My Market Observations
What Next For The Markets?
Since my last article, stocks and commodities have rallied very strongly, Crude palm oil (CPO) has moved up from RM3900 levels to the current RM4170 level. KLCI has also hit multi month highs closing at 1520 versus 1410 levels a month ago. So where do we go from here and what should we do with our investments?
CPO price has another leg down
So we have digested a lot of data last week with regard to CPO and also the US agriculture markets. MPOB released its monthly supply and demand data which was pretty much in line with market expectations. This sparked a nice buy the news rally which saw prices touch RM4495 on Friday before retracing to close RM4420 that day. It has seen pulled back further to close at RM4168 today.
Meanwhile the data released by USDA in its monthly WASDE report was deemed bearish with end stocks higher than expected which sparked a selloff in the US agriculture markets notably in the soybean complex on Friday.
Short term CPO futures is a sell
I have exited all my CPO longs which were initiated 1,5 weeks ago at RM4450(half on Friday) and balance at RM4300 today. Plantation stocks performance have also been disappointing versus the overall market. I believe it is still grappling with peak earnings concern and hence the price reaction compared to the gains in the futures market has been lagging badly too. I have also decided to exit my basket of plantation stocks for a small profit of 7%.
I believe there is another leg down in the CPO futures market with a retest of RM3800 likely in the next couple of weeks. As for plantation stocks, we should see how price reacts to the quarterly earnings reports which are slated to come out by month end starting with KLK reporting tomorrow.
Tech stocks and political stocks are in play
Money still seems to be flowing into the technology and growth sectors .Many of these stocks have outperformed the overall markets with nice gains of over 20% in the last 2 weeks alone. Another sector that seems to be in play is election theme stocks and political linked counters. As with past General Elections, this sector tends to heat up 4 to 6 months before the actual event.
My strategy for the near term
I remain fully invested in technology stocks and have moved my funds from the sale of plantation stocks into some General Election linked stocks like KPower Bhd and KUB Bhd. Sector rotation and thematic plays are key to making the best trades in the current market environment. Also to keep in mind that risk management has to be placed whenever a trade or investment is made and there is no such thing as 'buying and locking it up" for long term as advocated by some irresponsible writers.
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Rex Bhd is a laggard in the Food and Beverages Sector but may not be for much longer?
Created by skoh888 | Jun 02, 2022
Discussions
2 people like this. Showing 26 of 26 comments
your market timing has been spot on from your previous articles. Thank you for sharing!!
2022-08-16 22:40
Thanks for your view on the shorter term market trends. Not a trader at all so I'll hang on to my plantation stocks in the meantime pending quarterly earnings results and market response. Election theme stocks can be risky plays.
2022-08-17 10:47
@Berlin...nice to hear from you. Yes short term trading is the toughest business to be in but tape reading and price action is what I am best at. The end goal should be the same and that is to be profitable, unlike some clowns who put their egos on the line and have the need to be RIGHT despite huge losses to their acts!
2022-08-17 16:18
Thanks for your article, buddy. Suggestion : Give it a rest regarding that dude. Don’t get hung up on it anymore. In fact, laugh about it. Focus on what you do best. And on yourself
2022-08-17 16:21
The thing is everyone behaves and act differently depending on scenarios. I mean, look at me. Who would thunk I’d go into gloves at this time? I never wanted to go into gloves. But I did. On Monday. In TG. Coz I spend time monitoring the trades daily, analyzing the momentum, the queues, the IDSS
But I only did this coz I had time. Berlin, for example, is almost certainly an astute and learned investor and very rarely trade. Everyone’s different. Most important thing is protecting capital. Profits are a bonus
2022-08-17 16:27
@anthonytkh; The most money I ever made was when I bought into an out of favor stock for a fraction of its potential and held it for more than 10 years through thick and thin. I cashed out most of it when the majority shareholder made a GO as I suspected he would. I still hold some. As for short term trades, my track record is not good to say the least as I hate to cut when I really should. I think skoh beats me hands down there.
2022-08-17 16:40
Berlin, it’s good to follow a strategy and innate research that’s been proven to be good for you. Your comment very closely resemble something I’d been doing the past month. I’d been nibbling at Inno. The interest in the counter is very low (to say the least) as witnessed by the volume and queues. I bought at 1.23 and stopped buying at 1.28
I’d hinted about this in the TSH thread (more than once) although I can’t recall if I’d ever identified Inno over there. This is my bet regarding GO on Inno
2022-08-17 17:01
Skoh, do you remember the very first time I commented in the TSH thread with a coupla hints that was something along the lines of :
“I’m gonna have a dialogue with Yall Better Sit-tight”
You recognized my latter hint ie. YBS (circa round bout 0.500 back then) and I hope you are happy with it. But you unfortunately said nothing bout my first one ie. “dialogue”. It was just north of 2 bucks at the time. Perhaps my teases and riddles are frustrating :)
2022-08-17 17:30
@anthony...haha I think my comments on YBS got sandwiched amidst the trash in the TSH forum...I actually gave you a big thank you after I sold at RM0.63 for an almost 30% profit! Thanks again bro!
2022-08-17 18:31
@anthony...I do remember Dialogue was at RM2.18 when you mentioned it...but I was buying lots of tech at that time which has done well too '))
2022-08-17 18:33
@berlin...always enjoy a good banter with you bro from basketball to stocks and money heist!
2022-08-17 18:34
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2022-08-16 22:34