Market View - August 12, 2009

Asian markets posted gains yesterday as China’s retail sales expanded and UK housing market showed improvement in July. Nikkei was up 61.2 pts (+0.58%) to 10,585, Hangseng added 144.7 pts (+0.69%) to 21,074 and Shanghai posted a 14.97 pts (+0.46%) gains to 3,264. JCI was up 9.71 pts (+0.41%) to ended at 2,399. DJIA slid 96.5 pts (-1.0%) to 9,241 while Nasdaq slid 22.5 pts (-1.1%) to 1,969 led by financial stocks after JPMorgan downgraded MBIA Inc to underweight and CIT Group delayed its quarterly filing. US productivity rose 6.4% in 2Q, better than the 5.5% market expected. Indicators such stochastic and MACD still show a bullish signals on JCI and its increasing volume confirms the signal. In our opinion JCI will try to break out our second resistance at 2,425 in the next few days, which also a 76.4% fibonacci retracement. Morgan Stanley revised our economic growth in 2009 from 3.7% to 4.4% and 2010 from 5.0% to 5.5%. Our range for JCI today is 2,378 to 2,412 and our picks are Indofood(INDF, Buy, R-2,850, S-2,300), Bank Rakyat Indonesia (BBRI, Buy, R-8,000, S-7,100), Astra Agro Lestari (AALI, Buy, R-27,300, S-18,700), Aneka Tambang (ANTM, Buy, R-2,875, S-2,150) and London Sumatera (LSIP, Buy, R-8,100, S-6,900).