This website had been offline for very long time because I cannot maintain it, but finally I can manage the host and also domain. Today I want to talk about IHSG, the projection also what we can expect. First of all, before we look at IHSG chart, there are several fundamental issues we can take a look into and consider what is the major view of the market.

Several things to note:

1. Interest rate for October was unchanged at 7.25%, October inflation was 8.4% Versus expected 8.57%. Improvement in economic condition help BI to keep interest rate unchanged, I believe this situation is temporary, market expect another increase of rate around 50 pts. I personally think rate increase won’t help economy to recover, rupiah may go up but expensive money discourage business to apply for loan and will slow expansion. Increase in BI rate won’t be good, weaker rupiah is good I think because this discourage import and people will think about local consumption.

2. Shut down in US government, big issue yet nothing to be afraid of. Reading around the internet, US need to repay or refinance their debt, total debt matured between 30 October – 15 November around $6 billion said congressman Tim Huelskamp. Debt ceiling probably will be raised, US can’t afford to default, surely China and Japan won’t sit idly because both of them are major holder of US debt.

3. Unemployment rate currently at 5.9%, looking at chart below, we can see improvement in labor market and I think this government have been doing good job.

4. Everybody knew about tapering that is going to happen I think, currently Pres Obama nominated Janet Yellen to hold position of Fed governor, replacing Ben Bernanke. Market favor Yellen to delay tapering until next year. I don’t think tapering will be delayed, but in market anything can happen.

Now here is IHSG chart

Discussing about technical analysis, IHSG weekly bounced from demand level around 3800 – 3900 and currently hanging at supply level 4500 – 4700+. This is second time IHSG test supply level, I believe with good news from local market, market participant is waiting for other news from worldwide. Buying at supply prove to be risky, IHSG still can go up, but waiting it reach demand level might be wiser.

Today I bought position at ADHI, CTRA, and SMCB base on calculation I made and the shares price at good level, if market decided to go down at this level, then I will exit because all of this are short term positions.