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Senin, 02 Desember 2013

Morning Dew - 3 December 2013

Early Present

Better-than-expected trade balance for October and marginally higher inflation in November have managed to boost JCI at the start of the week.

BI’s hawkish stance on rates, weakening rupiah, fragile current account position, damages from the most recent fuel hike as well as higher minimum wages and poor debt sales result  have been the negative factors dragging the JCI down recently. Continual improvements of these factors will surely put the index back on track towards 5k mark. 

Rupiah which managed to fall to as low as 12k earlier, bounced back to 11,770. Earlier, BI deputy governor had pointed out that rupiah has fallen below 11,500 per USD. IDR is seen ‘appropriate’ between 11k to 11.5k, according to the deputy governor Mirza Adityaswara.

Inflation and Trade

Annual inflation increased to 8.37% in November, from 8.32% in October. Month-on-month, CPI went up 0.12%, faster than 0.09% a month earlier. Core inflation however,  rose from 4.73% in October to 4.8%.
Indonesia trade balance showed a surplus of $50 million in October, as exports rose 6.87% (month-on-month) and imports rose 1.06%. Against the same period last year, exports were up 2.59%, imports fell 8.9%. Market had initially expected a deficit of $650 million.

Technically Speaking...

Despite a good start this week, JCI is still not out of the woods. The index is still way below the EMA band (4,400-4,490). It could be heading towards the exit, though, as we could see some light up ahead.

Resistance is seen at 4,400 first, followed by 4,490, while on the downside the recent low at 4,202 will provide cushion for the index. 

Indicators have started to form a bullish divergent pattern. MACD is getting closer to cross the zero line at the moment while the RSI has formed a bullish failure swing, which paints a rosy picture for the near-term.
We had added RALS to the reco list yesterday, but it is still awaiting for entry at 1,100.

Day Ahead

Inflation and trade data managed to support the JCI at the start of the week. Still, we need to see more of such data to further reduce the odds of having higher rates. Bank Indonesia will meet again on December 12th. For now,  Tuesday is seen as another positive for the JCI, but we cannot rule out a correctional dip, especially after a strong Monday session.

Diposting oleh di 14.17
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