Morning Dew - 20 January 2014

In A Standstill

Stocks ended flat on Friday as lack of fresh catalysts put the market in a standstill.

Agriculture (-1.05%), misc. industry (-4.08%) and manufacturing (-1.07%) sectors were down at the end of the day.

IDR ended flat at 12,127 per US$.

TALF re-entered the IDX on Friday. The stock was previously delisted in 2009. Starting at IDR400, the stock finished at IDR411 at the end of the day. TALF which operates in packaging industry, was established in 1977.

Confidence Slipped

Confidence slipped in January in the US, according to the preliminary data from University of Michigan. The reading (80.4) was both less than consensus (83.5) and the December reading (82.5).

Elsewhere, industrial production slowed to 0.3% after it registered a 1% increase in November.

Housing starts fell in December by 9.8% after a strong gains of 23.1% in November. Building permits continued to slip in December, falling by 3% after 2.1% decline a month earlier.

Technically Speaking...

JCI finished flat on Friday. The index recently had hit the high at 4,459 and bumped into the 200-day EMA. 

Both RSI and stochastics indicators remained around the overbought area, but volume has been slipping a bit, indicating the recent weakness might have been some temporary correction. MACD held its position above the zero line despite it stalled at the moment. 

Near-term, resistance lies at 4,459, while next resistance area lies around 4,600-4,610. Fibonacci projection targets 4,700, however. On the downside, support lies at 4,400 and subsequently, 4,327 - a prior resistance now turned into support. Below 4,327 we also have support at 4,175 and 4,109.

Week Ahead

While JCI took a breather, the upside potential remains intact for now. The index is expected to knock on the 4,600-4,610 resistance area where its bullish commitment will be tested. Should it pass, 4,700 awaits. Below 4,400 may drive the index approaching the lower 4,300 support area.

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