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HeaDstart 04-07-2013 (English Version)

Weakness as a buying opportunity within the long term bullish trend

As expected the index corrected, following failure to mantain and set new highs to fill in the second price gap at 4.675-4.587, we view that the index may remain consolidated within that range until further directional probabilities are set: Back to 4.750 or down to 4.450.

Closing (03-07) 4.590 (-138.312/-2.90%)

Support:4.450-4.250-4.150, Resistance:4.750-4.815-4.900


Stock picks: (BUY: PGAS, TLKM , KIJA, CPIN)

1.Perusahaan Gas (PGAS) (BUY) (Target Rp.5.750), (03/07 Rp.5.700)

Failure to make another high above Rp.6.000 and overbought conditions on the daily stochatic suggest that a correction may be in order for this state owned gas distributor, if such an event unfolds recommend buy on weakness for rebound within the bullish long term trend.

Entry (1) Rp.5.400, Entry, (2) Rp.5.200, Cut loss point: Rp.5.050


2. Telekomunikasi (TLKM): (BUY) (Target.Rp.10.650) (Close: 03/07:Rp.10.600)

A correction to to retest it's lower end supports (Rp.9.950 and Rp.9,650) could be use as accumulation points to catch a possible upwsing in this big cap state owned telco counter which business does not correlate with interest rate and inflationary trends 

Entry (1) Rp.9.950, Entry (2) Rp.9.650, Cut loss point: Rp.9.450


3. Kawasan Industri (KIJA) (BUY) (target Rp.345) (close 03/07: Rp.335)

A downside move in this industrial property counter which in theory is immune to a possible raise in interest rates from expected higher inflation to hit the medium uptrend-line at Rp.315-310 could be used as a speculative accumulation point in anticipation for a possible reversal back to the upside.

Entry (1) Rp.315, Entry (2) Rp.310, Cut loss point: Rp.300



4. Charoen Pokpan (CPIN) (BUY): (Target Rp.4.500) (Close 03/07 Rp.4.400)

The market is pricing in an over-reaction to a possible scenario of reduced consumer spending power which may lead to lessening demand for sky-rocketing poultry products (chiken). This may be perceived negative for this integrated chicken producer, however we forsee downside to be contained within the range of Rp.3.950-3.750.


Entry (1) Rp.3.950, Entry (2) Rp.3.750, cut-loss point: Rp.3.650


Yuganur Wijanarko Senior Research (Yuganur@hdx.co.id)

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