The FBM KLCI endured a choppy trading session before bargain hunting activities took charge to power the key index higher yesterday. For now, we reckon that the local bourse may attempt to find stability with nibbling on beaten down stocks. Although the prevailing negative market sentiment is deterring investors to take large positions, the lower liners may continue to see rotational play, boosted by the higher than historical average trading activities.
26th Aug 2020 – Technical Focus
It was another bleak performance on the local bourse that was marred by the selling pressure from gloves heavyweights yesterday. The near term weakness is expected to prevail as any recovery will be tempered by quick profit taking activities. Nevertheless, we still think that rotational play will remain on the table that is buoyed by rise in trading activities as of late, though the negative market sentiment are also keeping gains in check. Hence, we advocate traders to lock in quick profits, avoiding to holding position for too long.
Overall (after testing for 55 days live in our virtual portfolio), we have some positive days near to 56%, while positive trades just slightly above 50%. You must be asking why the virtual portfolio could stand out so well at above 30% returns?
I-Stone is regarded as a proxy to the rising adoption of automation amongst companies in order to improve production efficiencies & capabilities and to maintain a leaner operational cost structure. Key clients include EMS players like Dyson, V.S. Industry Bhd and ATA IMS Bhd. Capitalising on the adoption of fourth industrial revolution (Industry 4.0) with
opportunities under the field of artificial intelligence, big data, robotics and the leasing of automated lines and equipment. Technically, a flag-formation breakout above RM0.215 may lead to further upsides towards the next resistances at
RM0.24-RM0.265 with long term target at RM0.28.