Market Review
Investors remained cautious and profit-taking activities persisted on
fears in the global markets following the spread of the swine flu. Key
heavyweights dragged the market down, pushing the KLCI to close
14.42 points lower to 965.70. The FBM Emas shed 103.80 points to
6,366.79. Meanwhile, the FBM Second Board and MESDAQ indices
lost 61.44 points to 4,248.12 and 98.22 points to 3,372.16
respectively. Trading volume fell to 1.56b shares worth RM1.31b.
Market breadth remained negative as declining stocks outpaced
advancers 558 to 135, while 148 counters remained unchanged.
Regional Markets
Asian markets continued to fall on concerns that the swine flu will
dampen global recovery after WHO raised it to the pandemic alert
level. The KOSPI shed 2.95% or 39.59 points to 1,300.24 as
investors locked in profits, while the Nikkei 225 lost 2.67% or 232.57
points to 8,493.77 on lower retail sales for March. Meanwhile, the
Hang Seng fell 1.92% or 285.31 points to 14,555.11 and the STI
declined 0.56% or 10.20 points to 1,808.41. However, the Jakarta
Composite Index closed 1.26% or 19.83 points higher to 1,595.92 on
buying interest in telcos and banking blue-chip stocks.
US Markets
Overnight US markets retreated on concerns that banks need more
capital and the swine flu outbreak will slow the economic recovery
down. The Dow Jones Industrial Average declined 0.10% or 8.05
points to 8,016.95, the S&P 500 lost 0.27% or 2.35 points to 855.16,
while the Nasdaq Composite Index shed 0.33% or 5.60 points to
1,673.81. Meanwhile, crude oil fell 0.44% or USD0.22 to
USD49.92/bbl on concerns that the swine flu outbreak will erode
demand due to curtailments in the travel industry.
Daily Technical Outlook
The KLCI plunged 14.42-points to close at 965.70 yesterday.
Investors may nibble on dips to the support areas of 948 and 958.
Heavy profit-taking on rallies to the resistance areas of 965 and 982
will cap market gains for now. A Key Bearish Engulfing Candlestick
Pattern high was sighted at 996.80 on this Monday. As a result, the
KLCI could retrace to 958.82 and 946.99 before heading higher in
the longer-term. With another possible day of downward retracement
today, this may be an opportunity to bargain-hunt before the market
starts turning up again very soon. As we arrived at Wave iii/4C at
996.60 on Monday, the present move could be only a Wave iv/4C in
progress. As a result, investors may bargain hunt on weakness for a
medium-term rise to 996.60, 1,008.25 and higher – should the KLCI
remain above the critical support of 936.63 and also the Wave i/4C
peak of 890.57. Otherwise, the Wave 4C rally would be deemed as
over.
KLCI: Key Points
The May KLCIF is at a 1.70-point discount to the KLCI
Take some profits at 965 and 982
Nibble on dips to the supports of 946 and 958
Key Bearish Engulfing High sighted at 996.80 
MARKET ROUNDUP
The KLCI traded much lower on broad-based profit-taking activities and the index settled at 965.07 with a 14.42-point loss. Some stocks that led the decline were GENTING, BURSA, IOICORP and BSTEAD.
Technical Viewpoint: Due to its upward price movement and very high volume trends recently, the KLCI is in its Wave 4C “Flat” corrective rise from the 936.63 high (Wave 4A) and the 836.51 low (Wave 4B) respectively. The Wave iii/4C move stalled at 996.60 high this Monday. A Wave iv/4C correction move is underway for the
next few days. The index may find some buying interest at its support levels of 946 and 958, while the firm resistance areas of 965 and 982 will cap its rise for today.
With the heavy volumes and selling on Monday and yesterday, the market is for a further correction ahead of the Labour Day holiday. Some volatility could be expected for the next 2 days. However, the correction phase could be short and swift as the upward momentum could be lost otherwise. With the Bearish Engulfing Candle pattern that emerged on Monday, the KLCI could retrace to 958.82 and 946.99 before heading higher.
KLCI Futures reading: The May contract moved to a 1.70-point discount to the KLCI. Traders will trade the range for the KLCIF today with a “selling on rallies” bias. Nibble at the support areas of 938.5 and 949.0 and take profit at the 966.0 and 988.5-resistance zone.
Daily Trading Idea
ASTRO – RM2.49 TAKE PROFIT (TECHNICAL)
(Stock Code: 5076) (Bloomberg Code: ASTR MK Equity) 
Astro All Asia Networks PLC (ASTRO) provides Direct-to-Home (DTH) satellite multi-channel subscription television services, radio broadcasting services, the production and distribution of film and television programming, the publication and distribution of magazines, and the provision of interactive and multi-media services.
Board / Sector : Main / Trading/Services
CCI : Positive Par Value : GBP0.10
DMI : Positive Market Cap. : RM4.8b
MACD : Positive 52 Week High : RM3.92
Stochastic : Negative
52 Week Low : RM1.80
Oscillator : Positive
Book Value / Share : RM0.41
RSI : Neutral (63)
Beta vs. KLCI : 1.05
Dividend/share : 9.5sen
Support S1/S2 : RM2.25 & 2.37
Historical LPS : 27.4sen
Resistance R1/R2 : RM2.49 & 2.67
Historical P/E : NM
Trend : Up (Ended)
Historical Ind. P/E : 11.4x
Retracement target T1/T2 : RM2.26 & 2.36
Historical Net Loss : RM529.2m
Stop-loss : NA
Avg. Daily 3mth Vol. : 0.8m shares
Sideward Period : 2 days to 2 weeks
Recommendation
ASTRO reached a Wave 3 high at RM2.67 with grossly overbought signals. Since our buy call (at RM2.23) of 3 April 2009, ASTRO had breached our target of RM2.55 to RM2.67. With the overbought RSI indicator and Stochastic sell signal, we now recommend clients to take profits on ASTRO. It would now head lower on its Wave 4 retracement move towards its RM2.26 and RM2.36-zone.
TAKE PROFIT (TECHNICAL) on rallies for ASTRO with weaker support areas at RM2.25 and RM2.37, with obvious potential to reach its retracement areas of RM2.26 and RM2.37.
Daily Trading Idea
BURSA – RM5.85 TAKE PROFIT (TECHNICAL)
(Stock Code: 1818) (Bloomberg Code: BURSA MK Equity)
Bursa Malaysia Bhd (BURSA) is a fully integrated exchange, offering a wide range of exchange-related services, including trading, clearing, settlement, and depository services. The exchange also offers information services related to the Malaysian securities market.
Board / Sector : Main / Finance
CCI : Positive
Par Value : RM0.50
DMI : Positive
Market Cap. : RM3.1b
MACD : Negative
52 Week High : RM9.05
Stochastic : Negative
52 Week Low : RM4.36
Oscillator : Positive
Book Value / Share : RM1.42
RSI : Neutral (55)
Beta vs. KLCI : 1.52
Dividend/share : RM0.24
Support S1/S2 : RM5.40 & 5.65
Historical EPS : 14.8sen
Resistance R1/R2 : RM5.85 & 6.30
Historical P/E : 39.5x
Trend : Up (Ended)
Historical Ind. P/E : 39.5x
Retracement target T1/T2 : RM5.50 & 5.70
Historical Net Profit : RM77.8m
Stop-loss : NA
Avg. Daily 3mth Vol. : 1.4m shares
Sideward Period : 2 days to 2 weeks
Recommendation
BURSA reached a Wave 3 high at RM6.30 with grossly overbought signals. Since our buy call (at RM5.15) of 2 April 2009, BURSA had breached our resistance of RM5.95 to RM6.30. With the overbought RSI indicator and MACD and Stochastic sell signals, we now recommend clients to take profits on BURSA. It would now head lower on its Wave 4 retracement move towards its RM5.50 and RM5.70-zone.
TAKE PROFIT (TECHNICAL) on rallies for BURSA with weaker support areas at RM5.40 and RM5.65, with obvious potential to reach its retracement areas of RM5.50 and RM5.70.
Daily Trading Idea
GENTING – RM4.34 TAKE PROFIT (TECHNICAL)
(Stock Code: 3182) (Bloomberg Code: GENT MK Equity)
Genting Berhad (GENTING) provides leisure and hospitality, gaming, and entertainment businesses. Genting also operates plantations, develops and manages property, provides tours and travel related services, explores oil and gas, and provides money lending services.
Board / Sector : Main / Trading/Services
CCI : Negative
Par Value : RM0.10
DMI : Positive
Market Cap. : RM16.2b
MACD : Negative
52 Week High : RM6.60
Stochastic : Negative
52 Week Low : RM3.08
Oscillator : Positive
Book Value / Share : RM3.37
RSI : Neutral (54)
Beta vs. KLCI : 1.13
Dividend/share : 7.3sen
Support S1/S2 : RM4.02 & 4.22
Historical EPS : 15.4sen
Resistance R1/R2 : RM4.34 & 4.88
Historical P/E : 28.5x
Trend : Up (Ended)
Historical Ind. P/E : 24.8x
Retracement target T1/T2 : RM4.00 & 4.22
Historical Net Profit : RM569.3m
Stop-loss : NA
Avg. Daily 3mth Vol. : 6.4m shares
Recommendation
Sideward Period : 2 days to 2 weeks
GENTING reached a Wave 3 high at RM4.88 with grossly overbought signals. Since our buy call (at RM3.60) of 24 March 2009, GENTING had breached our resistance of RM3.96 to RM4.88. With the overbought RSI indicator and CCI, MACD and Stochastic sell signals, we now recommend clients to take profits on GENTING. It would now head lower on its Wave 4 retracement move towards its RM4.00 and RM4.22-zone.
TAKE PROFIT (TECHNICAL) on rallies for GENTING with weaker support areas at RM4.02 and RM4.22, with obvious potential to reach its retracement areas of RM4.00 and RM4.22.
From Maybank IB Research
