Relieved! These Two ‘Winds of Heaven’ Are Ready to Fly JCI in Session II

Jakarta, CNBC Indonesia – The Jakarta Composite Index (JCI) closed bolting back above the 5,800 level after flying 0.77% to 5,805.22 in the first trading session Thursday (20/5/21).

Today’s transaction value is IDR 5.5 trillion and foreign investors have observed a net purchase of IDR 135 billion in the regular market. It was recorded that 232 shares were appreciated, 218 were corrected, the remaining 168 were stagnant.

From Uncle Sam, The long-awaited release has been published. At exactly 01.00 WIB in the morning the US central bank, the minutes were uploaded to its official website. The minutes of the Fed’s policy-making meeting on April 27-28 gave the signal that the market was looking for.

Last month’s inflation was recorded at 4.2%. If calculated on an annual basis, the growth was the highest since 2008. However, on a monthly basis, it was the highest in the last three decades.

The Fed’s inflation target is in the range of an average of 2%. Obviously if inflation continues to creep up, the Fed must immediately take steps to tighten monetary policy so that the economy does not overheat.

Investors also need to pay close attention to the release of macro data in the form of Indonesia’s international trade which will be reported by BPS today. Indonesia’s trade balance will experience a surplus in April 2021. A surplus figure occurs when exports are higher than imports.

The export figure in April 2021 reached US $ 18.48 billion while the import figure reached US $ 16.29 billion.

With this, a surplus in the trade balance would reach US $ 2.19 billion. This surplus has occurred in 12 consecutive months.

This was the BPS report submitted by the Head of BPS, Suhariyanto, Thursday (20/5/2021).

The market consensus collected by CNBC Indonesia estimates that exports will grow 43.92% compared to April 2020 (year-on-year/yoy). Meanwhile, imports are expected to grow 30.7% yoy. Then the trade balance ‘predicted’ a surplus of US $ 1.17 billion.

The government is also targeting economic growth in 2022 of 5.2-5.8 percent or higher than this year’s projection. The target has taken into account the conditions of the Covid-19 pandemic that are still there, but under control.

“Economic growth is assumed to be 5.2-5.8%,” said Minister of Finance Sri Mulyani Indrawati during the submission of KEM PPKF RAPBN 2022 at the DPR Building, Jakarta, Thursday (20/5/2021).

Technical Analysis

JCI movement using the hourly period (hourly) of the Boillinger Band (BB) indicator through the upper limit (resistance) and lower limit (support) area method. Currently, the JCI is in the middle boundary area, so the next JCI movement tends to appreciate.

To change the bias to bullish or strengthening, it is necessary to pass the resistance level in the 5,820 area. If it is able to break this level, JCI will continue to advance up to 5,875. Meanwhile, to continue the bearish trend or decline, it is necessary to pass the support level which is located in the 5,754 area.

The Relative Strength Index (RSI) indicator is a momentum indicator that compares the amount of increase and decrease in the current price in a period of time and serves to detect overbought conditions above the 70-80 level and oversold below the 30- level. 20.

Currently the RSI is in area 41 which has not shown any overbought or oversold indicators yet, however, the RSI is consolidating up after previously falling to an oversold level which indicates that the Index has a chance to strengthen.

Overall, through a technical approach with the BB indicator at the middle boundary, the next movement is likely bullish. This is also confirmed by the RSI indicator which is consolidating upward.

The index needs to pass (break) one of the resistance or support levels, to see the direction of the next movement.

CNBC INDONESIA RESEARCH TEAM

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