Morning Dew - 17 September 2013

Key Points

• JCI soared as the market cheered Larry Summers' withdrawal from his bid to become the Fed chief replacing Bernanke. Summers is viewed as less tilted towards accomodative monetary policy while the market favors Fed's number 2 Janet Yellen to be Bernanke's successor. Elsewhere, both the US and Russia have agreed on a plan to remove chemical weapons off Syria. JCI gains brought it back closer to the key resistance at 4563.
• As the index burst past the resistance at 4373, the rally brought it within spitting distance to its next key resistance at 4563. At this key resistance also lie both 100-day and 200-day EMAs. This could mean that we may see stiff resistance before the index could open up more potential to rise back towards 4700 and later on, 5000.
• Our new addition to the reco pool, LCGP, had its entry price filled at 250. Currently still at the losing side alongside ARNA, the other two recos are still holding out in the green: MDLN and PGAS. We are adding another reco today: MLPL, which aims at 470 with risk set on a break of 315 while the suggested entry price between 385-395. This is a no buy-and-hold trade given the nature of MLPL. Once the objective is reached, it is very recommended to exit the trade. Else, simply use trailing stop technique if aiming for more gains beyond 470.
• US Consumer Price Index (CPI) is due for release on Tuesday, and the year-on-year core inflation in August is expected to tick up from 1.7% to 1.8% while the headline inflation is seen to have trickled down from 2.0% to 1.6%. Month-on-month, the core gauge is seen to have slowed from 0.2% to 0.1% while the headline number is seen steady at 0.2%. FOMC meeting is to start tonight and will end tomorrow with the Fed is expected to start trimming its bond purchases by $10b.

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