Morning Dew - 7 August 2014

Hit by Macro

JCI continued to fall on Wednesday after a slew of economic data released earlier this week showed the economy slowed down in 2Q14 while trade balance swung back into red.

Consumer confidence index was higher in July, up from 116.3 a month earlier to 119.8, according to a survey conducted by Bank Indonesia. In addition, the survey indicates that inflation pressure will lessen in the next three months as well as within the next six months. The main driver of the timid inflationary pressure is expected to be more evident in the clothing and food categories.

The first court session commenced on Wednesday over the election dispute. Despite the drama, it is likely that the election result from KPU will not change and that Jokowi-JK will be the next President-VP for 2014-2019.

USDIDR inched higher to end at 11,756 per US$ from 11,733 per US$ on Wednesday.

Global Data

Jobless claims are set to be released on Thursday, with the consensus sees the weekly claims were up 2k from 302k a week earlier.

The next big thing on the overseas macro front will be the release of China trade balance next Friday. July trade balance is seen down to US$26b from US$31.56b even on the back of accelerating exports (7.5% from 7.2%) and slowing imports (3% from 5.5%).

Technically Speaking...

JCI slipped below the 5,100 mark on Wednesday as the index seems to be once more caught in a consolidation mode between 5,165 and 5,050.

The next resistance lies at 5,165, the recent intraday high. Beyond this the index will aim at 5,251 – the all-time high seen last year.

Near-term supports are seen at 5,039 and 5,000, followed by 4,950, the former EMA-50 resistance now turned as support. 

MACD has now crossed the zero line and returned to negative, while RSI has also continued to slip below the overbought area despite declining volume.

ADRO, SMRA and WSKT recos are still awaiting their entry prices to be filled. Please check the details on the table below.

Day Ahead

Election appeal to the Court, the next cabinet and the tremor from recent slew of economic data such as inflation, GDP and trade deficit will remain as catalysts in the play. US stock indexes were stable overnight and this should lessen the pressure expected on Thursday. 

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