KLCI : Buy on DIP Genting Bhd n Genting Malaysia

China Tightening and EU Debt Concerns to Dampen Sentiment 


The local stock market extended gains Tuesday following the USD1tn EU rescue loan package to contain the Euro-zone debt crisis, ignoring regional losses sparked by concern rising inflation and housing prices will force China to tighten credit further.  The FBM KLCI rose 6.75 points to close at 1,340.72, off an opening low of 1,332.38 and high of 1,341.88 on negative breadth as losers beat gainers 399 to 302 on slower trade totaling 781.7mn shares worth RM1.34bn.

Immediate Resistance at 1,341, Higher at 1,349/1,354
Increased volatility on global markets, amid uncertainties over the effectiveness of the EU rescue package in solving the Euro debt crisis, should dampen sentiment for the immediate term.  Immediate resistance for the index stays at 1,341, with more formidable hurdles at 1,349 and 1,354.  The immediate support is retained at 1,320, representing the 23.6%FR and 50%FR of the rise from 1,224  low of 9 February and 1,292 low of 22 March to the 26-month high of 1,349.9 last week.  The lower support zone at 1,309 to 1,300 will act as stronger downside buffer.

Buy on Dip Genting Bhd & Genting Malaysia
Most blue chips and lower liners are expected to extend low-volume consolidation given the increased uncertainty and volatility on global stock markets.  As such, stocks on focus today are defensive gaming stocks Genting Bhd and Genting Malaysia which investors tend to flock to in times of increased uncertainties, with share price likely to strengthen toward RM7.10 and RM3.00 respectively before meeting profit-taking resistance.

by TA Securities

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