Japan’s currency may face continued downward pressure if policymakers move too slowly on interest rate hikes, according to the head of the Asian Development Bank . Rate Gap with US Driving Yen Weakness ADB President Masato Kanda highlighted that the wide interest rate differential between Japan and the US remains the key driver behind yen weakness. Investors continue to favour the US dollar due to higher yields The Bank of Japan risks being seen as “behind the curve” on inflation As a result, the yen struggles to strengthen even when global risk sentiment improves . BOJ’s Slow Response Raises Market Concerns Despite inflation hovering around target levels for years, the BOJ has maintained a cautious policy stance to avoid damaging Japan’s fragile economic recovery. However, markets may react negatively if: The BOJ delays rate hikes further Investors lose confidence in Japan’s poli...
LCTH Corporation Berhad (LCTH) Close Position
Recall that we previously issued a buy call on LCTH (3-March 2016), after observing the share price staging a technical breakout to confirm a bullish ‘inverted head and shoulder’ chart pattern. However, the share price has failed to rally further but instead underwent a profit-taking phase. Both RSI and Stochastic have also rolled over, with the latter reversing strongly from its overbought zone to imply the heavy selling pressure. With the unappealing technical picture, we decided to close position on the stock for now but will re-look into it once its technical outlook turns compelling again.
MMC Corporation Berhad (MMCCORP) Not Rated
Yesterday, MMCCORP rose 6.0 sen (3.5%) to RM1.76 on trading volume, which hit a six-month high. Previously in Nov-2015, MMCCORP commenced a downtrend which saw its share price retreating by as much as 30% from a high of RM2.31 to last week’s low of RM1.61. Nevertheless, the MACD has ceased to make new lows over the past few months, and this reflects that selling pressure has depleted over this period. Furthermore, yesterday’s bullish move has caused the share price to break above its downwardsloping trend line to paint a more positive technical outlook. Should MMCCORP break above the RM1.78 (R1) (23.6% Fibonacci Resistance/ 50-day SMA) resistance, the next resistance level to look forward to is RM1.89 (R2). Immediate supports are located at RM1.69 (S1) and RM1.61 (S2).
Recall that we previously issued a buy call on LCTH (3-March 2016), after observing the share price staging a technical breakout to confirm a bullish ‘inverted head and shoulder’ chart pattern. However, the share price has failed to rally further but instead underwent a profit-taking phase. Both RSI and Stochastic have also rolled over, with the latter reversing strongly from its overbought zone to imply the heavy selling pressure. With the unappealing technical picture, we decided to close position on the stock for now but will re-look into it once its technical outlook turns compelling again.
MMC Corporation Berhad (MMCCORP) Not Rated
Yesterday, MMCCORP rose 6.0 sen (3.5%) to RM1.76 on trading volume, which hit a six-month high. Previously in Nov-2015, MMCCORP commenced a downtrend which saw its share price retreating by as much as 30% from a high of RM2.31 to last week’s low of RM1.61. Nevertheless, the MACD has ceased to make new lows over the past few months, and this reflects that selling pressure has depleted over this period. Furthermore, yesterday’s bullish move has caused the share price to break above its downwardsloping trend line to paint a more positive technical outlook. Should MMCCORP break above the RM1.78 (R1) (23.6% Fibonacci Resistance/ 50-day SMA) resistance, the next resistance level to look forward to is RM1.89 (R2). Immediate supports are located at RM1.69 (S1) and RM1.61 (S2).
Source: Kenanga Research, 08 March 2016
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