don't change. Therefore, analyzing historical charts can be a helpful guide for interpreting current and future market trends.

Personally I pay close attention to the KLCI historical data and charts. A few years back, while many were forecasting the next stock market crash was in 2018 but I had a different view. I was comparing the relationship between the Malaysia stock market with the GDP growth rates and based on the figures (if history were to repeat itself) the next market crash (that will lead to recession) should not be 2018 but a much later date. I will not disclose the year here but to let yourself do the calculations yourself.

(Chart By Bursa Station: http://www.bursastation.com/?page=download)

The diagram above showed KLCI 1982 to present. The 2 circled represent some similarities despite it is 20 years apart. 

• The bullish years are: the year ending with 1,4,7 (with + or -1 yr)  

• The bearish years are: the year ending with 2,5,8 (with + or - 1 yr) 

 In addition, there were not many years that our GDP growth registered a zero or negative, and the years were: 1975, 1986, 1998, 2009, hence according to this pattern, if history were to repeat itself, you should be able to deduce the next recession year.

The above are just my personal opinion, there is no guarantee that it will occur as stated above.  Nevertheless, it is no doubt very interesting to study the history in order to have a better understanding of how our stock market works.

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