Dear fellow traders, after maintaining cautious stance for almost 1 month, the KLCI indeed drop towards the support of 1780 in late Friday afternoon before rebounding upwards to close at 1787. Is this the start of major downtrend or merely temporary consolidation before a technical rebound? I am of the view this depends highly on the outcome whether Greek defaults end of May and whether Yellen raises interests rate in June/Sept. 

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Macro View: (~) US market close down on profit taking for the long weekend. Questions following following Yellen's remarks on Friday is no longer whether US will raise interests rates this year but when. Majority are for September will small minority for June and some in 2016. Greece situation is becoming a real pain for everyone in the market not only Europe but the world. With only 1 week to the second credit deadline, Greece has yet to arrive at a compromise with creditors. Asia on the other hand suprised all to close at week high both for China, Shanghai and Hang Seng index. Bets on stimulus packages and continuous inflow of hot money sparked the run despite two major drop of more than 50% in Hanergy and Goldin in a span of 2 days. Oil hovered around USD60 and USD65 respectively for WTI and Brent.

Potential Risk in Global / Domestic Market: (-ve) Locally, FBMKLCI drop to a low of 1780 points until it rebounded to close at 1787 Friday. The run up for KLCI has been for close to 5 months since the oil plunge in December. There is definitely room for further correction and downwards movement. 11 Malaysia Plan which was suppose to be a catalyst disappointed many as it was more propoganda than substance. No new suprises except for heavy reliance on infrastructure development to propel growth for the nation. No mention of austerity measure as well.  

Contra Picks: Frontken and Tenaga (No TP)

I remain cautious but both counters have been resilient at support levels despite downward bias in the market as a whole. Should it fall to an attractive price, may consider to enter. Please trade carefully and observe the movement before entering. 

Short Term Picks: Signature International (TP RM3.00) and Edgenta (TP RM3.88)

I maintain optimism  on Signature due potential rerating in anticipation of stellar quarterly results. I believe there is a good chance it will move up toward my TP sooner than later.

Edgenta is a true star as it hit RM3.85 twice last week despite poor market sentiment. I maintain my target but if this week it still does not hit RM 3.88, I shall consider taking profit due to the good run up from my entry price of RM3.4++ when I first recommended this stock 2 months back. After which, I will look to buy in on lower entry price upon further weakness.

Mid Term Picks:  Gadang (TP RM1.96)

Gadang was dissappointing as it corrected severely with the market following 11MP announcement. The trend suggested upwards movement but it gapped down on Friday. Nonetheless, it is my mid term hold where any price below RM1.50 offers opportunity to buy in and accummulation for future run up.

Long Term Picks: Hohup (TP RM1.80)

HoHup dropped to RM1.32 after announcement of the quarterly results. Although revenue and profit increase significantly, the EPS was lesser due to the private placement earlier in the year. In addition, major shareholders and directors selling did not help. However, a deeper analysis of Hohup shows that it has proven the strong fundamentals and low PE ratio. I will continue to hold and look for opportunity to buy on weakness. 

Food for thought: If you can't beat em, join them!  

May good fortune come your way!

Disclaimer: This is not a recommendation to trade. It is merely the expression of the author's personal opinion and shall not be held responsbile for potential gains or losses executed by readers.