MARKET OVERVIEW
Today’s Range : 1784-1829
After five days in a row posting gains, yesterday finally JCI closed in negative territory at 1772, down 16.07 points (-0.90%). Profit takings in blue chips such as ISAT, BBRI, TLKM & PTBA dragged index down. Even BUMI cannot hold its yesterday’s highest at 1770, in which at the closing time BUMI closed at 1680. In banking stocks, markets took profit after Bank Indonesia announced its BI Rate cut to 7.25%. This is a sell on news act. The Jakarta Finance Index fell 2.8% yesterday and was the worst sector performance at JCI. Palm oil July futures in Malaysia Derivatives Exchange down 2% to 2647 ringgit in the concern of over supply stockpiles. CPO related stocks such as SGRO, AALI, LSIP suffered because of this news.
US market ended lower last night as investors booked their paper profits. DJIA lost 16.09 points to end at 8410 while Nasdaq lost 9.44 points to 1754. The Fed Reserve Chairman Ben Bernanke stated that the economy will bottom & start to rebound later this year but the recovery process will be slow & choppy. Meanwhile, it is reported that 10 of the 19 banks may require additional cpaital. Speculations amongst the 10 are Bank of America, Citigroup & Wells Fargo.
Today we forecast the urge of profit taking is still in the air. Our JCI range would be 1784- 1829. Be vary concern of 1785 level because we think this is a turning point level. If the index moves below this level, we should expect the correction continue to 1657. We recommend our investors to take profit and be more concervative. We see a fatigue in the market. However, for mid to long-term horizon we still recommend BUMI, PGAS, PTBA, AALI & ADRO
TODAY'S TOP PICKS
BUMI – Hold
Target Price :2175
Resistance : 2175
Cut Loss :1300
Support : 1200
Even BUMI cannot hold its highest price level yesterday. After reaching 1770 level, BUMI finally closed at 1680. Profit taking was the cause of this. Investors feel like to cash out their paper profit on BUMI. We think in the short run there would be another profit taking. From stochastic point of view, we should expect a momentary down trend. We recommend to hold on BUMI, collect again once its Stochastic shows oversold.
PTBA – Hold
Target Price :10500
Resistance : 10500
Cut Loss :7800
Support : 9000
Even a strong blue chip cannot hold on once a profit taking happen. From technical view, we see a momentary down side movement due to overbought. But for mid term horizon we still recommend PTBA. Same as BUMI, wait for a while until its Stochastic shows oversold signal. We still positive about our trading target price at 10500 for PTBA.
PGAS – Buy
Target Price : 2950
Resistance : 2600
Cut Loss : 2050
Support : 2500
PGAS closed exactly at our 2600 resistance level, after touched its highest at 2650. Seeing its volume spike, we still confidence PGAS will continue its rally today; unless some strong profit taking evaporates its strong momentum. We recommend a buy for PGAS with caution today. Be careful for profit taking.
AALI – Hold
Target Price : 18300
Resistance : 18300
Cut Loss : 14500
Support : 16000
Profit taking, overbought & correction on palm futures caused AALI fell 100 point to 18000 yesterday. News that July palm oil futures at Malaysia Derivatives Exchange down 2% became the catatlist for AALI (and its peers) yesterday. For the meantime, we downgrade our daily recommendation on AALI from Buy to Hold. However, we still positive of our 18300 trading target price.
ADRO – Buy
Target Price :1300
Resistance : 1300
Cut Loss : 910
Support : 1000
Markets still waiting for the confirmation on who’s going to buy ADRO stakes still be the main catalist for this stock. Though we’re not being conformed yet, but it’s been said in the street that the aquisition price should be aroung 1100-1200. However, we’re still very positive on ADRO. Therefore our recommendation still a Buy with 1300 price target for short term trading.
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