Where is the KLCI headed to?
The
KLCI Index has been on a strong upturn since the early of this
year which has been a great sight after what we experience for the past 3
years.
Fundamentally
KLCI has been supported by a stronger ringgit, the rebound of oil
prices as well as better than expected economic growth. It has helped
that these positive news has also coincided with the beginning of the
year where typically large funds and institutional investors would add
into their portfolios after they have cashed-out their 2017 profits at
end of December. Typically Jan is where a lot of buying activity
happens.
It hasn't been different this year and foreign buying has also been strong with the last 4 weeks particularly encouraging.
There is nothing to not like if you are an investor but traders should continue to focus on the trend at hand.
End
of last year we tracked the index and we expected a reversal which
happened. We expected some resistance at the 12 month highs but as we
mentioned earlier in this article, strong fundamentals likely pushed the
index beyond where it should be tested.
Based
purely on the momentum we do expect the index to hit the all-time high
by May or even much earlier if market buying continues to be strong.
Strong fundamentals means that if the event the market does lose some
steam - it will likely be supported near the 1770-1800 levels. We would
have to see some change in economic conditions or selling pressure for
it to drop below this levels.
However
at the current moment in time - we are somewhere between high-tide and
low-tide. Its not too bad to buy in now but it wouldn't be where you can
maximize you returns or at least expect to with the data is available.
However
if you are looking to invest in the KLCI this year (and we mean this
for those who can hold beyond 6 months) - its a good time with the KLCI
looking extremely friendly for 2018.
https://www.laburlah.com/single-post/2018/01/29/Where-is-the-KLCI-headed-to
https://www.laburlah.com/single-post/2018/01/29/Where-is-the-KLCI-headed-to