We upgraded our fundamental call on Malaysia from neutral to OVERWEIGHT yesterday. Technicals also point to a major rebound ahead. We believe the major wave "B" bear market rally started in early Mar and could take 5-8 months to complete. Assuming the KLCI rebounds towards the 38.2-50% Fibonacci retracement of the Jan 08-Mar 09 downtrend, we are looking at a target of 1,098-1,180pts for the index in 2H09. We think KLCI's uptrend since early-Mar is at its tail-end and a short-term correction is expected soon. Weakness offers opportunity to accumulate. We think this trend is also likely for other regional and US equity indices. For most of our top fundamental stock picks, the charts are looking bullish.
Our favourite technical stock picks are Gamuda, Genting, MRCB, Kencana and Petra Perdana.
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