Positive vibes from regional markets helped the index to rally from the lower end of the 2 week trading range, if momentum continues we shall see a run to test the upper end resistance of 5.165. A close above would suggest that there is more room to go and meet the all time high of 5.250.
Support: 5.080-5.050-4.980, Resistance:5.165-5.250-5.350
Stock picks: (BUY: TLKM, BBRI, BMRI, KLBF)
1. Telekomunikasi (TLKM) (BUY) (PE 2014 18.5x, PBV 3.7x, ROE 19.7%) (Trading target Rp.2.900)
We view that this big cap telco counter has just broken out from the current 2 week ascending triangke formation on the daily chart, with measure moved target set at Rp.2.900.
Entry (1) Rp.2.700, Entry, (2) Rp.2.625, Cut loss point: Rp.2.575
2. Bank BRI (BBRI) (PE 2014 11.4x, PBV 3.14x, ROE 27.6%) (BUY) (Trading target: Rp.11.250-11.450)
Bargain hunting in this state owned big cap micro segment retail bank which had been corrected from the all time high Rp.12.300 may evolve into a new minor uptrend or upward retracement to Rp.11.250-11.450.
Entry (1) Rp.10.750, Entry (2) Rp.10.450, Cut loss point: Rp.10.275
3. Bank Mandiri (BMRI) (PE 2014 12.5x, PBV 2.5x, ROE 20.4%) (Trading target Rp.10.575)
From a technical standpoint, the 2 week corrective phase in this state owned big cap bank from the all time high of Rp.11.00 has ended and the subsequent rebound has formed a new minor uptrend to test resistance at Rp.10.575.
Entry (1) Rp.10.250, Entry (2) Rp.10.150, Cut loss point: Rp.10.025
4. Kalbe Farma (KLBF) (PE 2014 30.2x, PBV 7x, ROE 24%) (BUY) (Trading Target Rp.1.740-1.800)
The rebound from the lows generated by a correction needed to ease daily overbought readings in the medium uptrend for this drug producer and distributor may continue until we see the next upper end points of Rp.1.740-1.800.
Entry (1) Rp.1.630, Entry (2) Rp.1.595, cut-loss point: Rp.1.565
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