Jakarta, CNBC Indonesia – The Composite Stock Price Index (JCI) fell 1.18% to 5,100,865 on Tuesday’s trading. Trade data noted that foreign investors conducted net selling of up to Rp. 1 trillion in the regular market with a transaction value of Rp. 7.9 trillion.
The Central Statistics Agency (BPS) announced that Indonesia’s import figures in August 2020 were US $ 10.74 billion. Down 24.19% compared to the same period the previous year (year-on-year/YoY).
The market consensus gathered by CNBC Indonesia estimates that imports will contract by 18.78% YoY. Meanwhile, the consensus version of Reuters predicts a deeper contraction of 20.58% YoY.
The sharp decline in imports means that domestic demand has not yet recovered, meaning that business is still running slowly. So that a recession is almost certain to occur in the third quarter of 2020. The sale also hit the JCI yesterday.
Meanwhile, the US stock market (Wall Street) strengthened again, although slightly, on Tuesday local time trading could provide positive sentiment to Asian markets, including the JCI this morning, Wednesday (9/16/2020). Market participants are focused on the US central bank (Federal Reserve / The Fed), which will announce monetary policy early Thursday.
Technically, the level of 5,163 proved to be a “thick wall” aka strong resistance to hold back the strengthening of the JCI.
This level is 50% Fibonacci retracement on the daily chart, so it becomes a strong resistance / support. The fiber pulled from a September 2019 high of 6,414 to this year’s weakest level of 3,911 on the daily chart.
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Graphic: Daily IHSG Foto: Refinitiv- – |
The stochastic indicator on the daily chart has moved up from the oversold territory (oversold).
Stochastic is leading indicator, or indicators that initiate price movements. When Stochastic reaches the overbought area (above 80) or oversold (below 20), the price of an instrument has a chance to reverse.
 Graph: IHSG 1 hourFoto: Refinitiv- – |
Meanwhile looking at the 1 hour chart, the stochastic indicator is out of the territory overbought, so that the pressure drops off a little. The closest resistance is now at 5,130, if it is successfully passed JCI has the opportunity to strengthen back towards 5,163. In order to strengthen further, JCI needs to pass through this “thick wall”.
Meanwhile, while stuck below resistance, JCI is at risk of weakening to support closest in the range of 5.070. If this support is broken, JCI is at risk of weakening to 5,040.
CNBC INDONESIA RESEARCH TEAM
(pap / pap)
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