Morning Dew - 10 July 2013

Key Points

• JCI finished lower again as selling continued on Tuesday. The index approached the crucial support at 4373 as it ended at 4403.80 with foreigners continued to pull out. Combination of negative catalysts have been putting great pressure on domestic stocks recently, ranging from the Federal Reserve monetary policy to domestic monetary as well as fiscal policies. China has been another wildcard as fear of slowdown in the mainland spooks investors.
• Technically speaking, JCI continues to unfold its wave b of B. This complex wave could end anywhere. It can just end at today's low at 4403.80, or it can be around 4373, or even below 4373 should an irregular structure occurs.Upside, resistance come at 4647, followed by 4819. We need to see the index pops back above the latter to confirm that wave c of B is unfolding. Positive Dow overnight hinted a rebound is to commence on Wednesday.
• U.S. monetary policy returns to the central stage this week as the minutes of the fateful FOMC meeting is set for release this midweek while at the same time Fed's boss Ben Bernanke will deliver his speech. On another front, the earnings season is set to start on Tuesday with Alcoa commences with the kickoff. Both macro and corporate factors will run simultaneously this time around.
• Just four recommendations remain on the list, and only BBCA held ground on Tuesday's session. BBRI stayed under pressure, TELE was having a near-death experience and IMAS continued to move back-and-forth between gains and losses. No new recommendations for now as we are still awaiting hints that the current wave b is completed.

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Morning Dew - 9 July 2013

Key Points

• Despite the more-than-expected gains in the number of NFP released last Friday, JCI fell again earlier this week. It fell to as low as 4433, more than the maximum retracement level of the rebound off 4373. This means the index's next support will be the key 4373. If this support is broken we are staring at the potential of the beginning of wave C. Currently, we can still assume that wave B remains in progress. Near-term resistance is seen at 4647.
• Concern over a cut in budget spending by the parliament also hit the sentiment. So far, only around 60% of the proposed budget of 110T rupiahs had been approved. Bank Indonesia's statement during the weekend that it is monitoring the channeling of lending from banks to the property sector to avoid rising nonperforming loan (NPL) among banks.
• U.S. stocks ended up again on Monday, suggesting that the regionals won't see red on Tuesday. Entering the earnings season in the U.S., corporate company reports are seen to be additional catalysts in shaping the market sentiment. This midweek we are also about to see the minutes of the latest FOMC meeting last May. Ben Bernanke is also scheduled to speak this week.
• More exits from the list as RALS, KBLI, BWPT and BMRI got brushed aside on Monday's massive rout. This brings the remaining recommendations to IMAS, TELE, BBCA and BBRI. We will continue to watch the market first before deciding whether to add more recos to the list.

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Morning Dew - 8 July 2013

Key Points

• JCI ended the week down more than 4% as selling pressure continued. Technically, the JCI is unfolding an inverted head-and-shoulders pattern which could be triggered once the neckline around 4760s is broken. More confirmation will be when the resistance at 4818 is broken. Breakout of the neckline could zoom the index up by around 400 points from the breakout point. For now, this is expected to be around the year's high. Still, until then the downside pressure remains as the index stays below the EMA curves, threatening a revisit of 4373 low. Near-term supports come at 4543 and 4478. Positive reaction to the NFP data on Friday signals a potential push upwards next Monday.
• US Nonfarm payrolls maintained its pace at 195k, the same as May, but beating the expectation of 165k. Unemployment rate also stayed at 7.6%, more than what the market had expected. Reaction was positive as the Dow climbed almost 1% along with S&P and NASDAQ indexes which also each edged 1% higher. The figure held that the increase in payrolls were still not enough to prompt the Federal Reserve to end its bond purchases soon.
• BSDE became the latest victim of the rout as the reco ended with an 11.35% losses. Hence, there are 8 recos left on the list. We're still watching the market for now before deciding to add more to the list.

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Morning Dew - 5 July 2013

Key Points

• JCI almost erased its entire gains on Thursday as the index ended slightly up by 0.1%. Lack of positive catalysts made the earlier gains unsustainable despite later on the ECB pledged its stance that it will keep the rates at the low level for an extended period, contrasting the Fed's which have prepped the market for a shift in policy. US markets were closed for Independence Day on Thursday, so any gains on Friday should be relatively limited.
• The technical outlook remains bleak as the index failed to return inside the EMA envelope while the MACD resumed its decline. European boost may keep the downside limited for now, but support is seen at 4543, followed by 4478. Uptick attempts on the other hand, will be capped at around 4818.9 due to lack of guidance from the Street. Above 4818.9 will mean the wave b of B has been completed at 4577 and that wave c of B may aim at 5022/5044 for completion.
• Friday's data will feature the key nonfarm payrolls. US economy is expected to have added 165k jobs in June, slower than 175k added a month earlier. Unemployment rate however, is seen at 7.5%, down from 7.6%. Note that both data came from different set of survey, hence the difference. This week's ADP suggests that the NFP could turn out to be better.

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Morning Dew - 4 July 2013

Key Points

• JCI resumed its fall on Wednesday and it reached 4577, just above the support at 4714. The dip is still considered as a decent pullback and the index is expected to hold above its subsequent support at 4648. The overall fluctuation seems to be ranging from 4500 to 5000 as the market weighs the course of Federal Reserve's policy.
• US data looked promising on Wednesday. The jobless claims were down to 343k during the week as compared to prior week's level of 348k. About 345k was expected. ADP employment report which measures private sector's payrolls was seen to be at 160k, but it turned out to have added some 188k jobs. No data to be expected on Thursday as the US celebrates its independence day.
• Outside U.S., in Egypt the military successfully removed President Mohamed Mursi from presidency. Constitution has been put on ice and a presidential election has been announced. In Portugal, the government is struggling to keep itself intact.

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Morning Dew - 3 July 2013

Key Points

• JCI resumed its fall this Tuesday as it reached 4724, just above the support at 4714. The dip is still considered as a decent pullback and the index is expected to hold above its subsequent support at 4648. The overall fluctuation seems to be ranging from 4500 to 5000 as the market weighs the course of Federal Reserve's policy.
• Despite early gains, the Dow ended the day down as investors stay cautious ahead of the key jobs data set for release on Friday. Earlier, factory orders were reportedly better than expected while Fed's William Dudley said that the Fed may extend the period of its bond purchases if required. The market now will be eyeing the ADP employment data which gauges the numbers of jobs added by the private sector, a good cue before the nonfarm payrolls data.

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Morning Dew - 2 July 2013

Key Points

• JCI suffered a minor setback as the new week opens. The index fell to as low as 4747 before it settled the day at 4777. The fall itself tracked the Dow's decline on Friday. Near-term, the index is expected to remain rangebound between 4500-5000 with the nearest support below 4747 coming in at 4714, followed by 4648.
• U.S. data this week will feature the nonfarm payrolls for June, and a jump in payrolls accompanied by a decline in the unemployment rate is seen as negative as such data will prompt speculation that the Fed will have a case in ending its monetary stimulus sooner rather than expected by the market. Payrolls are expected at 165k in June while unemployment rate is seen at 7.5%.
• US data were positive as the ISM index showed manufacturing sector expanded in June. The index rose from 49 to 50.9, beating the consensus of 50.5. Construction spending also reportedly up 0.5% in May. Positive sentiment from Japan's manufacturing also contributed positively as Tankan index showed a positive result among large manufacturers for the first time in seven quarters.

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