rakuten trade market reports : Page 21

US markets Dow Jones rose last week on the optimism China’s offers compromise to ease trade tensions and will raise penalties on violations of IP rights increases the likelihood of reaching a phase one trade deal as President Trump said he was “very close” to trade pact with China.
Back on the local front, we expect KLCI to cross the 1,600 level while we continue to see more trading opportunities in the small mid cap stocks and to follow our technical picks.

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US markets Dow Jones continue to fall for the 3rd day as the uncertainty of trade deal between China and US continues to be watched closely. China’s Vice Premier and chief trade negotiator Liu He is “cautiously optimistic” about reaching a phase one trade deal with US as seen to provide some comfort to the equity markets.
On our local front, on-going 3Q results have been encouraging even though the FBM KLCI continues to anchor at its support level 1,590 as we expect market to range bound at 1,600 level.
With YTD net foreign outflow in excess of RM9bn in our equity markets, investors will continue to set their sights and trade on the small mid-cap stocks that has outperformed the larger cap stocks.
We continue to see value in small mid cap stocks and any pullback is buying opportunity.

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News on the “phase one” trade deal between China and US may have hit a snag and dampened sentiments with the Dow Jones taking a hit notwithstanding on-going 3Q results has been generally good.
This is compounded by US senate passing of bill supporting Hong Kong’s protest which is widely seen as interfering with China’s affairs. Global markets movement is expected to be focused on the headline news.
On our local front, the FBM KLCI continues to hover at the support level at 1,600 and will continue to see rotational play among the small mid cap stocks.

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As expected, the uptrend on Wall Street finally relented as investors came to their senses.
Valuation on US equities seems to have outpaced their fundamentals following recent record high showings hence funds may have shifted to bonds as depicted by the US 10-year yield which had dipped to below the 1.8% level.
Locally, the FBM KLCI displayed a rather strong momentum yesterday as the index overcame initial selling to close above the 1,600 level.
We believe buying to continue thus anticipating the benchmark index to re-test the 1,610 today.

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In tandem with regional uptrend, the FBM KLCI breached the dreaded 1,600 mark again amid some window dressing activities.
We believe the benchmark index to trend at higher grounds today with the 1,610 as the immediate resistance level.
With liquidity pouring into the blue chips, we reckon the small cap space should also benefit and continue with its upward momentum.
Amongst others, our current favourite small caps are Kelington, RCE Cap, Vertice, LYC Healthcare and Bahvest.

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