Morning Dew - 21 March 2014

Party Crasher

Statements coming out of the recent FOMC meeting sent the global stock markets tumbling. The FOMC expected the tapering campaign will be over soon this year, but interest rate is expected to be at 1% by the end of 2015. For 2016, the Fed officials predicted that rate will be at 2.25%. Rate rise will depend on a wide range of data, not just on unemployment rate which tie-in has been considered obsolete.

The Fed’s plan is not a big surprise, actually. Still, the markets across the globe reacted violently as investors book profit over recent gains. Thursday’s positive showing of US stocks signals that the rout may not be prolonged and that Friday will be a recovery day or at least an uneventful day.

JCI took a heavy beating on Thursday as all sectors went red. In addition, Wika Beton set its IPO price at IDR590 while Eka Sari Lorena Transport Tbk. set its offering price between IDR825 – 1,025.

US Data Mixed

US initial jobless claims were at 320k during the week ending March 15th. The figure was higher than prior week, but lower than the consensus 322k.

US existing home sales in February fell 0.4% after deeper fall during the precious month of 5.1%. Market had expected it falling by 0.4%.

Philly Fed index jumped from -6.3 to +9.0 in March. The consensus number was at 3.2

Technically Speaking...

JCI got hammered on Thursday as the index fell beyond 4,700, exposing the next line of defense at 4,665. 

Recent peak-turned-support at 4,665 will be the next line of defense where this level was also the prior resistance-turned-support.

As the index fell, the nearest resistance shifts to 4,802, while the next one is seen at 4,917, ahead of 5,000 which is the psychological resistance and subsequently the projection target at 5,063. 

Volume continued to tick down, as well as MACD and RSI which were also turned lower.

Unfortunately for TAXI, the reco has been closed as it fell below the suggested stop level. The reco incurred 3.46% losses.

Day Ahead

After getting savaged on Thursday, Friday session for JCI is expected to be less eventful as investors will tend to wait in the sidelines for fresh new catalysts. In the mean time, the impact from Yellen’s speech will remain a drag for JCI.

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