Sell in May and Go Away?

Sell in May and go away... Seems like it is a mixed myth and fact throughout all these years. Will this myth continue to happen in this year? First, let's look at the FBMKLCI monthly chart and try to correlate...

FBMKLCI Monthly Chart

From the past year statistics, 2013's May shows a bullish month. 2014's May show a doji with thin body and long tails. For 2015's May, it is a big bearish engulfing which in the following months drag down the FBMKLCI to the lowest of 1503.68 in August 2015. In my previous post[3], i still remember for the month of March, there is a bullish engulfing, and this month April it forms a bearish engulfing. The market is totally unpredictable. 

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FBMKLCI - Malaysia BULLeh

Let's kick start the April post with participation statistics for our FBMKLCI. Let's focus at the foreign funds.

Bursa Malaysia Trading Participant Statistic for the Past 8 Weeks [1]

For the month of February and March, foreign funds had been in net buy position, RM433.2 Mil and RM6,081 Mil for respectively. for the past 2 months, the foreign funds had been actively trading in our FBMKLCI. We can also track the daily participation statistics through this link. If the foreign funds are coming in, meaning to say our MYR will be stronger and stronger.

The reason being, if the foreign funds want to invest in Malaysia, first, they will take their currency and exchange it to MYR in order to invest in Malaysia. So when the MYR's demand is getting higher and the supply is still the same, that's when we see the MYR getting stronger. With the weekly chart, there is a huge bearish engulfing. So i expect the MYR to get further stronger and might breach 3.80.

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