JCI Weekends Projected to Weaken, Check the Stock Recommendations

JAKARTA - The Composite Stock Price Index (JCI) is projected to weaken in today's trading, Friday, December 19, after yesterday closed down 0.68 percent or 19.149 points to the level of 8,618.195.

Phintraco Sekuritas in its research said the weakening of the JCI was partly due to the rupiah which tended to weaken over the past few days, even though the BI Rate was maintained at 4.75 percent at the BI Governor's Meeting.

The rupiah continued to weaken in the spot market at the level of Rp. 16,723 per US dollar (USD), amid the strengthening of the US dollar index and currencies in Asia which closed variably. In addition, increasing global uncertainty and the lack of strong new positive sentiment also encouraged the index to weaken.

Technically, there was a widening of the negative histogram of MACD and Stochastic RSI again experienced a death cross approaching the oversold area. The JCI closed below the MA5 level, but still remained above the MA20 level.

"So it is estimated that the JCI has the potential to continue weakening and testing the support level at 8,550-8,600," explained Phintraco Securities.

In terms of sentiment, investors will be waiting for the results of the Bank of Japan meeting, which is expected to raise the benchmark interest rate by 25 bps to 0.75 percent, which is the highest level in the last 30 years.

If this forecast is correct, there is a potential to increase stock and currency volatility in global markets due to the possibility of a reversal of investor fund flows in global markets to Japan in the short term.

This is because of investors' strategies to borrow funds from low-interest currencies such as the Japanese yen to be invested in currencies that offer higher interest rates, or known as carry trade.

The increase in Japanese interest rates has the potential to make investors who carry trade close their loan positions, thereby increasing global market volatility as funds flow back to Japan. However, it is estimated that the impact will only be short-term.

For today's trading, a number of stocks are recommended by Phintraco Sekuritas, including PT Bank Mandiri Tbk (BMRI), PT Bank Central Asia Tbk (BBCA), PT Ultrajaya Milk Industry & Trading Company Tbk (ULTJ), PT Mayora Indah Tbk (MYOR), and PT Sinar Eka Selaras Tbk (ERAL).