The JCI managed to increase significantly at the beginning of the month, as well as ending the three-day decline. The jump was supported by big caps shares and marked by the easing of foreign sell action. For today, JCI will try to continue the rally, and test the psychological level at 5,000.
The fall in the JCI over the past 3 days contributed to the decline of the stock market by 7 percent throughout September 2020. Entering October, the JCI movement will still move with a tendency to drop. Investors will focus on the release of the Inflation and Manufacturing PMI data scheduled for today.
From the domestic market, the debate on the US presidential candidates will also be the main focus of investors who have the potential to determine the direction of the JCI today. From a technical perspective, JCI has the opportunity to test the support level at 4,820 as long as it is in a downward trend. However, smaller foreign net sells accompanied by oversold signals still provide opportunities for a reversal.
Domestically, JCI movement is still suppressed by depreciation of Rupiah that almost reached IDR15,000/USD. As for today, JCI movement will still be consolidated with the opportunity to slightly increase after entering the oversold zone.
Covid-19 new cases which keep increasing and the speculation of recession in quarter III are negative sentiments for the JCI. Meanwhile, foreign investors continued net sell in the past week.
Throughout the past week, JCI recorded weekly decline of 2.24% with the Misc Industry being the only one increasing. As for the JCI movement today, it will be influenced by domestic economic data releases such as the monthly inflation and Manufacturing PMI.
Today’s JCI movement will try to stay above the support level of 4,800, since it is in a downward trend that has occurred since early September. Investors will weigh the effects of a strict PSBB extension in Jakarta until 11 October 2020.
The fall on Wall Street will further aggravate JCI steps amid economic recession sentiment. Technically, there has been a reversal signal from the current position in the lower bollinger band area and the RSI level entering the oversold area with less foreign net sell. However, investors will continue to be aware of the persistence of various negative sentiments on the JCI.
The JCI movement continued the downward trend amid rampant negative sentiments and prediction of contracted Q3/2020 growth. But with the global market rebound and index movement to the oversold area, the JCI today has the opportunity to experience technical rebound.
