Morning Dew - 21 April 2014

Another Earnings Season

JCI ended the week up by 0.49%, closing in to the 4,900 mark.

Yellen’s statement has provided support for global stocks, including the domestic stocks.

As the presidential election nears, the political dynamics are expected to gain intensity and are likely to swing the market mood.

Just as the financial reporting of 2013 performance has just passed, the financial updates for 1Q14 are starting to pour in in the coming week. AALI and BDMN have reported their results and more are expected to report as well.

From the US, initial jobless claims were up by 2k in the most recent week to 304k, but better than the expected claims of 315k. Meanwhile, Philly Fed Index was reportedly up from 9.0 to 16.6, exceeding expectation of a rise to 10.0.

USDIDR fell on Thursday to 11,418 from 11,438.

AALI & BDMN

AALI reported a 36.8% jump in revenues in 1Q14 from 1Q13. The jump led to a 122.72% increase in its net profit to IDR764,562 million while its assets and liabilities were up 8.11% and 9.01%, respectively.

BDMN’s net interest income were up 2.73%, but the net profit fell 13% to IDR1,005,303 million in 1Q14 against 1Q13. Assets and liabilities were up slightly by 0.91% and 0.52%.

Technically Speaking...

While the JCI ended the holiday-shortened week just below 4,900, the technical outlook remains uncertain.

Failure to follow-through its recent gains has formed yet another potentially bearish star pattern on the daily JCI chart, a traditionally sign of trouble. 

The nearest resistance is seen at 4,933, the recent intraday high ahead of 5,000 which is the psychological resistance and subsequently the projection target at 5,063.

Key support lies at 4,661 which corresponds to the 50-day EMA curve.

Volume slipped on Thursday, but the MACD continued to climb to above the zero line while the RSI curve has flattened.

Week Ahead

Politics will remain the key catalyst in the week ahead as the political landscape will determine who will win the upcoming presidential election in July. Recent speech by Janet Yellen is expected to continue lending its support but China and Ukraine could limit the upside potential for now. More 1Q14 reports will be out next week, putting emphasis on individual moves instead of general direction.

Click here to download the full update (PDF)