KLCI: Buy on DIP MRCB, UEMLAND, Sell On Rally AXIATA , MAYBANK

Limited Downside With Support at 1,329/1,320
Increased downside volatility on global markets, triggered by contagion fears from the European sovereign debt crisis, should spread to the region and hence dampen sentiment
on the local market.  Nonetheless, the downside risk should be muted given the low foreign participation, with immediate cushion seen at 1,329 and 1,320, the 50%FR of the 12-day rally from 1,292 low of 22 March to the 7 April peak of 1,347.  Stronger support is expected at the 1,300 psychological level. Immediate resistance is at yesterday’s high of 1,349, with stronger hurdles at 1,354, 1,360 and then 1,380.

Buy on Dip MRCB & UEM Land
Due to negative external leads, blue chips should extend consolidation with a downward bias as buying momentum dwindle. Continue to Sell on Rally Axiata and Maybank as share price should fall back below the upper Bollinger band, and RHB Capital given the overbought RSI reading. Lower liners on focus today are construction related stocks MRCB and UEM Land with call to Buy on Dip, with the share price hovering below their lower Bollinger bands likely to attract more significant bargain hunting interest for technical rebound gains.

 

by TA securities