Jakarta, ONENEWS.MY.ID – The Composite Stock Price Index (JCI) briefly fell below 6,600 this morning before ending the first trading session at 6,609,676 or a drop of 52,623 points (-0.79%).
The trading value was at the level of Rp 6.175 trillion, involving 13 billion shares that changed hands 869,000 times. Foreign investors today scored a net buy of Rp 216.02 billion.
The JCI’s correction followed the trend of major Asian bourses, which mostly weakened, where the Australian and Japanese Nikkei indices led the correction with drops of 2.75% and 2.63%, respectively. Only Singapore’s Strait Times index is still strengthening, by 0.52%.
The US central bank (The Fed) is likely to be more aggressive in normalizing its monetary policy this year, causing the stock market to fall. Starting from the US stock exchange (Wall Street) on Wednesday trading local time, and followed by Asian markets today.
However, in the second trading session, the JCI has a chance to rebound and cut its weakness from technical analysis.
The decline in the JCI occurred yesterday due to profit taking, seeing the Stochastic indicator which was previously in the overbought area (overbought) on the 1-hour chart.
With unfavorable fundamental conditions, the slump continued again in session I trading.
The good news is, yesterday’s decline in the JCI made the stochastic, which has now entered the oversold area (oversold).
Graph: JCI 1 Hour
Stochastic is a leading indicator, or an indicator that initiates price movements. When Stochastic reaches the territory overbought (above 80) or oversold (below 20), then the price of an instrument has the opportunity to reverse direction.
In addition, the JCI also formed a Hammer pattern on the 1-hour chart, which is a signal rebound.
Graph: Daily JCI
JCI is now held up by the 50-day moving average (moving average 50/MA 50) on the daily chart, in the range 6600 to 6610. as long as it stays above it, the JCI has a chance to rebound to 6,650.
Meanwhile, if the 50 MA is penetrated, the JCI is at risk of falling to 6,570 to 6,550.
A break below this level risks triggering a sharper decline.
Meanwhile, if it returns above 6,670, the JCI has the opportunity to strengthen to 6,700 to 6,720. The ability to break through these levels will open up the space to break the all-time high.
ONENEWS.MY.ID RESEARCH TEAM