Market View - August 13, 2009

Asian markets sank as investors worried the recent rally had made stocks expensive, especially after several companies posted a worse than expected results yesterday. Hangseng plunged 638.97 pts (-3.03%) to 20,435 after Great Wall Motor Co., China’s largest maker of pick up trucks, posted a 36% drop in 1H profit. Shanghai slid 83.43 pts (-2.6%) to 3,181 after the commerce ministry said the stimulus package cannot completely offset slumping export demand. Nikkei dropped 150.46 pts (-1.42%) to 10,435 as investors worried a stronger yen would hurt overseas profits for automakers such as Honda Motor Co. JCI declined by 51.92 pts (-2,16%) to 2,347. DJIA surged 120.16 pts (+1.3%) to 9,361 and Nasdaq was up 28.99 pts (+1.5%) to 1,998 after a positive outlook from the Federal Reserve, which said the recession is easing. The Fed also kept their rate at 0.00% to 0.25%. JCI declined to 2,347 yesterday, near to our 1st support at 2,324 based on JCI’S weekly chart. If the pullback continue our 2nd support will be 2,299. Our 1st resistance is at 2,367 and 2nd resistance is at 2,385. One critical point is our 3rd resistance at 2,428 which is very close to a 76.4% fibonacci retracement (2,425). Yesterday the Constitutional Court rejected an appeal by by JK-W and Mega-Pro. Our range for JCI today is 2,316 to 2,389 and our picks are Indofood(INDF, Buy, R-2,850, S-2,300), Tambang Batubara Bukit Asam(PTBA, Sell, R-14,800, S-11,000), Astra International (ASII, Buy, R-36,300, S-30,000), Aneka Tambang (ANTM, Buy, R-2,875, S-2,150) and Timah (TINS, Buy, R-2,450, S-2,075).