Morning Dew - 27 November 2013

Waiting for Santa

JCI tumbled again even as the US stock indexes firm across the board. The Dow is above 16k, S&P above 1,800 while the NASDAQ broke through 4k mark. 

Lack of new catalysts put the market mostly on hold as it awaits the next FOMC meeting. While James Bullard said that tapering is still on the table, it is likely to be put off until after the next US budget crisis sometime in 1Q14. Likewise, Bank Indonesia is expected to stay on hold in December on rates, but may not hesitate to strike again in 1Q14 if IDR stays weak, or should the current account condition deteriorates again.

Traditionally a good month for stocks, the beat up JCI is desperately looking for relief rally in December.

Housing and Confidence Data

Building permits gained 6.2% in October from prior month after a 5.2% increase in September. August data on the other hand, showed a 2.9% decline.

Meanwhile, house price index slowed to 0.3% after a 0.4% increase in August.

Consumer confidence however, ticked down to 70.4 in November, after it was expected to inch higher to 72.6 from 72.4 a month earlier.

Technically Speaking...

As support at 4,284 gave way, we are staring at the odds of testing the next support at 4,133. If 4,133 unable hold off the bears as well, we may revisit the old low at 3,837.

The fall on Tuesday was also accompanied by a jump in volume, but not as high as the one saw on Friday. This is not a good sign for the bulls. Despite the RSI had curled up a bit, the Tuesday fall skewed the curve back to the oversold area. MACD too, has fallen, completing the bearish outlook for the near-term.

PGAS has been removed from the reco list as it fell below its risk level at 4,600. 

INDF has been added to the list. Entry area suggested around 6,500-6,600, with risk set below 6,200 and target set at 7,400, implying a 1:2 risk-to-reward ratio (400 vs. 800)

Day Ahead

US durable goods, jobless claims, University of Michigan confidence index, and Chicago PMI are set for release on Wednesday. With Thanksgiving looms large on Thursday, the US markets may be thin, which may translate to Asian markets as well. Iran impact seems to be very much limited in the short-term. JCI may see rebound over a steep fall on Tuesday.

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