Equity and Forex Daily Analysis by Reza Priyambada, Head of Research NHKSI
Ending last week, after the last few days of moving to the movement of the stock market anomalies outside, JCI closed lower following the other global stock markets were in the red zone. Exchange rate of Wall Street who returned languishing in the red zone as fears of a slow recovery which resulted in curbing the benchmark rate which may affect bank performance negatively affect the JCI. Not only that, again weakening crude oil prices has affected negatively on the pace of global stock markets, including JCI. The correction that occurred in the trading of foreign considered reasonable given the still recorded a net buy and do some rebalancing portfolios that make the market was fluctuating. Market participants should not have to worry about and precisely with these conditions should be utilized to market participants in view of the accumulated foreign net buy.
Previous conveyed Back correction in global stock markets as well as the volatility of JCI, JCI assumed makes us able to have strengthened limited to the occasional accompaniment of profit-taking when the sentiment that there will not be conducive so that it can be used to continue the selloff. The position of JCI in overbought area can make JCI prone to re-testing support. Fixed look sentiments ..
Throughout the JCI movement, decreased foreign buying coupled with a return rate of Rupiah weakening. Stranger still recorded purchases (net buy of 878.35 meters to a net buy of Rp 24.26b).
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The rate of USD to rise further against the rupiah after returning induced weakening pace of global crude oil prices. From the data we collect, Oil WTI had dropped to US$26.13 a barrel in intraday trading or below record lows since May 2003 year, $26.19 recorded in January. However, the rate of decline in WTI prices began to decline towards the end of trading in which only fell 1.24% to $27.11 a barrel on the New York commodity exchange. Against other currencies, the rate of USD looks to strengthen a.l EUR, AUD, JPY, CHF and some other so as to provide a negative impact on the rate of rupees.
Previous conveyed Having managed to break the trend weaken, the strengthening of the rupiah occurred also on speculation foreign funds will flow back into the financial markets in both the bond and equities sector as Indonesia’s economy looks much improved. Still the impact of labeling Investment grade by rating agencies and the Fed’s comments defending the rupiah in the green zone. Support and Resistance 13 350 13,500 Rupiah. Fixed look sentiments on the rate of the rupiah.
Post Rupiah rate increases, has now begun to turn lower as the impact of the increase in the rate of USD. Although we expect an increase or permbalikan directions strengthened however, estimated the rate of the rupiah could continue pelemahannya if no positive sentiment is enough to give impetus to the strengthening of the rupiah rate. Moreover, if the release of economic data earlier in the week was not so good then it would need to be aware of potential weakening Rupiah proceed. Support Rupiah 13,500 and 13,400 resistance. Fixed look sentiments on the rate of the rupiah.
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Ending last week, Asian stock markets are still under pressure. After South Korea’s benchmark stock index is stopped forcibly due to a sharp fall in one day, the Nikkei index did not differ much fate which closed -4.84%. Still simmering geopolitical relationship between North Korea and South Korea make the market hit by uncertainties, which lead to a high risk to invest in Korea, so the selling pressure from market players was unavoidable. Then, still strengthening yen against the dollar in recent days is still a negative catalyst for Japan’s economy in view of the weakening is it more difficult for Japan to boost its economic growth, export sales amid relatively stagnant. Not to mention China’s central bank plans to improve the rate of exports from the monetary side with some discretion does not seem strong enough to bring the pace of Asian stock markets rose.
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In Europe, after the corrected enough in the trade last Thursday, the rate of any European stock market moves following the rebound in world oil prices are volatile and tend to be higher on Friday. After being hit by negative sentiment from the Central Bank of Sweden, the strengthening of European bourses also a response market participants to the release of the financial statements of Commerzbank that the profit of € 187 million, up 12% in the 4th quarter where the cost of provision that fell caused profits at the bank is quite significant, increase in the profit in line with consensus expectations. These sentiments led to pressure on the buying bank shares in Europe where offset by increased Stoxx 600 Banks Index by 2.6%.
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Responding to statements related Yallen Janet is still room for the central bank to raise interest rates this year seems to make the exchange rate of the Wall Street tend varied. Market participants assume for the moment, hit-and-run in the short term is the best for now. Her rally in oil prices is still going to be the key to restoring the sentiment in the equity market. Financial stocks, commodities and the like, and a few others have rebounded in line with renewed strength in oil prices and the consequent strengthening of the weekend banking stocks in Europe.
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In trading on Monday (15/2) Support 4683-4691. Resistance is 4773-4775. Longblack after White candlestick Bearish candlestick Indicating dark cloud cover. Price has closed above its MA200 day line, price still maintain the area above the middle Bollinger Band (MBB). MACD histogram started limited by positive shorter. RSI, Stochastic, and William’s% R turned down. The rate of thin JCI under the target area of support 4720-4750 and have not been able to approach the target of our resistance in 4785-4800.
Although weakened thin where volume buying is still trying to hold the weakening however, sell still more. If at the beginning of the week, especially with the release of global data is not very good response rate of JCI berotensi then resumed pelemahannya. Fixed look sentiments.
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Consideration shares :
WTON 985-1030 | Long white candlestick candlestick after spinning Indicating bullish continuation. MACD indicator is going to form a golden cross. Price crossed above the middle Bollinger line or MA20 day line. | Trd buy slm stay above 985. SL 980
MAIN 1320-1385 | Morning doji star candlestick after spinning Indicating bullish reversal. MA100 day line is going to cross MA200 day line forming a golden cross. Price is maintaining its position above the middle Bollinger line. | Trd buy slm hold above 1320. SL 1310
MDLN 361-375 | Three consecutive long-shadowed spinning Indicating bullish reversal candlestick. Stochastic and Williams% R indicators are showing bearish divergence Indicating bearish reduced power. | Trd buy slm stay above 361. SL 359
LSIP 1470-1550 | Longwhite candlestick after longblack shadowed Indicating bullish reversal candlestick. MA5 has crossed line MA200 day. Price maintain its middle Bollinger band area. | Trd buy slm hold above 1450. SL 1440
AALI 16325-17450 | White Indicating bullish engulfing candlestick possibility. Price has closed above its MA5 day line. Price maintain its middle Bollinger band area. | Trd buy slm stay above 16325. 16300 SL
NRCA 600-645 | Longwhite Indicating inverted hammer candlestick after a bullish breakaway. Price has closed above its MA20 day line. Price maintain its middle Bollinger band area. | Trd buy slm stay above 600. SL 590
CTRA 1300-1400 | Shooting star close to the upper Bollinger band (UBB). Parabollic SAR try to up reversal Followed by the Increase of RoC | Trd buy slm hold above 1330. SL 1325
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Equity and Forex Weekly Analysis
The impact concerns the slow global recovery, the pace of JCI depressed
Started trading at the beginning of last week after the Lunar New Year holiday, JCI tends to move lower. JCI weakening is induced sell-off due to an increase of 4.5% the previous JCI in just 3 days so that the state makes traders to profit-taking. In addition to profit taking, slowdown is a result of consequence happened to the Japanese market corrected enough in about 5% so that the state helped to make JCI depressed. Then, the trend of world crude oil prices weakened again contributed pressing JCI. Could be in the positive zone, JCI continued pelemahannya. Market participants apparently still reluctant to take action to buy her remember CSPI try testing support in the area 4700. On the one hand, foreign investors are still visible action with a thin net sell considered reasonable correction.
Being opened in the negative zone, JCI able to turn towards strengthening trade ahead of the weekend. Market participants look began to take action to buy it so as to make JCI rebounded, supported by the strengthening of the rupiah as the impact of Yellen’s speech is not willing to change cuannya interest rates in the near future. Re-entry of foreign funds in shares of big cap made increasingly attractive trading and optimism for investors in oil prices had not moved from the trend weaken and stock markets of Asia, Europe and America are still covered by the selling pressure by traders. JCI was able to move anomaly. Ending last week, after the last few days of moving to the movement of the stock market anomalies outside, JCI closed lower following the other global stock markets were in the red zone. Back weakening crude oil prices has affected negatively on the pace of global stock markets, including JCI.
Previous conveyed After JCI penetrate MA200 in the last week, we still hope that JCI will move tend to strengthen even though on the other hand we also need to be aware of the potential profit-taking that makes the rate of JCI Reversible weakened. Technically, JCI managed to break 4700 area so that the area is used as a point of support at this week before it hits the target area of our support. China shares her off for 1 week to make the sentiment that can affect JCI slightly reduced however, still look sentiments that may affect the JCI.
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The fallout from the speech of the Fed, lifting the rate of rupiah strengthened throughout last week. After the USD weakened against the currencies of developing countries a few days ago, is now back in the strengthening of the USD currency movements envelop the world. The weakening of emerging market currencies in addition to new anxieties sparked by the perceived market participants about the health of the global economy but, also due to profit-taking traders.
Not to mention the price of crude oil fell back so had a stronger impact on the rate of USD against emerging market currencies, including the rupiah. The strengthening of the rupiah against the US dollar gives hope for the amount to be able to continue strengthening in the short term.
The rupiah was at 13.400an or the strongest since the last three months despite back down slightly so it can break the trend likely weaken. On the one hand, began his rebounding oil prices make the market optimistic about further strengthening both the strengthening of world oil prices and commodity-based currencies such as the Indonesian rupiah. Had been in the area Rp 13.600an however, able to re turn higher level approaching 13,400 so as to make the rate of the rupiah trading ahead of the weekend began limited. Trends in world oil prices still continue pelemahannya helped push the rate of the rupiah against the USD despite the number of other currencies al EUR, CHF, CNY and JPY, the rate of USD looks likely to weaken affected by the result of the testimony of the Fed is not planning to change its base rate in the near future this.
In addition, the strengthening of the rupiah could be used by market players to hit and run so as profit-taking ensued. On weekends, the rate of USD to rise further against the rupiah after returning induced weakening pace of global crude oil prices.
The rate of the rupiah during the week slightly higher yesterday. The rate of Rupiah able to exceed the target of Rp resistance area. 13,685. Rp 13800-13420 (BI middle rate).
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The rate of Asian stock markets continue weakening throughout the weekend
Shanghai index closing of the week-long Lunar New Year holiday as make the focus of market participants focused on the Japanese stock market. Nikkei index fall of around 5% re-create hit by fears of market participants. Market participants are worried about slower economic growth, lower oil prices, as well as the negative interest rate policy. Moreover, it strengthened the Yen against the USD at record highs in the past year make the market worried about the chance of slowing export growth and less competitive in the competition so as to reduce the benefits.
As a result, in addition to the Japanese stock market fell, Japanese government bond yield again reached its lowest level. The release of oil reserves increased US managed to make world oil prices lifted in the short term. However, the reinforcement has not been able to withstand the weakening trend of the Asian stock markets are still triggered worries about the health of the banking sector this year. Attention was focused on weakening back Nikkei index to its lowest level since October 2014. Then, market participants look not want to risk so did selling action considering trading the Nikkei index on Thursday closed for a national holiday.
The rate of Asian stock markets are still seen languishing where they are in the red zone, continuing a trend pelemahannya. There are still concerns about the health of the global economy has not yet recovered and returned to its heated geopolitical tensions between North Korea and South Korea seem to allow market participants again hit by anxiety. Then, other market players are still focusing on the health of the financial markets in Asia
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Although time is up, the rate of European stock markets weakened during the last week
Meanwhile, European stock markets still continued weakening pelemahannya as banking stocks and dragged other financial shares. Market participants are now focused on the payment of the bonds in several European countries since many nations will mature this year as Spain, Portugal, and Italy. Insurance costs of bank debt against default risk also experienced the highest increase since 2013.
The cost of borrowing in Spain, Portugal, and Italy jumped as investors demanded a risk premium over the yield on Germany paper, where bonds that have a remaining maturity of 2 years to a record low. Exchange rate of European stocks had gained after some European companies posted good earnings and their associated signals takeover of companies responded positively by market participants. After moving varied in earlier trading, European stocks way back in negative territory as selling continued happens.
The decreasing of the European stock exchanges is the highest attenuation in the last 2 years where the weakening is led by the banking and mining sectors. Specialized in the banking sector, the weakening is due after the European Banking net income on average a net profit of thin under consensus expectations. Application of negative interest rates is one of the reasons accounting profits were thin which may cause pressure on the company’s ability to increase profits through lending.
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The pace of US stock market is still listed weakened during the week yesterday
The rate of the Wall Street stock market was back in negative territory. Investors worried about the health of banks and energy companies, and then coupled with uncertainty about the potential for a rate hike in March given the unemployment rate back recorded a record low level of 4.9%. The rate of the Wall Street stock market looks still continue pelemahannya although tends to be limited.
Initially seen investors will pay attention to Janet Yellen’s testimony is expected to provide some idea related to monetary policy. However, after the testimony of the Fed is making market participants to sell. Market participants seemed lost mood with a speech by the Fed which still does not give direction in which the monetary policy of the Fed not provide certainty next Fed rate hike as the US and global economic conditions are still recovering. Exchange rate of the Wall Street back languishing in the red zone as fears of a slow recovery that led to suppressed interest rates.
Traders fear of cuts could affect bank performance. The fallout from Janet Yellen response statement on the opportunities rising interest rates gradually make the market volatile. On the other hand, commodity-related shocks and the uncertainty of economic growth in China could change the direction of central bank policy at any time. Then, on some probability of the Fed implementing negative interest rates is actually small, given the Fed has not been considered to cut interest rate in the near future as the release of US economic data is still mixed. Financial stocks, commodities and the like, and a few others have rebounded in line with renewed strength in oil prices and the consequent strengthening of the weekend banking stocks in Europe.
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In trading on the next week, JCI is expected to be in the range of support 4675-4690 and 4765-4795 resistance. Bearish Harami in the area of the upper Bollinger band (UBB). MACD last rose ever so slightly with a positive histogram shorter. RSI, Stochastic, and William’s% R began to turn down. JCI below the target rate of support (4525-4664) and has not been able to exceed the target area resistance (4815-4844).
After JCI MA200 able to survive in the area last week, we estimate JCI will move tend testing its support with the possibility of weakening given the many pressures from global market against JCI. By Foreign Flow, if JCI break area of 4700 but with the action of foreign net buy the opportunities that may be an entry point due to JCI just get a negative catalyst from the outside is not domestic. Although at the weekend, the pace of global stock markets were able to turn positive however, still look sentiments that may affect the JCI. Especially from the outside, economic data will be released and the RDG Bank Indonesia.
Observe :
JSMR 5750-7000 | Trd buy slm hold above 6100. SL 6075
BBNI 5175-5700 | Trd sell if 5200 fails to hold
ASII 6.400-7300 | Trd buy slm hold above 6775. SL 6700
INAF 260-330 | Trd sell if 295 fails to hold
PWON 447-485 | Trd buy slm stay above 458. The SL 455
BEST 192-234 | Trd buy slm stay above 215. SL 212
PGAS 2400-2535 | Trd buy slm hold above 2460. SL 2450
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Economic data this week :
Indonesia: (15/2) Balance of trade, imports, exports, car sales, loan growth; (18/2) facility Lending rate, interest rate decision
China: (15/2) Balance of trade, exports, imports, New yuan loans, FDI; (18/2) Inflation rate
Australia: (16/2) RBA Meeting’s Minutes; (18/2) Westpac leading index, unemployment rate, participation rate
Japan: (15/2) Industrial production index of tertiary industry; (17/2) Machinery orders; (18/2) Balance of trade, exports, imports
South Korea’s (16/2) Interest rate decision, Unemployment rate; (17/2) PPI, unemployment rate
Germany (16/2) ZWE economic sentiment index
France: (18/2) Inflation rate
Spain: -
England (16/2) Inflation rate, retail price index; (17/2) Claimant count change, unemployment rate
Italy (15/2) Inflation rate; (16/2) Balance of trade
Euro Zone: (15/2) Balance of trade; (16/2) ZWE economic sentiment index; (17/2) ECB non-monetary policy meeting, construction output; (18/2) Current account
US: (16/2) Redbook, NAHB Housing market index; (17/2) MBA mortgage applicatons, building permits, housing starts, NY empire state manufacturing index, manufacturing production, industrial production; (18/2) Philadelphia Fed manufacturing index, CB leading index, Initial jobless claims