The January effect will end soon, be careful with the JCI correction

ILLUSTRATION. JCI has the potential for correction until next month.

Reporter: The first is blessed | Editor: Wahyu T. Rahmawati

KONTAN.CO.ID – JAKARTA. Composite Stock Price Index (IHSG) weakened 1.66% to the level of 6,307.13 in Friday trading (22/1). This significant decline caused the JCI to only slightly increase by 0.02% when calculated since the beginning of the year.

As for the highest level of JCI this year, reaching 6,504.99. Kanaka Research Senior Vice President Hita Solvera Janson Nasrial said that this level had reached its highest level since March 2020. However, to reach a new high still depends on the rupiah’s performance as an anchor for the Indonesian economy. “The correlation is very strong against return on equity (ROE), profit margin and purchasing power consumers, “said Janson, Friday (22/1).

As for this first month, Janson said January effect will move the IHSG on resistance 6,500-6.550. Historically, January effect pushing JCI to go green over the past 10 years and producing corrections in the following months.

Thus, in February 2021 the JCI is also predicted to be corrected. “It looks like (February) the correction is rather deep due to the valuation that is not make sense, “added Janson.

Also Read: JCI fell 1.66% on Friday (22/1), BUMN shares were the top losers of LQ45

This can be seen in the fourth quarter of 2020, the financial statements are not good quarterly because they tend to be flat. As well as the real sector still lagging on the valuation of the JCI and government debt securities. Indicator lagging This is still evident from sluggish retail sales and declining credit growth for three consecutive months.

That way, Janson recommends investors to stick to defensive stocks, especially consumer stocks. Because when the JCI weakens, this sector will hold its decline.

The recommended shares such as PT Unilever Indonesia Tbk (UNVR) buy on weakness at Rp 7,200 with a target price of Rp 9,000, and buy on weakness PT Indofood CBP Sukses Makmur Tbk (ICBP) IDR 9,200 with a target price of IDR 11,000 per share. Then buy on weakness shares of PT Kalbe Farma Tbk (KLBF) at a price of IDR 1,580 with a target price of IDR 1,900 per share.

Also Read: This is the direction of the JCI movement towards the end of January 2021