Jakarta, CNBC Indonesia – The Composite Stock Price Index (JCI) finally managed to break an all-time high of 6,704,464 last Thursday. However, the JCI ended trading at 6,691,342 or rose 0.12% only.
Good news from China yesterday made the stock market green. Property giant Evergrande Group has reportedly started paying coupons to some of its bondholders. The case of default in China’s property sector previously sparked fears it would have a widespread impact and put pressure on the stock market. However, now the anxiety is starting to subside.
JCI still has the chance to continue strengthening and breaking records again on Friday (12/11). This is because global stock markets, including Wall Street, rose on Thursday’s trading, starting to escape from anxiety about high inflation in the United States (US).
Technically, JCI finally managed to break the highest record and reached 6,700 for the first time in history yesterday. The signs have been seen since last Wednesday when the JCI was able to end trading above the tail (tail) Dragonfly Doji pattern which is at 6,673,515.
The Dragonfly Doji pattern was formed on Tuesday (26/10) which is a reversal signal. Since then, the JCI has experienced a correction and has only risen in the last five days.
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Graph: Daily JCI Foto: Refinitiv- – |
However, after setting a new record high, the JCI evening formed a Doji pattern. Unlike the Dragonfly Doji which is a reversal signal, the Doji pattern gives a neutral signal. This means that market participants are still hesitant to determine the direction, whether to continue up or go back down.
However, considering that the Doji appeared when the JCI position was high, the risk of a correction was greater. Moreover, looking at the Stochastic indicator which just came out of the overbought area (overbought) on the 1 hour chart.
 Graph: JCI 1 HourFoto: Refinitiv- – |
Stochastic is a leading indicator, or an indicator that initiates price movements. When Stochastic reaches the territory overbought (above 80) or oversold (below 20), then the price of an instrument has the opportunity to reverse direction.
The closest support is at the range of 6,630, if the JCI is penetrated, there is a risk of a correction to 6,600 to 6,590.
Meanwhile, if it is able to penetrate 6,700, the JCI has the opportunity to break the all-time high again, heading towards 6,730.
CNBC INDONESIA RESEARCH TEAM
(pap / pap)
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