Morning Dew - 30 April 2014

In A Standstill

Held hostage by the political uncertainties, stocks were mixed throughout the session with the JCI eventually inched higher by less than a point to 4,819.68.

The Federal Reserve is holding its two-day policy meeting starting on Tuesday. The FOMC is expected to deliver another stimulus cut by $10 million. Domestic market is likely to respond to the FOMC meeting result on Friday as Thursday will be an off-day for the JCI.

US consumer confidence fell to 82.3 in April after 83.9 seen a month earlier, according to the Conference Board. The reading was below the mediam consensus which is at 83.2

Investors are anxiously await how the political uncertainties will be resolved. Jokowi, the PDI-P presidential candidate, is expected to announce his running mate as soon as this week.

USDIDR tumbled to 11,589 from 11,568 on Tuesday.

ADRO, TAXI

ADRO recorded a record quarterly coal production of 13.99 million tonnes (Mt), up 23% YoY, bringing the realized production closer to the company’s guidance of 54Mt-56Mt for 2014. Sales were up 23% to 13.85Mt.

TAXI saw a rise in revenues to Rp182,012 million from Rp157,940 million seen a year earlier. Net profit (ex non-controlling interest) was up to Rp29,258 million from Rp23,893 million. EPS was higher at Rp13.61 compared to Rp12.39 seen last year.

Technicallly Speaking...

JCI was in a standstill as the index finished at 4,819.68, barely moved from Monday’s closing price.

Developing on the daily chart is the head-and-shoulders pattern with the neckline projected around 4,750 or just above the 50-day EMA. The left shoulder is at 4,903, the head at 4,933 and 4,916 is so far the right shoulder. Volume shows decreasing pattern from the left shoulder to the right one, adding credibility to the pattern.

JCI needs to break through the nearest resistance seen at 4,933 to negate the H&S pattern. Higher, subsequent resistances lie at 5,000 which is the psychological resistance and later the projection target at 5,063.

MACD declined, moving away from the zero line while the RSI curve continued to turn lower as the odds for deeper setback looms large.

Day Ahead

It’s clear that the market awaits how the political situation will develop ahead of the presidential election in July. FDI news has hammered sentiment somehow, but the fallout has been somewhat anticipated from the technical perspective. Earnings reports will flow more intense as we inch closer towards the end of the month.

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