KLCI: Buy On Dip LATEXX and SUPERMAX
Less Adverse Impact, Support at 1,320
The sharp overnight fall on US stock markets, sparked by S&P’s credit ratings downgrade of Greece and Portugal which will deepen the European debt crisis, should spillover to trigger corrections in regional markets and hence locally.
Nevertheless, the adverse impact on our local market should be less given the limited foreign participation, with 1,320, the 50% Fibonacci Retracement (FR) of the 12-day rally from 1,292 low of 22 March to the 7 April peak of 1,347, acting as immediate support. Stronger support platform is at 1,309, followed by the 1,300 psychological level. The immediate resistance stays at 1,344, the previous two week’s high, and then 1,347, the 7 April pivot high.
Buy on Dip Latexx & Supermax
Blue chips are likely to correct lower to the mid or lower Bollinger bands to rebuild support as the market dip in line with external weakness. Meantime, lower liners should also extend correction on slowing buying momentum, with immediate support for Tebrau revised lower to 60sen following recent weakness. Stocks on focus today are rubber glove makers Latexx and Supermax, which should attract more buyers on correction towards immediate supports from RM3.60 and RM6.70 respectively for eventual upside to RM4.00 and RM7.20 ahead.