Going Back Into History

Will history repeat itself?

With greater uncertainty ahead, different analysts offer differing views. Some are bullish, some are bearish. In such situation, we have to analyse historical patterns in order to forecast possible future movements for the stock market. Using FBMKLCI as a case study, the following historical monthly data of FBMKLCI have been extracted:

Forecasting FBMKLCI_Oct 2016 2.png

Based on our high-level desktop analysis, it is observed that:

  • Best performing year of FBMKLCI (since 2004) is 2009 with annual index movement of +31.12% whilst the worst performing year is 2008, with negative movement of -64.82%
  • Worst performing month of FBMKLCI is August, with lowest probability (i.e 33.33%) of a positive month-on-month movement
  • Our year end target forecast for FBMKLCI for year 2016 is 1,707.3 (average) and 1,646.7 (sensitised). In relation to 2017, we expect the FBMKLCI to trade range bound (average: 1,707 – 1,790, sensitised: 1,659 -1,786)
  • Nevertheless, in this analysis, we have not considered potential impacts resulting from specific events such as US Presidential election, US rate hike, Brexit plans, Malaysia GE14 and volatility in crude oil / O&G sector

 

DISCLAIMER: THIS IS A PERSONAL BLOG AND SHALL NOT BE RELIED IN WHATSOEVER MANNER BY ANYONE. ALL ARTICLES CONTAINED IN THIS SITE ARE FOR INFORMATION AND ILLUSTRATIVE PURPOSES ONLY AND DOES NOT PURPORT TO SHOW ACTUAL RESULTS. IT IS NOT, AND SHOULD NOT BE REGARDED AS INVESTMENT ADVICE OR AS A RECOMMENDATION REGARDING ANY PARTICULAR SECURITY OR COURSE OF ACTION. SOURCES USED IN THIS SITE HAVE NOT BEEN INDEPENDENTLY VERIFIED FOR ACCURACY, COMPLETENESS AND TIMELINESS. YOU SHOULD SEEK INDEPENDENT AND PROFESSIONAL INVESTMENT ADVICE IN REGARD TO YOUR INVESTMENT DECISIONS. THE AUTHOR MAY HOLD POSITIONS IN THE SECURITIES OR RELATED INSTRUMENTS MENTIONED ABOVE.

Author: Ken Utau

Data Scientist, Markets Analyst and Food Lover

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