KLCI - Sell AFG On Rally, Buy CIMB On Dip

 

KLCI Building Support Above 1,334
A re-test of the recent high of 1,347 and then a challenge of 1,354 is still plausible as the index continues to consolidate and build support above 1,334, which coincide with the 23.6%FR of the 12-day rally from 1,292 low of 22 March to the 7 April peak of 1,347.  A confirmed breakout above 1,347 will accelerate upside towards 1,354, where a decisive breach above this level will bring it up to the next resistance level at 1,380.  Stronger supports are available at 1,331, last Thursday’s correction low, and then 1,319, which represent the 50% correction of the 1,292 low to 1,347 high.

Sell on Rally AFG, Buy on Dip CIMB
Reiterate Sell on Rally AFG and switch to Buy on Dip CIMB given the high overbought reading on the former with its 14-day RSI already above 80, while the latter has gone through a decent profit-taking correction and hence is ripe to bargain close to RM14.00 or lower.  Meantime,  lower liners such as RCE Capital, 3A Resources and Land & General are worthwhile buys on any further dips to their respective immediate supports.

Source: TA securities