Like the Roller Coaster in Episode I, JCI Threatened to Close in the Red

Jakarta, CNBC Indonesia – The Composite Share Price Index (IHSG) closed at 6,807.86 or weakened 0.02% daily at the end of the I session on Friday (31/3/23).

A total of 253 stocks fell, 257 stocks rose while the rest 182 were flat or unchanged. By late afternoon, the purchase value reached around IDR 4.58 trillion involving 9.32 billion shares that changed hands 804 thousand times.

The decline of JCI was reflected in the weakening of many sectors. According to data from the Indonesian Stock Exchange through Refinitiv, eight sectors are in the red zone. The service and energy sectors were the most affected by the index, falling by 0.55 and 0.49 percent respectively.

This morning the JCI opened higher but gradually weakened until the close of the I session. Wall Street, which strengthened last night, actually gave a positive impression to the Indonesian stock market, JCI.

However, veteran investor Jeffrey Gundlach offers some advice sell at a public meeting or sell when there is an increase. He sees in the next few months the US will experience an economic recession and the Fed will cut interest rates several times this year.

The release of US inflation data on personal consumption expenditure (PCE) tonight is the main concern of market players and could have an impact on Indonesia’s financial market next week. This data is the Fed’s reference in setting monetary policy. Reuters poll results show PCE inflation rising 4.7% year to year (yoy) in February, same as last month.

Attention is also directed to China, which reports data on manufacturing activity, evident from the purchasing managers’ index (PMI). The results of a Reuters poll showed that China’s manufacturing PMI this month was lower at 51.5 than last month’s 52.6. Although it is decreasing, the figure is still above 50 which means expansion.

This can give a positive sentiment to the stock market for the rupee, because China is currently the pillar of global economic growth. The industrial sector, which continues to expand, shows that the demand for imported goods is still good.

Technical Analysis

JCI is analyzed on a one-hour time frame and uses Bollinger Bands (BB) and pivot points to find nearest resistance and support.

In session I, JCI swung from the green zone to the red zone after failing to break through the closest resistance at 6,830. However, the JCI still managed to stay above the middle band of BB (6,803), although it had fallen below 6,800, 6,790 to be precise, this morning.

The movement of JCI is also visible with other technical indicators, namely the Relative Strength Index (RSI), which measures momentum.

RSI is a momentum indicator that compares the magnitude of recent price increases and decreases over a period of time.

The RSI indicator works to detect an overbought condition above the 70-80 level and an oversold condition below the 30-20 level.

The RSI position dropped to 56.84 and was placed outside the overbought zone.

At the same time, it appears from another indicator, the Average Moving Dividend (MACD), on the hourly chart of the MACD chart it is below the signal line after forming a dead cross, a reversal signal (correction) last Thursday.

In period II, JCI has the ability to close lower and test the 6,800 support again. If it is broken, the next support will be 6,736.
At the same time, the nearest resistance is 6,808 and 6,830.

Disclaimer: This article is a journalistic product in the form of an opinion piece from CNBC Indonesia Research. This analysis is not intended to persuade readers to buy, hold or sell products or related investment sectors. The decision is entirely up to the reader, so we are not responsible for any loss or profit resulting from that decision.

CNBC INDONESIA RESEARCH

research@cnbcindonesia.com

(shark/shark)