Foreign Investors See Malaysian Ringgit (MYR) Potential

Foreign Investors See Malaysian Ringgit (MYR) Potential

Things are looking up for Malaysia, with more foreign investors cashing in on the country’s improving economy and strengthening currency, market participants told CNBC on Tuesday.

  • Funds are flowing into Malaysia as the economy and local currency, the ringgit, strengthen, market participants said
  • Upcoming elections present risks, but investors should see volatility as an opportunity to cash in on a Southeast Asian growth story, they said
  • 10 billion ringgit ($2.3 billion) flowed into the country’s equities market in the first six months this year

The Malaysian ringgit has been one of the best-performing currencies in the region this year, while domestic stocks have gained around 8 percent. In fact, the country’s brightening prospects received a nod from the International Monetary Fund, which on Monday upgraded its growth forecast to 4.8 percent from 4.5 percent.

Technical Analysis

Overall, the bias in prices is: Sideways.

Short term: Prices are stalling.

Intermediate term: Prices are ranging.

The projected upper bound is: 4.30.

The projected lower bound is: 4.26.

The projected closing price is: 4.28.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 4 black candles for a net of 1 white candles. During the past 50 bars, there have been 24 white candles and 20 black candles for a net of 4 white candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 23.5299. This is not an overbought or oversold reading. The last signal was a sell 19 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 41.79. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 28 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -116.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 3 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 6 period(s) ago.

Rex Takasugi – TD Profile

FOREX MYR= closed up 0.004 at 4.280. Volume was 33% below average (neutral) and Bollinger Bands were 64% narrower than normal.

Open   High    Low     Close   Volume
4.277   4.282   4.276   4.280  26

Technical Outlook
Short Term:               Neutral
Intermediate Term: Bullish
Long Term:                Bearish

Moving Averages: 10-period    50-period    200-period
Close:                        4.29             4.28             4.37
Volatility:                 2                   3                   4
Volume:                   39                 39                 38

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

FOREX MYR= is currently 2.1% below its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect moderate flows of volume out of MYR= (mildly bearish). Our trend forecasting oscillators are currently bullish on MYR= and have had this outlook for the last 24 periods.

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Ivy Heffernan

Ivy Heffernan, student of Economics at Buckingham University. Junior Analyst at HeffX and experienced marketing director.

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