Market View - August 19, 2009

Most Asian markets rebound yesterday as European markets were opened in a positive tone. Investors bet that German’s investor confidence, US’s building permits and housing starts will rise. Nikkei was up 16.35 pts (+0.16%) to 10,284 and Hangseng added 168.62 pts (+0.84%) to 20,306. JCI fell 49.88 pts (-2.09%) to 2,336. US market also rebound after Monday’s selloff. DJIA added 82.60 pts (+0.9%) to 9,217 and Nasdaq rose 25.08 pts (+1.3%) to 1,955 as better-than-expected earnings from Home Depot and Target Corp. However, data from building permits and housing starts were below market expectation. Building permits fell to 560,000 in July from 570,000 the month before and housing starts fell to 581,000 from 587,000. Rebound in global markets in our opinion will become a positive catalyst for JCI today. However, we still think market will be very volatile this week and is opened to correction. Technical indicators such as stochastic and MACD start indicating a pullback. Our strong support for JCI is at 2,170 which is also a 61.8% fibonacci retracement. Our range for JCI today is 2,293 to 2,381. Our picks are Tambang Batubara Bukit Asam (PTBA, Buy, R-14,800, S-11,000), Int’l Nickel Indonesia(INCO, Buy, R-5,350, S-4,050), Astra International (ASII, Sell, R-30,000, S-27,200), Aneka Tambang (ANTM, Buy, R-2,875, S-2,150) and Ciputra Development (CTRA, Buy, R-850, S-740).