Morning Dew - 1 August 2013

Key Points

• JCI ended slightly up after briefly dipped during Wednesday session. The index is seen trading light ahead a week-long holiday next week. In addition, lack of major macro catalysts will shift the attention to earnings report of individual stocks. Upside still seen capped around 4779 while the downside is seen supported around 4545. MACD is flirting with the zero line while the RSI has dropped as well.
• US GDP rose 1.7% at annualized rate following a 1.1% increase in the first quarter. This reading is better than the consensus which forecast a 1% increase. Consumer spending was reportedly slowed to 1.8% rise after 2.3% in the prior quarter. Elsewhere, ADP employment report showed that the private sector added 200k jobs in July, better than the forecast increase of 180k. Next Friday we are expecting the release of nonfarm payrolls of about 185k following a 195k increase in June. Better-than-expected NFP will bolster the odds that the Fed will start reducing the stimulus sooner rather than later.
• Falling Dow could push the JCI back to the downside this Thursday. The immediate support is seen at 4545 followed by 4491. We are now at the second leg of wave c of B which, theoretically can go as far as to the beginning of wave c at 4403. As for the recos update, the rise on Wednesday took BBCA to meet its objective at 10450. Thus, this reco is closed at a 13.59% gains. Five other recos stay active and there's no change in viiew.

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Morning Dew - 31 July 2013

Key Points

• JCI edged higher on Tuesday as it gained 0.61%. Still, the upcoming one-week holiday is expected to sap volume out of the market and combined with lack of catalysts we are most likely see the index to fluctuate in a limited range. US stocks also ended mixed as the Dow slipped while the S&P 500 index went up slightly along with the NASDAQ.
• This week the FOMC will meet (starting on Wednesday) and while there isn't any policy changes expected from the meeting, the market would like to hear what the Fed will say in this meeting. FOMC is seen starting to start tapering out its stimulus in September, removing it completely next year and to start raising rates about a year afterwards. Nonfarm payrolls data this week will also provide some clues on how close we are to this scenario.
• There is no change in view from the technical stand point. JCI is seen supported at 4492-4495 while the key resistance is seen at 4779 (recent high). Failure to hold on to the support area will risk the index to fall deeper towards the crucial support at 4403. A bullish harami coupled with a rising volume is seen positive for the Wednesday session, but lack of positive catalysts may limit the upside potential.

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Morning Dew - 30 July 2013

Key Points

• JCI crashed below its support at 4582/4591 and this suggests that the current wave ii of c will go deeper than initially expected. Next key support lies at 4492-4495. This should hold or risk a major test of 4403 reversal point. Not looking good on the indicators point of view as the price has fallen back below its EMA band as well as its MACD is heading fast below the zero line. Diminishing volume however, indicates a potential rebound but the key upside is still the 4779 (recent high).
• The Dow fell as the index of pending home sales fell 0.4%, below the forecast in June. The market is basically still trying to gauge the risk of the reduction of stimulus by the Fed next September. The key data will be due next Friday when the nonfarm payrolls are scheduled for release. Payrolls are seen up 185k in July after a 195k increase in June. Meanwhile, unemployment rate is seen to have ticked down from 7.6% to 7.5%.
• JCI is seen fluctuating with declining volume as the domestic market heads towards a one-week holiday next week. Reactions to payrolls may not be significant this time as it will be delayed until a week afterwards. For now, technically we are seeing another potential dip towards  4492-4495.

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Morning Dew - 29 July 2013

Key Points

• JCI was successful in cracking the resistance at 4740, but the rally was capped at 4779 before the index slipped back to end the week at 4658. The fall hinted that the wave c of B which started at 4403 could have ended at 4779 and that the index is currently unfolding the second leg of the wave c. Several retracement points are used to project the end of this wave (2): 4635, 4591, 4546, and 4492. We also have 4582 (the terminus point of minor wave (iv)) which suggests that 4582-4591 will be the key support area next week. Upside, only above 4779 will confirm that the current wave (2) of c is over.
• Aside from lack of macro catalysts, the upcoming one-week closing of IDX will sap the investors' appetite to position their trades. Meanwhile, the next big thing on the US economic calendar is the nonfarm payrolls for July, which will be responded only after holiday is over. That will be a week after the data is released. As we get nearer to September, expect the market jitters over the Fed's monetary policy to return to the central stage.
• Poor 1H13 financial report has cost MAPI dearly. The reco has been closed at a loss of 9.35%. ASRI finally found its entry spot at 710, so there will be six active recos to start next week.
• Elsewhere, US stocks ended the week barely changed with the Dow gained 0.1% and the S&P slipped 0.03%.Both FTSE and DAX fell over 1% each in Europe throughout the week.

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Morning Dew - 26 July 2013

Key Points

• JCI failed to hold ground above 4677 and slipped to 4665.8 before it settled the day at 4674. As mentioned yesterday, such failure opens up a risk for the index to fall deeper. It looks like the rebound wave from 4403 has run its course at 4779 and the next key support is at 4635 and 4582. Upside, the resistance comes at 4779 again.
• Not much fluctuations throughout the US market as market has been preoccupied by US corporate earnings. Lack of positive and negative catalysts, expect the JCI to trade in a tight range.
• MAPI got hit hard along with IMAS, while ASRI still awaiting for entry. BBCA got knocked back after coming so close to its target at 10450. No change in view on the remaiing trade recommendations.

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Morning Dew - 25 July 2013

Key Points

• JCI's rally fizzled as it fell to end the Wednesday session at 4718.10. Poor manufacturing data from China torpedoed JCI's march towards its next objective at 4848. As support at 4740 has been taken out the next support is seen at 4677. This has been tested on Wednesday and it looks set to be challenged once more on Thursday. Below 4677 the index risk falling deeper towards 4582.
• Puradelta Lestari Tbk. set the range of its IPO price to 205-255 per share, reflecting a 50%-60% discount to its NAV. The property company is offering 10.84 billion shares at the most to the public and appointed Sinarmas Sekuritas and Macquarie as joint lead underwriters. The proceeds from the IPO is aimed at developing the infrastructures around its kota Deltamas Bekasi.
• ACES has its fill and ended at 750, up 4.17% so far. ASRI remains at the sideline as it continues to wait for entry. IMAS returns to red while BBCA is within spitting distance to its final destination at 10450.
• Poor China manufacturing data returned to spook investors. HSBC manufacturing PMI for July fell to 47.7 after it stood at 48.2 in June. Reading below 50 marks contraction while above 50 marks expansion.
• US stocks showed mixed results as the Dow and S&P 500 indexes slipped but the NASDAQ index was up slightly. Lack of major catalysts and muted response to China's data has set the expectation to the coming Thursday session back to neutral.

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Morning Dew - 24 July 2013

Key Points

• As the JCI powered through the double-top resistance at 4740, it immediately climbed higher to reach 4767 and settled there for the day. Foreign buying also seen supporting the rally, accompanied by all but one sector (agriculture) rising. Prior resistance at 4740 now serves as support. As mentioned yesterday, the next upside target is 4848 as the wave c of B continues to unfold.
• ROTI has met its technical price objective at 8200, but it failed to get its entry price filled. Hence, ROTI is removed from the reco list, leaving ASRI as the only one unfilled reco at the moment. ACES however, has been added into the recommendations list. ACES is seen heading towards 920 with risk level spotted below 630. It is recommended to entry at around 700-720.
• Lackluster US session sent the Dow up for another tiny gains on Tuesday. Meanwhile, in China Premier Li Keqiang said that the government will tolerate growth of 7% at the most. Reactions were muted as investors' attention now sapped as corporate earnings are due for release.

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Morning Dew - 23 July 2013

Key Points

• JCI struggled at the start of the week as it failed to climb past 4740 prior peak and instead fell back to reach its first-line support at 4679 (4677). This raised a concern that we may see a deeper correction of the recent rally from 4433 to 4740. The retracement points of this rally are spotted at 4660, 4611, 4571 and 4531 with 4482 as the most distant point. Examining the structure of the current wave c of B, we are most likely within the wave ii of c, with expected terminus at around 4582 (this points at the significance of 4571) or around 4482-4495 under a more pessimist scenario. Nevertheless, we need to crack the key 4740 to negate the bearish pressure in the near-term. JCI is seen range-bound from 4677-4740.
• Japan PM Shinzo Abe's victory over the weekend vote received a positive response early at start of the Monday session. With this victory, Abe is seen to have more power to implement his growth strategy. It remains to be seen whether he will succeed in doing so, but the market so far is confident.
• Not much to be seen from U.S. this week except from corporate calendar which is packed with corporate earnings. Monday saw minor gains from the US indices, which translate into a positive Tuesday session for JCI, especially after a dip.

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Morning Dew - 22 July 2013

Key Points

• JCI ended the week up by 1.97% as the rebound continues. The upside seems to be capped at 4740 however, which is also the 100-day EMA. It's going to be a make or break situation for JCI this coming week as the upside strength has been weakening as indicated by the declining volume. First line support comes in at 4679 while the more serious support comes at 4635. As for the upside, targets come in at 4740 first, then 4848 and subsequently 5124. It is likely that the current wave c of B will end up at 4848 considering lack of positive catalysts.
• Lack of macro catalysts will shift the investors' attentions to the corporate earnings in the US. This could mean another limited fluctuations of JCI in the coming week. So far, the Fed's Bernanke's assurance that there's no preset timing of the end of QE3 has been receiving positive response but keep well in mind that that does not mean the Fed won't start the reduction of stimulus this September. We could still see the stimulus getting reduced in September and removed completely one year from now and that the rates to start rising in 2015.
• TELE has been out of the recommendation pool as it fell below its stop loss point last Friday. So, at the moment there are six active recos and two recos pending for entries (ASRI and ROTI). BBCA remains on top of the list, followed by WSKT.

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Morning Dew - 18 July 2013

Key Points

• JCI took a late surge to arrive at 4679 near the closing bell. This signifies that the wave B of the correction is likely to extend to the next Fibo target at 4848. We seem to be at the third leg of wave B (wave c), once we clear 4679, we will set eyes on 4848, our next Fibo target, and subsequently 5124. Crucial support stays at 4373.
• One reco has been cancelled as AISA has already arrived at its price target at 1430. So, we now have two pending for entry (ASRI and ROTI), one at par with the entry price (IMAS), one losing position (TELE) and four in the green (BBCA, BBRI, WSKT and MAPI).
• In his testimony before the House Panel, the Fed chairman Ben Bernanke said that the Fed has no preset timing on exiting the QE. This indicates that the FOMC will keep on watching the economic data flow before deciding to reduce its stimulus program. Several key indicators mentioned were employment outlook and inflation. These two are key factors for the Fed at the moment.

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Morning Dew - 17 July 2013

Key Points

• JCI ended slightly higher after failed to breach its resistance at 4679. This signifies that the wave B of the correction remains in progress. We seem to be at the third leg of wave B (wave c), and this means the recent peak at 4679 is key to confirm this assumption. Once cleared, we will set eyes on 4848, our next Fibo target, and subsequently 5124. Crucial support stays at 4373.
• We have MAPI added into the pool of recos today as it reached its entry point at 6950. We now have six recos filled and another three awaiting to be triggered. BBCA, BBRI and WSKT are currently in the green while IMAS stays neutral and two are in the red (TELE and MAPI).
• Hawkish comment from Kansas City Fed Chief Esther George sent the stocks down along with poor result coming from Coca-Cola Co. KO's sales volume missed estimates as economic growth slowed. George stated that the US is on the right path for economic recovery and thus cutting the pace of stimulus are appropriate as inflation seem to be moderate, hence the interest rates should not be held too low for too long. Elsewhere, industrial production grew 0.3% in June after being stable in May.

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Morning Dew - 15 July 2013

Key Points

• JCI finished the week 0.66% higher, rebounding off recent low of 4403. Both LQ-45 and IDX30 also bounced and gained 1.75% and 1.79% throughout the week, respectively. Ben Bernanke's reassurance that the US economy still needs the stimulus brought a temporary sigh of relief. From the domestic front the Bank Indonesia raised its rates by 50 basis points to 6.5% as the central bank delivers a preemptive strike against potential jump in inflation after fuel prices were raised recently and as the dollar gained strength against rupiah. Across the globe, the stock indexes ended the week firmly, setting for another follow-up the coming week.
• While the market rejoices as stocks climbed, the technical outlook still urges a caution. The fallout to 4403 has put an end to the wave b of B, which means the current wave is unfolding the wave c of B. The first objective has been reached at 4678 and the next one is 4848. With the wave B can reach to as high as the top (or even exceeds) of wave A, we can even see the index to go to 5124. Still, with so many negatives around, 4848 is the most reasonable target at the moment. On the downside, 4403 and 4373 will be the crucial supports for the index.
• One thing to keep in mind, Bernanke said that the U.S. economy still needs the stimulus, but he did not say that the Fed is reconsidering its plan to taper off the amount of stimulus. In addition, Fed Bank of Philadelphia President Charles Plosser stated that the Fed should begin tapering in September, while James Bullard from St. Louis Fed said that the cut back should wait until inflation accelerates towards 2%, the Fed's target inflation.

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Morning Dew - 12 July 2013

Key Points

• Bank Indonesia raised its rates by 50 basis points to 6.5% along with the deposit facility rates by 50 basis points to 4.75%, but maintained the lending rates at 6.75%. The move was a surprise for the market which didn't expect the central bank to deliver such a steep hike. After the initial jolt, the JCI steadied and finished the day up by 2.8% with the foreigners side flipped from having a net sell to a net buy for the day.
• With the downside looks pretty secure for now, we maintain that the index is gunning at the completion of wave C which targets 4678, 4848, and up to 5124. Key support remains at 4373. No key news are expected at the moment, so we are likely to see the index continuing its ascend to the aforementioned resistances on Friday. Still, as we are most likely within the B wave, we are not out of the woods yet.
• US jobless claims were up more than expected during last week, but this was largely caused by seasonal factor. The FOMC minutes on the other hand showed that about half of the participants of the FOMC meeting wanted to stop the bond purchases by the end of this year. Bernanke himself in his speech said that the US economy needs a highly accommodative monetary policy for the foreseeable future.
• We have added five new recommendations to the list: ASRI, ROTI, AISA, MAPI, and WSKT. Refer to the table for the detailed trade setup.

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Morning Dew - 11 July 2013

Key Points

• JCI bounced as expected after struggling to defend the crucial low at 4373, helped by the data from China which suggested that China is facing a tough slowdown as government tries to put a brake on the credit growth. Anticipating the speech from Ben Bernanke as well as the release of FOMC minutes on Wednesday, the market seemed to be cautious, thus capping the upside potential.
• Exports out of China tumbled in June by 3.1% vs. a year ago while imports also fell 0.7%. The market had expected exports to have gained 3.7% while imports were forecast to have increased by 6%.The poor reading indicates that the Chinese authority may still have to wait before loosening up their monetary policy.
• Nothing new coming out of the Fed's minutes as well as from the Bernanke Chief. Looks like we are indeed, targeting the end of wave C and this could be at 4678, 4848, orc up to 5124 .On the downside, the support will be at the crucial 4373. The index is seen resuming its rebound but the upside is likely to be limited.

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Morning Dew - 10 July 2013

Key Points

• JCI finished lower again as selling continued on Tuesday. The index approached the crucial support at 4373 as it ended at 4403.80 with foreigners continued to pull out. Combination of negative catalysts have been putting great pressure on domestic stocks recently, ranging from the Federal Reserve monetary policy to domestic monetary as well as fiscal policies. China has been another wildcard as fear of slowdown in the mainland spooks investors.
• Technically speaking, JCI continues to unfold its wave b of B. This complex wave could end anywhere. It can just end at today's low at 4403.80, or it can be around 4373, or even below 4373 should an irregular structure occurs.Upside, resistance come at 4647, followed by 4819. We need to see the index pops back above the latter to confirm that wave c of B is unfolding. Positive Dow overnight hinted a rebound is to commence on Wednesday.
• U.S. monetary policy returns to the central stage this week as the minutes of the fateful FOMC meeting is set for release this midweek while at the same time Fed's boss Ben Bernanke will deliver his speech. On another front, the earnings season is set to start on Tuesday with Alcoa commences with the kickoff. Both macro and corporate factors will run simultaneously this time around.
• Just four recommendations remain on the list, and only BBCA held ground on Tuesday's session. BBRI stayed under pressure, TELE was having a near-death experience and IMAS continued to move back-and-forth between gains and losses. No new recommendations for now as we are still awaiting hints that the current wave b is completed.

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Morning Dew - 9 July 2013

Key Points

• Despite the more-than-expected gains in the number of NFP released last Friday, JCI fell again earlier this week. It fell to as low as 4433, more than the maximum retracement level of the rebound off 4373. This means the index's next support will be the key 4373. If this support is broken we are staring at the potential of the beginning of wave C. Currently, we can still assume that wave B remains in progress. Near-term resistance is seen at 4647.
• Concern over a cut in budget spending by the parliament also hit the sentiment. So far, only around 60% of the proposed budget of 110T rupiahs had been approved. Bank Indonesia's statement during the weekend that it is monitoring the channeling of lending from banks to the property sector to avoid rising nonperforming loan (NPL) among banks.
• U.S. stocks ended up again on Monday, suggesting that the regionals won't see red on Tuesday. Entering the earnings season in the U.S., corporate company reports are seen to be additional catalysts in shaping the market sentiment. This midweek we are also about to see the minutes of the latest FOMC meeting last May. Ben Bernanke is also scheduled to speak this week.
• More exits from the list as RALS, KBLI, BWPT and BMRI got brushed aside on Monday's massive rout. This brings the remaining recommendations to IMAS, TELE, BBCA and BBRI. We will continue to watch the market first before deciding whether to add more recos to the list.

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Morning Dew - 8 July 2013

Key Points

• JCI ended the week down more than 4% as selling pressure continued. Technically, the JCI is unfolding an inverted head-and-shoulders pattern which could be triggered once the neckline around 4760s is broken. More confirmation will be when the resistance at 4818 is broken. Breakout of the neckline could zoom the index up by around 400 points from the breakout point. For now, this is expected to be around the year's high. Still, until then the downside pressure remains as the index stays below the EMA curves, threatening a revisit of 4373 low. Near-term supports come at 4543 and 4478. Positive reaction to the NFP data on Friday signals a potential push upwards next Monday.
• US Nonfarm payrolls maintained its pace at 195k, the same as May, but beating the expectation of 165k. Unemployment rate also stayed at 7.6%, more than what the market had expected. Reaction was positive as the Dow climbed almost 1% along with S&P and NASDAQ indexes which also each edged 1% higher. The figure held that the increase in payrolls were still not enough to prompt the Federal Reserve to end its bond purchases soon.
• BSDE became the latest victim of the rout as the reco ended with an 11.35% losses. Hence, there are 8 recos left on the list. We're still watching the market for now before deciding to add more to the list.

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Morning Dew - 5 July 2013

Key Points

• JCI almost erased its entire gains on Thursday as the index ended slightly up by 0.1%. Lack of positive catalysts made the earlier gains unsustainable despite later on the ECB pledged its stance that it will keep the rates at the low level for an extended period, contrasting the Fed's which have prepped the market for a shift in policy. US markets were closed for Independence Day on Thursday, so any gains on Friday should be relatively limited.
• The technical outlook remains bleak as the index failed to return inside the EMA envelope while the MACD resumed its decline. European boost may keep the downside limited for now, but support is seen at 4543, followed by 4478. Uptick attempts on the other hand, will be capped at around 4818.9 due to lack of guidance from the Street. Above 4818.9 will mean the wave b of B has been completed at 4577 and that wave c of B may aim at 5022/5044 for completion.
• Friday's data will feature the key nonfarm payrolls. US economy is expected to have added 165k jobs in June, slower than 175k added a month earlier. Unemployment rate however, is seen at 7.5%, down from 7.6%. Note that both data came from different set of survey, hence the difference. This week's ADP suggests that the NFP could turn out to be better.

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Morning Dew - 4 July 2013

Key Points

• JCI resumed its fall on Wednesday and it reached 4577, just above the support at 4714. The dip is still considered as a decent pullback and the index is expected to hold above its subsequent support at 4648. The overall fluctuation seems to be ranging from 4500 to 5000 as the market weighs the course of Federal Reserve's policy.
• US data looked promising on Wednesday. The jobless claims were down to 343k during the week as compared to prior week's level of 348k. About 345k was expected. ADP employment report which measures private sector's payrolls was seen to be at 160k, but it turned out to have added some 188k jobs. No data to be expected on Thursday as the US celebrates its independence day.
• Outside U.S., in Egypt the military successfully removed President Mohamed Mursi from presidency. Constitution has been put on ice and a presidential election has been announced. In Portugal, the government is struggling to keep itself intact.

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Morning Dew - 3 July 2013

Key Points

• JCI resumed its fall this Tuesday as it reached 4724, just above the support at 4714. The dip is still considered as a decent pullback and the index is expected to hold above its subsequent support at 4648. The overall fluctuation seems to be ranging from 4500 to 5000 as the market weighs the course of Federal Reserve's policy.
• Despite early gains, the Dow ended the day down as investors stay cautious ahead of the key jobs data set for release on Friday. Earlier, factory orders were reportedly better than expected while Fed's William Dudley said that the Fed may extend the period of its bond purchases if required. The market now will be eyeing the ADP employment data which gauges the numbers of jobs added by the private sector, a good cue before the nonfarm payrolls data.

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Morning Dew - 2 July 2013

Key Points

• JCI suffered a minor setback as the new week opens. The index fell to as low as 4747 before it settled the day at 4777. The fall itself tracked the Dow's decline on Friday. Near-term, the index is expected to remain rangebound between 4500-5000 with the nearest support below 4747 coming in at 4714, followed by 4648.
• U.S. data this week will feature the nonfarm payrolls for June, and a jump in payrolls accompanied by a decline in the unemployment rate is seen as negative as such data will prompt speculation that the Fed will have a case in ending its monetary stimulus sooner rather than expected by the market. Payrolls are expected at 165k in June while unemployment rate is seen at 7.5%.
• US data were positive as the ISM index showed manufacturing sector expanded in June. The index rose from 49 to 50.9, beating the consensus of 50.5. Construction spending also reportedly up 0.5% in May. Positive sentiment from Japan's manufacturing also contributed positively as Tankan index showed a positive result among large manufacturers for the first time in seven quarters.

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