JCI Wednesday Diproyeks Test Level 6,700-6.750, Four Stocks Recommended

JAKARTA - The Composite Stock Price Index (JCI) has the potential to test the level of 6,700-6,750 on today's trading, Wednesday, May 13, after yesterday closed down 0.68 percent to 6,858.9.

Phintraco Sekuritas in its research explained that the weakening of the Rupiah at the new lowest level and the anticipation of a reduction in weight by MSCI were negative factors that contributed to the weakening of the JCI.

The increase in SUN's yield with a 10-year tenor of 10 bps at the level of 6.72 percent which is the highest level in the last two weeks is due to the increase in oil prices which increases concerns about the widening of the state budget deficit.

So the rupiah continued to weaken to a record low of Rp17,525 per US dollar. However, the increase in bond yields did not only occur in Indonesia.

In the US, the yield on US government bonds increased in anticipation of inflation data. Meanwhile, in the UK, the yield on UK government bonds rose to the highest level since 2008 due to pressure from the UK Prime Minister to resign from his post.

Meanwhile, the health sector recorded the largest correction (3.51 percent), while the basic materials sector recorded the largest increase (1.85 percent).

"Technically, the JCI has the potential to test the level of 6,700-6,750, but if the JCI stays above that level, it is estimated that a technical rebound may occur, testing the level of 6,900," wrote Phintraco Securities.

Meanwhile, MNC Sekuritas predicts the JCI will be prone to correction to the range of 6,644-6,727, be aware of the gap area which is at 6,538-6,585. The nearest strengthening area of the JCI is at 6,870-6,895.

MNC Securities recommends four stocks for today's trading, namely BBCA, BIRD, ISAT and MINA.