Market View - August 26, 2009

Asian markets retreated yesterday due to a drop in metals and oil prices. Investors also worried about the Chinese stocks rally as the Government said they were not “blindly” optimistic about the economy. Shanghai plummetted 77.62 pts (-2.59%) to 2,915, Hangseng slid 100.7 pts (-0.49%) to 20,435 and Nikkei was down 83.69 pts (-0.79%) to 10,497. JCI closed at 2,380, posted a 4.64 pts (+0.19%) gains. US market rose after a better-than-expected consumer confidence that rose to 54.1 in August, better than the 47.9 reading market expected. Home price index also rose 15.44% in June. DJIA was up 30.01 pts (+0.3%) to 9,539 while Nasdaq added 6.25 pts (+0.3%) to 2,024. The markets also reacted positively to President Obama’s nomination of the Fed Chairman Ben Bernanke for a second term. JCI traded mostly in negative territory yesterday, and finally managed to stay positive near the end of trading day.Technical indicators indicated a rebound on JCI. Stochastic increased and JCI yesterday managed to closed above MA20. MACD histogram though still below zero line but it increased gradually. Our range for JCI today is 2,360 to 2,391. Our picks are Telekomunikasi Indonesia (TLKM, Buy, R-8,800, S-8,100), Indofood (INDF, Buy, R-2,850, S-2,350), Astra International (ASII, Buy, R-32,000, S-28,000), PP London Sumatera (LSIP, Buy, R-9,350, S-7,350), and Indocement Tunggal Prakasa (INTP, Buy, R-11,000, S-9,500).