One up, one down. But which one?

Actually, it's very obvious which one is most likely (but never 100%) to move in the expected direction. Nevertheless, to profit from this, still boils down to ones strategy and how well their money and emotion management is. People tend to focus on a definite answer about the market but they have forgotten the basis of what the market is..and that is the market is an extremely big collective pool of people. Now, when there are so many people involved, this means the more emotions there will be in the market. Like George Soros once said, "It's not about whether you are right or wrong, it's how much you make when you're right and how much you lose when you're wrong". Brilliant words from one of the world's best traders. There is no "holy grail" strategy that will fit for all, it's more on what will one do when the market moves in a certain way.

Let's take a look at the two futures market in bursa:


FCPO

FCPO had a series of bad fundamentals which spells from strengthening of the ringgit right up to export data. With the ringgit strengthening and also Soy Bean oil going down, due to increasing supply and lower demand, FCPO tracked that and dented any bullish hopes in it. Adding that for Jan 1-10 exports fell 21% and with a surprise increase of stocks of 0.3% had hampered down FCPO price further. On the technical side, as we can see that FCPO had turned and fullfilled the bearish divergence between price and MACD-H. Prices are now trading way below all levels of EMA (12,22,32) and sticking to the lower band in the Bollinger Band. MACD lines have also tracked lower highs all the way which also shows a bearish divergence between MACD lines and also price. MACD lines had both crossed the 0 line and is at the negative region showing bears are currently in power which had been the case for the past week or so.


FKLI

It had been said that this year even with the foreign funds pulling out from the market, it's still going to be a good year for the equity market. ESPECIALLY index counters. Which in turn would direct FKLI movement too. With gold also gaining into highs, it had spurred Asian markets regionally to rise and in turn gave more boost to our KLCI and FKLI. Although with the GST coming in which actually is suffering for the rakyat but it is seen as a revenue for the markets as the index counters are always backed by the govt. It is also seen to have a "oversold" bounce back from the previous week's correction. This week there will be major companies in USA reporting on their earnings and hence, this will definitely move the market. With Intel and Microsoft being one of the many companies that reported positive earnings, FKLI is set to move further upwards. On the technical side, as we can see that FKLI is still trading within the uptrend line. MACD-H showing shallower histograms which is ticking upwards and also stochastics have also crossed upwards after several zig zags at its low. Notice a small candlestick pattern of a hammer on 7th Jan 2014, had actually given the signal that FKLI is ready to make a U-Turn upwards although there might be some selling activities but it's still on an upward movement. With the long green bodied candle on 13th Jan 2014, FKLI has shown that the bulls have returned and is set to make further upward movements. Although candlesticks are trading below 12 and 22 EMA, both these two EMA's have not crossed down which means that it was just a mere correction which happened last week.

Personal View:

FCPO: There might be some rebound movements but with FCPO closing below 2500 on Monday, bears will take over and hence it's best to sell on strength and follow the trend. 

FKLI: Look for supports and buy on weaknesses.