Morning Dew - 14 January 2014

Mining Ban Eased

The government decided that the ore mineral ban law will be implemented as scheduled. While there is an accompanying details on the regulation, these are to be announced later. It is likely that big miners such as Freeport and Newmont will be allowed to continue to ship copper overseas. There are also more than 60 miners that will be allowed to do the same because they have processed their ores.

The relaxation of the law should be seen positive even that this shows how unprepared the government was with the law.

IDR rose slightly against the greenback at 12,197 per US$.

Payrolls Growth Slowed

US nonfarm payrolls gained 74k in December, far less than the expected 197k and well below November’s addition of 241k. Unemployment rate dropped however, from 7% to 6.7% as more people left the labor force.

The less-than-expected reading was seen as positive for US stocks because this will provide argument that the Fed may want to taper off its stimulus slowly instead of aggressively. 

Technically Speaking...

Consolidation continues as the index remains stuck within the consolidation range between 4,100-4,300. 

JCI needs to take on 4,327 convincingly to set up a stronger rally while defending its support area around 4,100.  Slipping below 4,100 may risk another visit towards 4,000 en route to 3,837.  On the upside, another push above 4,327 could revive the index’s chance to return to 4,400.

Diminished volume has started to pick up, albeit slowly; MACD has curled back up and RSI is approaching the overbought area, again.

PGAS is in. Entry at 4,290 and stop set below 4,100 while target set at 4,600. At the end of the day, PGAS finished at 4,435, up 3.38%.

Week Ahead

JCI is seen consolidating further within the confines of 4,100-4,300 trading range on Friday. IDR stays as a negative for the index as the weaker it gets, the higher the odds for another rate hike to stabilize the currency. For global sentiment, the less-than-expected payrolls should dampened the odds that the Fed will move aggressively on its tapering.

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