JCI tends to be under pressure in early November

ILLUSTRATION. The screen displays the movement of stock trading at the Indonesia Stock Exchange building, Jakarta. BETWEEN PHOTOS / Hafidz Mubarak A / wsj.

Reporter: Kenia Intan | Editor: Herlina Kartika Dewi

KONTAN.CO.ID – JAKARTA. The Composite Stock Price Index (IHSG) rose 5.30% throughout October 2020. At the close of trading on Tuesday (27/10), the JCI was at the level of 5,128.23. However, the strengthening of the JCI is not expected to continue in early November 2020.

CEO of Sucor Sekuritas Indonesia Bernadus Wijaya explained, JCI will tend to be under pressure with the closest support at the level of 5,000 in early November 2020. If the JCI exceeds this level, the JCI will test the next support at 4,800.

The decline in the JCI was due to the uncertainty of the general election (election) for the US president which will be held on November 3, 2020.

Furthermore, Bernadus explained, if Joe Bidden was elected, the US election results would be the ballast sentiment for the market. His pro-lockdown policy and increased corporate tax tended to generate short-term negative sentiment.

Meanwhile, reflecting on the 2016 US election, the JCI was immediately corrected by more than 4%. At that time, Donald Trump was elected President of the US, even though the market wanted Hillary Clinton more.

Also Read: On Monday (2/11), the JCI has the potential to be corrected, pay attention to the following sentiments

Seeing this condition, investors are advised wait and see first until the election results appear. However, investors who are interested in banking sector shares can buy installments in stages at each point in the fibonacci retracement-nya.

In addition to the US election, the week of early November will also be exacerbated by the extraordinary increase in Covid-19 cases in the United States (US) so that the Dow Jones fell nearly 6% in three trading days from 26 to 28 October 2020. This decline was triggered by fears of a lockdown which can hinder economic growth.

As for domestic sentiment, investors are still waiting for the official results for the third quarter of 2020 GDP. Just so you know, the consensus result is at 2%.

“JCI will tend to be depressed in the first two weeks of November. It is likely to experience a slight strengthening in the third and fourth weeks. With the JCI range in November 2020 it will be between 4,750 and 5,150,” he explained to Kontan.co.id, Thursday (29 / 10).

Although recommended wait and see first, Bernadus sees some stocks as still attractive in this November. For example, the Crude Palm Oil (CPO) sector because on November 14, 2020 there will be Diwali.

At this momentum, the demand for CPO tends to increase, especially from India and ethnic Indians. This momentum can raise the price of CPO, therefore share issuers such as LSIP and AALI are also interesting to collect.

On the other hand, investors can keep a close watch on the consumer goods sector. In the midst of the Covid-19 pandemic, people tend to move from home so that they can raise sales of consumer goods issuers. Some were suggested, such as ICBP or INDF holding company. As of the third quarter, it is predicted that year on year results will show good improvement compared to other consumer goods issuers.