Market Overview
Today’s Range : 1567-1604
JCI yesterday closed in red, down 15.25 points (-0.96%) to 1576.08. That was five days in a row JCI closed down. Regional market also closed weak yesterday because the fear of the swine flu will slow the global economy recovery. CPO stocks mostly down led by UNSP -5.6%, LSIP -5.1% & SGRO -4.7%. Only AALI which showed a little downside which only -0.9%.
The fear of swine flu has finally been capitalized on Wall Street. Last night DJIA closed at 8025 down 51.29 points (-0.64%) while Nasdaq closed at 1679 down 14.88 points (-0,88%). Also the fear that the flu will have the same or worse impact such as SARS and will effect the economic recovery has pushed down commodities and metals prices. Oil, CPO, nicke, tin prices down on average of 1.4% to 2%.
Concerning all that happens last night amid the swine flu and the weak prices of metals & commodities, we expect JCI will be in negative territory today. Our range would be 1567-1604. Our second support would be 1559 & the third support on 1535. Be cautious on commodities & metals stocks but be watching pharmaceutical stocks. For today’s trading we pick AALI, SGRO, ADRO, INDF & KLBF. Some for profit taking & some for new positions.
Today’s Top Picks
INDF – Profit Taking
Target Price :1290 Resistance : 1290
Cut Loss :900 Support : 1160
Yesterday INDF closed down 30 points to 1220. This level is a bit below of our previous target price (1230). We see yesterday trading just a correction, influenced by profit taking in CPO stocks. But we suggest our investors to take profit for CPO related stocks since we are a bit concern about this swine flu will affect commodities price. Still we put a buy recommendation on INDF with 1290 target price.
KLBF – Speculative Buy
Target Price :920 Resistance : 920
Cut Loss :610 Support : 860
Up 70 points to 870 yesterday KLBF has reached our 810 target price. However we still see a short term up trend for KLBF. Hence we up grade our trading target price to 920 and our support to 860. We still see a strong market movement on KLBF. But investors has to be very aware about KLBF price movement. Once it shows a weakness then we urge to take profit before it evaporates.
SGRO – Profit Taking
Target Price : 1830 Resistance : 1830
Cut Loss : 1120 Support : 1560
SGRO, together with other CPO stocks, was down 80 points (-4.7%) yesterday to 1620. This closing price in our opinion is still in our support-resistance range. We have two possibilities why SGRO showed weakness yesterday. First, it was just a profit taking. Second, it shows market opinion of what CPO prices is going to be. The swine flu we think will have an influence on market perception of commodities prices. However, we still put this stock on our top picks.
AALI – Profit Taking
Target Price : 16300 Resistance : 16300
Cut Loss : 11800 Support : 14600
From all the CPO stocks that were down yesterday, only AALI that booked the least price correction. Yesterday, AALI only corrected -0.9% while its peers down 5% on average. Technically, we see a correction. Also we see a strong support on 1630 level. We should expect more correction on CPO stocks in a few coming days, but we still recommend a buy on AALI.
ADRO - Buy
Target Price :1200 Resistance : 1000
Cut Loss :750 Support : 880
ADRO has cross above its 1000 level resistance. One of the main reason is its shareholders plan to sell their stake at ADRO around Rp 1200/share. In the coming days we would still see investors speculate on ADRO. We recommend ADRO for trading and mid-term holding due to this expectation of shareholder selling on premium price.
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