Investors should look to buy on dip AMMB, Axiata, Genting, Genting Malaysia and Maybank for medium-term upside, says a head of researchConflicting signals from daily and weekly momentum and trend indicators for the FBM KLCI last Friday suggest that stocks should stay congested this week, with weakening buying momentum implying that buyers are unwilling to commit themselves despite the more robust rebound in global stock markets. For the local market to climb higher, it is crucial that buying momentum improve to the 1.5-billion-share mark and above on a daily basis to encourage stronger retail participation in the broader market.
Stock-wise, investors should look to buy on dip AMMB, Axiata, Genting, Genting Malaysia and Maybank for medium-term upside, while lower-liner construction-related stocks MRCB, UEM Land and Zelan are bargains on further dips. Retailers should re-visit oil & gas services stocks such as Kencana, SAAG and Scomi Group on further dips for technical rebound gains, similarly for momentum stocks LCL Corp, Leader and RCE Capital.
As for the KLCI, immediate support is adjusted lower to the 30-day SMA which read 1,156 as of last Friday, with the lower Bollinger band (1,152) and 1,140 acting as stronger support bases. On the upside, immediate upside hurdle will be at the 1,169 to 1,180 region, with 1,190-1,196 as next resistance zone, while the 1,200 formidable resistance will require a strong bullish breakout to boost upside towards 1,220, and then 1,248, which represents the 61.8 per cent FR of the fall from the 1,525 all-time high to the 801 pivot low, which is our best-case upside target for this year.
The subject expressed above is based purely on technical analysis and opinions of the writer. It is not a solicitation to buy or sell.
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