Failure of the index to overcome the immediate resistance level of 1,325, combined with an overbought daily stochastics reading, suggests profit-taking correction is likely to follow. Immediate support on this correction is at 1,313, Monday’s low, with 1,308 and 1,300 as stronger supports. Hence, blue chips are likely to fall into profit-taking consolidation, while most lower liners are also expected to ease back into hibernation. However, trading momentum could shift today to construction and property related stocks to highlight rotational interest.
Revise to SELL AMMB, Sime Darby, Tenaga & TM
Revise call to SELL AMMB, Sime Darby, Tenaga and TM ahead of likely profit- taking correction from their upper Bollinger bands. On the other hand, the breakout from consolidation on share prices of Gamuda and MRCB yesterday indicate good further upside potential in the medium-term. For Gamuda, a sustained breakout above the 200-day moving average (RM2.95) will improve upside bias toward RM3.10, while MRCB has a solid support floor at RM1.50 reinforced by EPF’s general offer, with immediate upside to RM1.70 set to be repeated.
source: TA securities
