Apr 24, 2009

KLSE Market Research Daily 24 April 2009

Market Review
The local bourse rallied on positive sentiment after the government
announced the liberalisation of 27 service sub-sectors. The KLCI
surged 10.06 points to 978.64 on follow-through buying in selected
heavyweights as investors accumulated under-valued stocks. The
FBM Emas rose 79.87 points to 6,463.28. Meanwhile, the FBM
Second Board and MESDAQ indices gained 69.59 points to 4,139.24
and 118.86 points to 3,549.20 respectively. Trading volume
increased to 1.37b shares worth RM1.28b. Market breadth improved
significantly as advancers outlasted 554 to 128, while 170 counters
remained unchanged.

Regional Markets  
The regional markets closed higher on better sentiment as positive
news flow prompted investors to bargain hunt. The Hang Seng
surged 2.26% or 336.01 points to 15,214.46 led by banking stocks
on news that BOC HK may be able to settle trades in Yuan and on
optimism that China bank’s profits will rise and the Nikkei 225 added
1.37% or 119.71 points to 8,847.01 after Goldman Sachs upgraded
its call on Toyota to a buy. The KOSPI gained 0.94% or 12.78 points
1,368.80 on optimism of a better first quarter corporate earnings and
the STI climbed 0.90% or 16.57 points to 1,859.98. Elsewhere, the
Jakarta Composite Index ended 1.39% lower or 22.53 points to
1,592.70 as the political situation heated up ahead of the presidential election.

US Markets
Overnight US markets closed on gains after a rather volatile trading
session as optimism from better 1Q results lifted the Dow. Investors
remain jittery over the results season and the general uncertainty
over the US auto sector. The Dow Jones Industrial Average added
0.89% or 70.49-points to 7,957.06, the S&P 500 rose 0.99% or 8.37
points to 851.92, while the Nasdaq Composite Index rose 0.37% or
6.09-points to 1,652.21. Meanwhile, crude oil rose 2.89% or
USD1.37 to USD48.82/bbl.

Daily Technical Outlook
The KLCI climbed 10.06-points at 978.64 yesterday. Investors will
buy on dips to the support areas of 958 and 978 as the KLCI is
poised to attack the intermediate target of 993.73 on route to
1,008.25 (2.62 extension ratio of this rise) as its next stop. Buy on
dips while being sensitive to any downturn in the KLCI, using 956 as
its key short-term stop-loss point. The resistance areas of 986 and
1,008 may cap market gains for now. The small overnight gains in
the Dow last night will see the KLCI surging towards the 1,000-mark
for today. Among the technical buy stocks that we like are:
AIRPORT, ASTRO, AXIATA, BURSA, DRBHCOM, GENTING,
HARTA, HUAAN, IJMLAND, ORIENT, PROTON, SUNCITY,
TENAGA, UCHITEC
and ZHULIAN.

KLCI Line Chart KLCI: Key Points:
KLCIF is at a 7.86-point premium to the KLCI
   Take some profits at 986 and 1,008
   Buy on dips to the supports of 958 and 978
   Trend appears quite strong for the KLCI

KLCI Daily Chart
Technicals
klci

 MARKET ROUNDUP
The KLCI traded much higher on broad-based buying activities and the index settled at 978.64 with a good

10.06-point rise. Some stocks that led the surge were AIRPORT, IJMLAND, ORIENT, PROTON, SUNCITY,TENAGA and UCHITEC.

Technical Viewpoint:
Due to its superb and positive price 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. It has good potential to reach its intermediate target areas of 993.73 and 1,008.25. The index will
find some buying interest at its support levels of 958 and 978, while the resistance areas of 986 and 1,008 may cap its rise for today. 
With the obvious rotational buying activities locally and the Dow’s minor overnight rise of 70.49-points, we believe that the upward bias momentum will be well sustained. There will be a strong rise towards its resistance and upward target areas. Volume and churning activities have risen recently. Therefore, a cautious approach to chasing highly priced stocks is well advised. Instead, customers should focus on laggard counters that are about to move and offer more reward relative to risk.

KLCI Futures reading: The April contract moved to a 7.86-point premium to the KLCI. Traders will trade the range for the KLCIF today with a firm upward bias. Buy at the support areas of 952.0 and 986.5 and take profit at the 996.8 and 1,009.0-resistance zone. 

Daily Trading Idea
Technicals 

MUHIBAH – RM1.28  ACCUMULATE  (TECHNICAL)
(Stock Code: 5703)  (Bloomberg Code: MUHI MK Equity) muhibah

Muhibbah Engineering (M) Bhd (MUHIBAH) is an investment holding company which provides civil, marine, and structural engineering contract works.  It also manufactures engineering products and distributes and markets construction materials.

MUHIBAH made a Wave 5 low of RM0.645 in Mar ’09, with grossly oversold and bullish divergent signals. The stock is in a very firm Wave 3 uptrend, confirmed by the positive crossover from the CCI, DMI, MACD,Stochastic and Oscillator indicators. We feel that MUHIBAH will rise and test the stipulated resistance and
target levels. 

ACCUMULATE (TECHNICAL) on dips for MUHIBAH with good support areas at RM1.07 and RM1.28, with fine potential to reach its stipulated resistance and target areas of RM1.60 and RM1.93. Stop-loss is at RM1.05.

Daily Trading Idea
  Technicals 

UNISEM – RM0.755  ACCUMULATE (TECHNICAL)
(Stock Code: 5005)  (Bloomberg Code: UNI MK Equity)

unisemUnisem (M) Berhad (UNISEM) manufactures semiconductor devices.  It also provides turnkey solutions to its customers in wafer grinding, packaging and testing of integrated circuits, tape and reel, and drop ship services. It also provides packaging and testing for a wide range of lead frame packages.

UNISEM made a Wave 5 low of RM0.45 in Mar ’09, with grossly oversold and overbought signals. Indicators (like CCI, DMI, MACD and Oscillator) confirm the very strong Wave 3 uptrend is positive. As such, UNISEM will rise further and test the stipulated resistance and target levels. 

ACCUMULATE (TECHNICAL) for UNISEM, with strong support areas seen at RM0.67 and RM0.755, with great potential to reach its stipulated resistance and target areas of RM0.89 and RM1.00. Stop-loss is at RM0.65.

Technicals

UCHITEC – RM1.25  SHORT-TERM BUY (TECHNICAL)
(Stock Code: 7100)  (Bloomberg Code: UCHI MK Equity) uchitec

Uchi Technologies Berhad (UCHITEC) designs, researches, develops, and manufactures miniature data terminals, fuzzy logic controllers, and control modules.  It also assembles electrical components onto printed circuit boards and trades complete electric module and saturated paper of PCB lamination.  

UCHITEC made a Wave 2 low of RM0.86 in Mar ’09, with grossly oversold signals. Indicators that confirm the firm uptrend are the positive CCI, DMI and Oscillator signals. As such, UCHITEC will rise further and test the stipulated resistance and target levels. 

SHORT-TERM BUY (TECHNICAL) for UCHITEC
, with strong support areas seen at RM1.10 and RM1.25,with great potential to reach its target areas of RM1.34 and RM1.58. Stop-loss is at RM1.08. 

Daily Trading Idea
  Technicals
 

DRBHCOM – RM1.05  ACCUMULATE  (TECHNICAL)
(Stock Code: 1619)  (Bloomberg Code: DRB MK Equity)drhbicom

DRB-Hicom Berhad (DRBHCOM) is an investment holding company. It develops, assembles, and sells otor vehicles and military vehicles as well as operates in property development and construction work. 

DRBHCOM made a Wave 5 low of RM0.65 in Mar ’09, with grossly oversold signals. Indicators that confirm the very strong Wave 3 uptrend are the positive CCI, DMI, MACD, Stochastic and Oscillator signals. As such, DRBHCOM will rise further and test the stipulated resistance and target levels. 

ACCUMULATE (TECHNICAL) for DRBHCOM
, with strong support areas seen at RM0.90 and RM1.05, with great potential to reach its stipulated resistance and target areas of RM1.19 and RM1.34. Stop-loss is at RM0.88.

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