A Photo Finish
Despite the drop on Monday, the JCI’s outlook for the rest of the year remains upbeat. The record high is still within reach and there’s hardly a negative catalyst around as the Fed hype trumped most if not all, negative vibes.
Even the USDIDR continues to fall, ending the day at 12,435 after it scored a big jump last week to 12,900. FOMC’s assurance that the Fed is being patient with rates seems to have reversed the flow of the greenback back to IDR, especially with Bank Indonesia will remain vigilant over the impact of recent subsidized fuel price hike towards inflation.
Oil prices will be one of those key factors in 2015 to watch. Monday saw another drop with WTI crude fell 3.17% to $55.32/bbl and Brent crude fell 2.12% to $60.08/bbl. Continuous drop of oil prices will force the Fed to wait for a while before they can justify an interest rate hike, even amidst the improving US jobs market.
Rebuilding the Nation
Infrastructure and construction will be the key driver in the coming year, assuming the President can secure enough money to realize his vision. On the other hand, he must keep his political opponents at bay by keep on working and producing results. Else, he will face political risk which could disrupt the big picture that he envisioned.
Commodities prices remain on the slump, a risk for miners to face in 2015. Higher rates, pricier electricity, and relatively more expensive USD are also challenges faced by the nation in 2015.
The Great Divide
In the end Yellen and Co. managed to deliver the market from getting a big slump as the Fed stated its patience on rates. The coming year is likely to feature the Federal Reserve mostly as their policy will be put under the tight watch by investors. How soon the rates will be raised will be the key theme for 2015. It’s a great divide, considering that Europe and Japan are still gloomy and the door is still open for more stimulus. China’s revival is awaited, but not sure that this can happen soon enough considering Europe is still in a slump.
Technically Speaking...
The doji star has warned of the impending fall and that was exactly what happened on Monday. The JCI dropped to end at 5,125, not severe enough as it remains on track to break through the barrier at 5,262.
However, should the index continues to fall, it will risk returning to the bottom end of the recent consolidation range around 4,900.
We have seen a test of 5,200 resistance, but successful breakout remains elusive. Beyond 5,200, the subsequent resistance will be at 5,251, ahead of the all-time record high at 5,262.
The coming sessions will offer trading range for the JCI, between 5,000 and 5,262, at least for the remainder of the year. This year however, the JCI has been up by almost 1,000 points (last year-end the JCI was at 4,274) and next year, we see the index to journey north, heading towards the uncharted territories with 5,700-6,000 being the target area.
ECII has met its entry price, and the reco is now active.
The daily update will return on January as this is the last one for this year. We wish you all a happy holiday and a better year in 2015!
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