The KLCI is meandering in a sideway mode and traders should wait
for more corrective action to occur, which will likely tell
the extent of its longer term corrective trend, whether
shallow or impulsive.
The broad market continues to be weak and it is a
selective stock picking market for gains to be made.
Should you be aggressive or defensive at this juncture?
It is critical that you are not caught in the wrong sectors at this
stage. Take positions only in sectors highlighted in the MPower Algorithm Report
report as you should not ignore the macro
factors at this critical juncture in the market.
Of latest interest would be the rise in oil price, which
fundamentally appears to be more speculative rather than
fundamentally-driven on Iran sanctions by the US.
A break of US78.65 for Brent futures (Oct delivery) is spurring
attempted rally towards two key levels in the future. On the downside,
a break of this critical level would certainly be the first warning of a
decline towards the strong support level. Watch these levels
highlighted in the MPower Report to enter or exit your exposure to
oil and gas stocks.
Oil price could spurt on geopolitical concerns and headline
news but the rally needs more momentum soon above
its recent high.
As such, traders need to keep a very tight stop loss on oil
and gas stocks (of which the outlook is rather mixed) but
the sector is Overweight until oil prices break below the
abovementioned levels so watch the above levels.
Out of the 19 oil and gas stocks covered by analysts, you should watch
for action in at least six of them right now as highlighted in the MPower report.
Hibiscus Petroleum in our model portfolio list has performed very
well but you should exit the stock if it falls below its critical level as
highlighted in the MPower Report.