Formidable Support Cushion at 1,319 Yesterday’s profit-taking correction on blue chips was long overdue after twelve straight trading days of gains, and should persist until the present overbought technical momentum is fully neutralized. Note however a sharper dip will quickly neutralize overbought conditions, hence investors can look forward to re-enter the market on a further sharp fall. Look at 1,319, representing the 50% correction of the 12-day rally from 1,292 low of 22 March to the 7 April peak of 1,347, to provide a formidable immediate support cushion. The next stronger support platform is at 1,309. Immediate resistance is reset to 1,347, with 1,354 and 1,380 acting as stronger upside hurdles.
Buy on Dip Kinsteel; Sell on Rally Jaks Resources
Switch to Sell on Rally banking stocks Public Bank and RHB Capital as increasingly overbought technical momentum calls for a profit-taking correction. Maintain Sell MRCB and UEM Land ahead of likely further weakness in the short-term. Stocks on focus today are Kinsteel and Jaks Resources, with a Buy on Dip call on the former given good potential for further gains ahead, while Sell on Rally the latter towards RM1.00 as the 14-day RSI becomes increasingly overbought.
source: TA securities
