Buy AZRB & Muhibbah

Softer in Response to US Fed Timeline

Stocks remained in base building mode on Wednesday,with most investors sidelined amid the mixed regional tone ahead of the conclusion of  a two-day US Federal Reserve policy meeting. The KLCI was stuck in range bound trade before ending 1.17 points lower at 1,772.88, off an early high of 1,782.39 and low of  1,772.07, as losers edged gainers 417 to 352 on slow trade totaling 1.42bn shares worth RM1.81bn.

Resistance Still at 1,793, Support at 1,748
The local market could soften today in anticipationof regional weakness in an immediate reaction to the US Federal Reserve’s defined timeline to end its bond-buying program by mid-2014. Resistance capping immediate upside for the index stays at 1,793, the upper Bollinger band matching last week’s high, with subsequent hurdles at 1,800 and 1,826, the 6/5/13 peak. Key up-trend support would be from the50-day moving average now at 1,748, to prevent closure of the large gap-up with next meaningful support only coming in at 1,718, the high of April.

BUY AZRB & Muhibbah
Hook-up momentum indicators imply good rebound potential for AZRB towards 90sen (50%FR), with breakout to target 96sen (61.8%FR) and RM1.03 (76.4%FR) ahead. Uptrend support is at the 50-day moving average (81sen), with stronger support at 77sen (23.6%FR). The bullish breakout on Muhibbah yesterday could fuel further upside towards RM1.74 (138.2%FP), RM1.82 (150%FP) and RM1.90 (161.8%FP) going forward, while immediate support is at the breakout level of RM1.48, matching the 21/5/13 peak, and stronger support at RM1.32 (76.4%FR).

 

by TA Securities

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