September Effect is predicted to occur, see stock recommendations to buy in installments

Reporter: Nur Qolbi | Editor: Khomarul Hidayat

KONTAN.CO.ID – JAKARTA. September is often considered a bad month for the stock market. The reason is, there is a downward trend in the Composite Stock Price Index (JCI) this month, so it is referred to as September Effect and September Gray.

Analyst of Jasa Utama Capital Sekuritas, Chris Apriliony, agrees with this. According to him, if you look at the annual cycle, there is indeed a large correction in the JCI in September.

He predicts, September Effect will also happen this year along with the lack of positive sentiment in the stock market. “It’s likely to happen in the second to third week of September with bottom JCI is in the 5,920 area,” said Chris when contacted by Kontan.co.id, Sunday (5/9).

MNC Sekuritas analyst Herditya Wicaksana has also predicted since the beginning of the year that there will be a correction in the JCI in September-October. According to his predictions, bottom JCI will be in the range of 5,500-5,850.

Meanwhile, Panin Sekuritas analyst William Hartanto saw, September Effect likely to occur, but with a limited reduction. The reason is, the stock market has a positive sentiment as the policy is postponed tapering off by the United States central bank. “For now, JCI is moving to consolidate in the area of ​​6,000 – 6,172,” said William.

Also Read: JCI is predicted to move sideways next week, pay attention to the looming sentiment

Even so, the three analysts agreed, the downward momentum of the JCI in September could be an opportunity for investors to collect a number of stocks. William himself advised investors to do buy on weakness every time there is a weakness in the stock market.

According to him, coal mining stocks such as PT Adaro Energy Tbk (ADRO), PT Indika Energy Tbk (INDY), and PT Delta Dunia Makmur Tbk (DOID), as well as property shares such as PT Summarecon Agung Tbk (SMRA) and PT Bumi Serpong Damai Tbk (BSDE) can be an option for collection. The reason is that coal stocks are still sideways, while property stocks are technically already in the oversold area.

“Investors can buy these shares at the current price. The target price for ADRO is at Rp. 1,600 per share, INDY at Rp. 1,710, DOID at Rp. 340, SMRA at Rp. 950, and BSDE at Rp. 1,015 per share,” William said.

Even so, William advised market participants not to buy it aggressively, but to buy it in installments first. The reason is, if you look at the annual cycle, there is another weakening momentum of the market which usually occurs in November.

Herditya also advised investors to accumulate shares by buying installments, especially if the JCI is below the 5,900-6,000 level. According to him, shares in the telecommunications and construction sectors can be an option.

“Technically, telecommunication stocks are still attractive and it is estimated that there is still an opportunity for an uptrend. Meanwhile, construction stocks seem to have started showing signs of an uptrend in the short term,” said Herditya.

In a similar vein, Chris also argues, the decline in the JCI to below the 6,000 level is an interesting opportunity to start collecting a number of stocks. Chris advised investors to buy stocks that are not significantly correlated with the JCI movement.

That way, these stocks will not be too affected by the decline in the JCI. “Meanwhile, I tend to choose stocks of second liner and third liner,” said Chris.

According to him, shares in technology, logistics and transportation companies, as well as shares in the health sector can still be attractive options. The reason is that these stocks are still in the positive area with supportive sentiments.

Chris suggested looking at four stocks, namely PT Adi Sarana Armada Tbk (ASSA), PT Bank Rakyat Indonesia Agroniaga Tbk (AGRO), PT Bank Aladin Syariah Tbk (BANK), and PT Erajaya Swasembada Tbk (ERAA). Support and resistance to watch for ASSA are at 2,550-2,800, AGRO 2,120-2,420, BANK 3,000-3,400, and ERAA 555-640.

Like other analysts, he advised investors to collect these stocks slowly. Considering that the stock market is still likely to find it difficult to continue rising and there is a possibility that the JCI will be corrected again.