Technical analysis will not be able to forecast stocks movement. It has to go back to fundamental of each stock. The latest trade war will cause Asian market turn into red. Exporting companies which competing with China product will be benefited in this condition.
Back to local market, Bank Negara has cut its overnight policy rate to 3% on Tuesday. The reduce in interest rates can offer monetary stimulus to the economy as the US-China trade war continues to pose downside risks to growth. The interest rate cut has further weaken the RM against USD as we can see that the trend is raising steadily upward beginning at the end of March. It will further benefit export sectors in Malaysia.
Stocks with possible bullish:
Gkent is closed to break the bullish trend. It is critical moment to monitor the stock movement. But it might not able to stay positive as the uncertainty news from trade war. With the weakening of RM in this period, it will provide extra foreign gain for Gkent metering division.
If the price does not break below support line and stay above RM 1.19, it will be an uptrend. Buy when rebound.
Kenanga Research said the oversupply concerns affecting the rubber glove sector appeared to be overplayed and that this would only be a temporary rough patch.
Glove maker will see better quarters ahead with the recovery in demand and average selling prices (ASPs) as well as the weakening of the ringgit against the US dollar.
Interestingly, industry ASP pressure is well contained, ranging between US$21 and US$23 per 1,000 pieces as compared to the previous downcycle in 2016 ranging between US$19 and US$21 per 1,000 pieces
Overall, Harta is worth to monitor next week, grab at low when there is panic sell happen. In coming quarter, Harta is definitely doing better than this quarter. Target price to collect at RM 4.80.
Homeritz and Pohuat are potential winners of the trade war and interest rate cut as both companies are exporting furniture to US and Europe.
IGBreit is moving in sideway with positive momentum. Hence, I believe it can make another touch at RM 1.90. The recent interest rate cut has brought attention to REIT sector. But i believe the price has already factored in as market majority forecast that Bank Negara will cut the interest.
While Pavreit will have a little slow momentum compared to that of IGBreit. It will also hit the resistance line at RM 1.85.
However, REIT have already overpriced, somemore, not much margin to move up. Therefore, the risk to buy now is definitely high.
On the other hand, banking sectors will oppose with REIT movement. CIMB and Maybank stock prices have slumped a lot after Q4 FY18 reported. Both stock are still moving in bearish trend. I believe the downtrends are almost ended.
After the announcement of interest rate cut, both banks reacted fast to reduce their interest rates. The prompt action will potentially pull some fresh loans from other banks.
Stock that turn into bearish trend:
Annjoo price has broken down the support line. Hence, bearish trend initiated. Next support line will be RM 1.49-1.51. At this point, investor should execute cut loss when necessary.
Same goes to VS, the stock price has broken below its support line. The price will move in a major down trend with possible of 3 motive waves. As market worries with the latest report of lower revenue recorded from electronic industry.
Gadang after announced the private share placement news, the stock have loss momentum and fall near to the support line. I anticipate that the price will move within the range of RM0.79 - 0.87 when it reaches its support line.
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