Morning Dew - 8 August 2014

Rates Steady In Europe

JCI bounced on Thursday after being put under pressure earlier. The market sentiment continues to be overshadowed by the recent poor macro data from the domestic side aside from several geopolitical flashpoints abroad.

Recently, a string of data showed that economic growth has slowed in 2Q14, while trade balance swung back into the red. Inflation however, remains contained while consumer confidence was up slightly.

On the political side, the dispute over election result continues on the MK stage, bringing a delay on the finalization of the election result. Still, it is highly unlikely that the result will change.

USDIDR inched higher to end at 11,766 per US$ from 11,756 per US$ on Thursday.

Global Data

Jobless claims was down to 289k from 303k a week earlier, better than the consensus take of 304k. 

In Europe, both Bank of England and European Central Bank have decided to hold the interest rates steady at 0.5% and 0.15%, respectively.

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 bounced on Thursday after being put under pressure earlier. The index briefly touched the low of 5,043.52 but ended higher at 5,067, back above its support at 5,050.

Current 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 bounced somewhat after slipping away for the last few sessions. Volume was stable, however.

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, but with diminishing effect. US stock indexes were back in the red overnight and this could put some pressure on the index on Friday. 

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