In the last few days, the JCI has gained significantly. Since the breakthrough of the ascending triangle pattern it has gained about 4%. The yield to date per today close is 5.61%.
If you look at the chart, you could see that JCI has a very good volume that confirmed the bullishness. I also notice that some foreign brokers are still accumulating Indonesian blue chip stocks.
(Source: Dongsuh Securities, edited. Click to enlarge)
While in the medium and long term I am still positively bullish on the market, it would be wise to take some profit in the near term. I am afraid that traders would take some significant profit in the coming days, based on the technical chart. If you see the ascending triangle pattern, the highest level might has been reached according to the tip of the point in the triangle. That’s the common rule in triangle pattern.
I also noted that there is a 50% chance that the JCI would form a “double top” pattern which is usually a bearish sign for traders. If it is the case, JCI could retrace to 2600 level. Hence, I think it would be wise to take some profit. Personally, I set 75%-80% as the target equity holding in my portfolio and 20%-25% as cash. If the JCI does retrace, I am expecting the JCI to reach a new high before the first semester of 2010.
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