BACHELOR IN BUSINESS ADMINISTRATION (Hons)

FINANCE (BA242)

FIN 645 FUTURE AND OPTIONS

INDIVIDUAL ASSIGNMENT 1
FUTURE TRADING PLAN (FTP)

PREPARED BY : NURUL SYAHIRA BINTI RAMLI

STUDENT NUMBER : 2020584377

GROUP : DBMF7A

PREPARED FOR : DR. MD. KHAIRU AMIN BIN ISMAIL

SUBMISSION DATE : 11 NOVEMBER 2021

 TABLE OF CONTENT

NUMBER CONTENT PAGE

1. Acknowledgement 3
2. Introduction 4
 Types of Future Trade
 Trading Plan for Future Traders
 Strategies For the Future Trading
3. Technical Analysis 5-10
i. Technical Indicators
ii. VOLUME (Explain + Chart)
iii. MACD
iv. STOCHASTIC RSI
v. RSI
vi. MOVING AVERAGE
4. Fundamental Analysis 11-12
5. Expert Opinion 13
6. Conclusion 14-23
7. References 24
8. Appendices 25-26

2
ACKNOWLEDGEMENT

Assalamualaikum, With the help of Allah, who is both powerful and kind, I can finish
this report on a future trading simulation. It took a lot of help and guidance from a lot of
people to make this assignment go well and come out the way it did. I want to say thank you
to a lot of people who are helping me with my assignment. From the start of this semester,
we've been told about this project. I want to start by thanking my teacher, Dr. Md. Khairu
Amin bin Ismail. Without a good lecture, I would be lost and would not be able to finish this
assignment on time. University of Technology Mara (UiTM) in Kota Bharuin also let me learn
about the future and other options this semester, and I'd like to thank them for that.

This subject has assisted me in broadening my skills and knowledge, which will be
useful in the future. Which I can put to use by entering the trading market. Second, I'd like to
thank all of my friends who have helped me along the way. If none of you contribute, I may
not be able to finish this assignment on time.

3
INTRODUCTION

A futures contract is an agreement to buy or sell a specific quantity of a specific

asset at an agreed-upon price on a future date. Futures contracts for each commodity or
asset can be traded on an exchange because their terms are standardised. The price is the
only variable. Futures contracts now represent commodities and financial instruments that
you see and hear about in the news on a daily basis, such as oil, corn, gold, popular stock
indices, and foreign currencies. Futures trading takes place on federally regulated
exchanges, which facilitate both the location of buyers and sellers as well as post-trade
clearing. With each trade in futures trading, the buyer and seller create a new contract, and
the number of contracts that can be created is limitless. In contrast, each publicly listed and
traded company has a limited number of shares of stock available for trading.

In this assignment, I will use two types of future traders. The first are FCPO-
Crude Palm Oil Futures. To provide market participants with a global price benchmark for
the Crude Palm Oil market, FCPO uses a Crude Palm Oil Futures Contract denominated in
Malaysian Ringgit "MYR" and traded on the Bursa Malaysia Derivatives "BMD." FCPO is
actively used as a risk management solution by players in the edible oil and fat industries, as
well as by fund managers and financial institutions to manage market price fluctuations.
FCPO offers a structured product for retail investors to gain access to the crude palm oil
market. Buy low and sell high for a bullish outlook on crude palm oil price movement, and
vice versa for a bearish outlook.

FKLI-FTSE Bursa Malaysia KLCI Futures is the second futures trade. FKLI
employs a Ringgit Malaysia 'MYR' denominated FTSE Bursa Malaysia Kuala Lumpur
Composite Index (FBM KLCI) Futures Contract traded on the Bursa Malaysia Derivatives
'BMD' exchange, which provides market participants with exposure to the underlying FBM
KLCI constituents. It is actively used in the trading portfolios of both institutional and retail
investors

4
TECHNICAL ANALYSIS

i) TECHNICAL INDICATORS
Chart analysis is used by traders to gain insight into asset production and
consumption, as well as market psychology. These indicators work in tandem to form
the foundation of value investing. Trading volume, for example, may indicate the
duration of a rate hike. In this case, indicators will be used to generate trading
opportunities. This list will teach me about seven new chart patterns to add to my trading
toolbox. I might not need to use them all. Instead, I might select a few that I believe will
help me make better investment decisions.

Traders frequently use a combination of technical indicators when evaluating

an asset. With a plethora of different metrics to choose from, investors must learn how
to use them and select the ones that work best for them. Traders may incorporate
analytical methods, such as more discretionary types of data analysis, such as
analysing technical indicators, to generate future picks. Technical indicators, due to their
statistical nature, can be integrated into price discovery systems.

5
ii) VOLUME (EXPLAIN + CHART)
Technical analysis is a trading strategy that I use to increase my success.
Volume is the indicator in my trading opinion. Volume is the number of shares of
stock traded on a securities exchange or bourse in a given period of time. Volume is
the most commonly used indicator, and it is typically plotted in coloured columns, with
green representing up volume and red representing down volume. Volume is
important to include in a trading strategy because it confirms trend directions.

6
iii) Moving Average Convergence Divergence (MACD)

Moving average convergence divergence (MACD) is a trend-following

momentum indicator that illustrates the relationship between two stock price moving
averages. By subtracting the 26-period EMA from the 12-period EMA, the MACD is
calculated. The MACD indicator can help investors determine if market movement
is strengthening or weakening in either direction.

This indicator's histogram depicts the difference between the MACD and
signal lines. It is time to buy when the MACD line (blue) crosses and crosses over
the signal line (orange), as shown in circle A below. This indicates that stock prices
are rising. When the MACD line crosses and travels below the signal line, as shown
in circle B, it indicates the presence of bearish momentum.

By applying the MACD Divergence technique, the indicator providing buying

and selling signals can also be used to identify changes in impending trends. When
the high and low movements of the MACD line do not correspond to the high and
low movements of the stock price, this is referred to as MACD divergence. MACD
Divergence is classified into two types: bullish divergence and bearish divergence.

7
iv) Stochastic (RSI)

A Stochastic RSI can be found by analysing a reading above 0.8, which is

considered overbought, and a reading below 0.2, which is considered oversold. On a
scale of 0 to 100, anything above 80 is considered overbought, and anything below 20 is
considered oversold. Aside from that, we use Stochastic RSI, which shows Using RSI
values in the Stochastic formula allows traders to determine whether the current RSI
value is overbought or oversold. As a result, the Stochastic RSI is in a downward trend.
As a result, the market is currently overbought. To summarise, the conditions indicating
a sell signal to the futures contract

8
v) Relative Strength Index (RSI)

The relative strength index is a technical analysis momentum indicator that

measures the magnitude of recent price changes to determine whether a stock is
overbought. The RSI is represented by a line graph that moves between two
extremes and has a range of 0 to 100. An RSI reading of 30 or less indicates that
the market is oversold or undervalued.

9
vi) Moving Average

A moving average is also commonly used by investors in technical analysis to begin

the price analysis process. A moving average is a calculation that is used to interpret
data points by establishing a sequence of averages in different subsets of the entire
data set. It is critical to use the moving average indicator because it helps smooth out
the price details. In their chart, the investor can use a single moving average or a
different time frame. Moving averages are completely illustrative, which means that the
investor can calculate an average over any time period they want. Moving averages, for
example, commonly use time ranges of 13, 20, 50, and 200 days. When the shorter day
range is used to generate the average, the average becomes more sensitive. Based on
their trading objectives, the investor can select a time period of varying length. For short-
term trading, a shorter moving average, such as 13 days, is typically used.

10
FUNDAMENTAL ANALYSIS

Fundamental Analysis 1

Title : Indonesian plantation stocks to be hit by higher production costs in 2022 : UOBKH

Source : The Business Time

Date : Wednesday, 17 November 2021

NEWS CONTENTS

This news mentions that UOB Kay Hian (UOBKH) expects crude palm oil (CPO) to fall as
the Indonesian plantation sector faces higher production costs in 2022.

In a report issued on Wednesday (Nov 17), the brokerage maintained a "underweight" rating
for the sector while raising CPO assumptions to RM3,800 (S$1,235.50) per tonne for 2022
and RM3,000 per tonne for 2023, up from RM2,800 and RM2,600 per tonne previously.

According to UOBKH, production costs for all plantation companies will continue to rise by at
least 20%.

Based on industry forecasts, the brokerage anticipates a further increase in fertiliser costs,
which have risen by at least 50 to 80 percent this year due to supply disruptions, high
demand, and higher input costs.

According to UOBKH analysts, the earnings leverage to high CPO could be offset by weak
production growth and high production costs. According to them, CPO prices could also fall
in the second quarter of 2022 as the sector's inventory is rebuilt and there is more supply of
oilseeds on the global market.

11
Fundamental Analysis 2

Title : First Resources Q3 underlying net profit rises by 44.9% on higher prices and volume

Source : The Business Time

Date : Monday, 15 November 2021

NEWS CONTENTS

This news mentions that FIRST Resources First Resources: EB5 +1.32 percent reported an
underlying net profit of US$52.8 million (S$71.4 million) for the third quarter ended
September 30, up 44.9 percent from US$36.5 million the previous year on Monday (Nov 15).

The palm oil producer said in a business update that the significant improvement in top line
performance was driven by higher average selling prices and higher sales volume.

The group also stated that the improved performance was due to a net inventory drawdown
of 48,000 tonnes in Q3 2021 versus a net build-up of 5,000 tonnes in Q3 2020. Sales
increased by 89.2 percent to US$314.2 million, up from US$166.1 million the previous year.

Crude palm oil (CPO) production fell by 4.1% to 228,460 tonnes in Q3 2020, from 238,226
tonnes in Q3 2020. Palm kernel production fell 3% to 53,096 tonnes, down from 54,760
tonnes the previous year.

Fresh fruit bunches harvested totalled 909,506 tonnes, a 2.1% decrease from 928,900
tonnes in Q3 2020.

First Resources stated that earnings before interest, taxes, depreciation, and amortisation
(EBITDA) and underlying net profit in the first nine months of 2021 continued to reflect the
impact of higher export taxes from Indonesia's progressive export levy structure, which was
implemented in December 2020.

12
EXPERT OPINION

13
CONCLUSION

TRADING CHART
Trading Plan 1
Position: Short
Data Entry: FCPO JAN 2022
Technical:
1. Time Frame: 15
minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD
strategy
Fundamental analysis: I gain of
profit because I draw the
support and resistance line
correctly

Expert opinion: -
Trading Plan 2
Position: Long
Data Entry: FCPO JAN 2022
Technical:
1. Time Frame: 15
minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD
strategy
Fundamental analysis I have
the profit because I discipline in
the time when to buy and sell it

Expert opinion: -
Trading Plan 3
Position: Long
Data Entry: FCPO FEB 2022
Technical:
1. Time Frame: 15
minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD
strategy
Fundamental analysis Gain of
profit in FCPO FEB 2022
because draw the support and
resistance line correctly

Expert opinion: -

14
 TRADING CHART
Trading Plan 4
Position: Long
Data Entry: FCPO DEC 2022
Technical:
1. Time Frame: 15
minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD
strategy
Fundamental analysis: I gain of
profit because I draw the
support and resistance line
correctly

Expert opinion: -
Trading Plan 5
Position: Long
Data Entry: FCPO JAN 2022
Technical:
1. Time Frame: 15
minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD
strategy
Fundamental analysis I have
the profit because I discipline in
the time when to buy and sell it

Expert opinion: -
Trading Plan 6
Position: Long
Data Entry: FCPO FEB 2022
Technical:
1. Time Frame: 15
minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD
strategy
Fundamental analysis Gain of
profit in FCPO FEB 2022
because draw the support and
resistance line correctly

Expert opinion: -

15
 TRADING CHART
Trading Plan 7
Position: Short
Data Entry: FKLI DEC 2021
Technical:
1. Time Frame: 15 minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD strategy
Fundamental analysis: I gain of
profit because I draw the
support and resistance line
correctly

Expert opinion: -
Trading Plan 8
Position: Short
Data Entry: FKLI JAN 2022
Technical:
1. Time Frame: 15
minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD
strategy
Fundamental analysis I have
the profit because I discipline in
the time when to buy and sell it

Expert opinion: -
Trading Plan 9
Position: Long
Data Entry: FCPO DEC 2021
Technical:
1. Time Frame: 15
minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD
strategy
Fundamental analysis Gain of
profit in FCPO DEC 2021
because draw the support and
resistance line correctly

Expert opinion: -

16
 TRADING CHART
Trading Plan 10
Position: Long
Data Entry: FCPO JAN 2022
Technical:
1. Time Frame: 15 minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD strategy
Fundamental analysis: I gain of
profit because I draw the
support and resistance line
correctly

Expert opinion: -
Trading Plan 11
Position: Long
Data Entry: FCPO FEB 2022
Technical:
1. Time Frame: 15
minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD
strategy
Fundamental analysis I have
the profit because I discipline in
the time when to buy and sell it

Expert opinion: -
Trading Plan 12
Position: Long
Data Entry: FCPO FEB 2022
Technical:
1. Time Frame: 15
minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD
strategy
Fundamental analysis Gain of
profit in FCPO FEB 2022
because draw the support and
resistance line correctly

Expert opinion: -

17
 TRADING CHART
Trading Plan 13
Position: Long
Data Entry: FCPO MAR 2022
Technical:
1. Time Frame: 15 minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD strategy
Fundamental analysis: I gain of
profit because I draw the
support and resistance line
correctly

Expert opinion: -
Trading Plan 14
Position: Long
Data Entry: FCPO APR 2022
Technical:
1. Time Frame: 15
minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD
strategy
Fundamental analysis I have
the profit because I discipline in
the time when to buy and sell it

Expert opinion: -
Trading Plan 15
Position: Long
Data Entry: FKLI MAR 2022
Technical:
1. Time Frame: 15
minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD
strategy
Fundamental analysis Gain of
profit in FKLI MAR 2022
because draw the support and
resistance line correctly

Expert opinion: -

18
 TRADING CHART
Trading Plan 16
Position: Long
Data Entry: FCPO JAN 2022
Technical:
1. Time Frame: 15 minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD strategy
Fundamental analysis: I gain of
profit because I draw the
support and resistance line
correctly

Expert opinion: -
Trading Plan 17
Position: Long
Data Entry: FCPO FEB 2022
Technical:
1. Time Frame: 15
minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD
strategy
Fundamental analysis I have
the profit because I discipline in
the time when to buy and sell it

Expert opinion: -
Trading Plan 18
Position: Long
Data Entry: FCPO MAR 2022
Technical:
1. Time Frame: 15
minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD
strategy
Fundamental analysis Gain of
profit in FCPO MAR 2022
because draw the support and
resistance line correctly

Expert opinion: -

19
 TRADING CHART
Trading Plan 19
Position: Long
Data Entry: FCPO JAN 2022
Technical:
1. Time Frame: 15 minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD strategy
Fundamental analysis: I gain of
profit because I draw the
support and resistance line
correctly

Expert opinion: -
Trading Plan 20
Position: Long
Data Entry: FCPO DEC 2021
Technical:
1. Time Frame: 15
minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD
strategy
Fundamental analysis I have
the profit because I discipline in
the time when to buy and sell it

Expert opinion: -
Trading Plan 21
Position: Long
Data Entry: FCPO JAN 2022
Technical:
1. Time Frame: 15
minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD
strategy
Fundamental analysis Gain of
profit in FCPO JAN 2022
because draw the support and
resistance line correctly

Expert opinion: -

20
 TRADING CHART
Trading Plan 22
Position: Long
Data Entry: FCPO JAN 2022
Technical:
1. Time Frame: 15 minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD strategy
Fundamental analysis: I gain of
profit because I draw the
support and resistance line
correctly

Expert opinion: -
Trading Plan 23
Position: Long
Data Entry: FCPO FEB 2022
Technical:
1. Time Frame: 15
minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD
strategy
Fundamental analysis I have
the profit because I discipline in
the time when to buy and sell it

Expert opinion: -
Trading Plan 24
Position: Long
Data Entry: FCPO FEB 2022
Technical:
1. Time Frame: 15
minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD
strategy
Fundamental analysis Gain of
profit in FCPO FEB 2022
because draw the support and
resistance line correctly

Expert opinion: -

21
 TRADING CHART
Trading Plan 25
Position: Short
Data Entry: FCPO JAN 2022
Technical:
1. Time Frame: 15 minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD strategy
Fundamental analysis: I gain of
profit because I draw the
support and resistance line
correctly

Expert opinion: -
Trading Plan 26
Position: Short
Data Entry: FCPO FEB 2022
Technical:
4. Time Frame: 15
minutes
5. Major Treat: bullish
6. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD
strategy
Fundamental analysis I have
the profit because I discipline in
the time when to buy and sell it

Expert opinion: -
Trading Plan 27
Position: Short
Data Entry: FCPO MAR 2022
Technical:
1. Time Frame: 15
minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD
strategy
Fundamental analysis Gain of
profit in FCPO MAR 2022
because draw the support and
resistance line correctly

Expert opinion: -

22
 TRADING CHART
Trading Plan 28
Position: Short
Data Entry: FCPO APR 2022
Technical:
1. Time Frame: 15 minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD strategy
Fundamental analysis: I gain of
profit because I draw the
support and resistance line
correctly

Expert opinion: -
Trading Plan 29
Position: Short
Data Entry: FKLI DEC 2021
Technical:
1. Time Frame: 15
minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD
strategy
Fundamental analysis I have
the profit because I discipline in
the time when to buy and sell it

Expert opinion: -
Trading Plan 30
Position: Short
Data Entry: FKLI DEC 2021
Technical:
1. Time Frame: 15
minutes
2. Major Treat: bullish
3. Indicator: Volume,
Stochastic RSI, Moving
Average, MACD
strategy
Fundamental analysis Gain of
profit in FKLI DEC 2021
because draw the support and
resistance line correctly

Expert opinion: -

23
REFERENCES

1. https://www.businesstimes.com.sg/companies-markets/indonesian-plantation-stocks-
to-be-hit-by-higher-production-costs-in-2022-uobkh
2. https://www.businesstimes.com.sg/companies-markets/first-resources-q3-underlying-
net-profit-rises-by-449-on-higher-prices-and-volume
3. https://www.bursamarketplace.com/mkt/mygames/game/10708
4. https://www.tradingview.com/chart/df9QmEqJ/

24
APPENDICES

25
26