JCI has the potential to strengthen further, backed by various market drivers, although short-term correction risks remain.

JAKARTA – A range of positive sentiments from both global and domestic markets could potentially support the performance of the Jakarta Composite Index (JCI) during Tuesday's trading (20/5).

Analysts from CGS International Sekuritas Indonesia (CGSI) noted that the rally in major Wall Street indices and commodities at the start of the week would serve as a tailwind for Indonesia’s equity market.

Domestically, corporate actions such as share buybacks and continued foreign investor inflows are also contributing to bullish sentiment for JCI.

“JCI is projected to continue its upward movement, with support levels at 7,080/7,020 and resistance at 7,205/7,265,” CGSI analysts wrote in today’s research note.

Meanwhile, analysts from BRI Danareksa Sekuritas see a potential test of the 200-day Moving Average (MA) as the next resistance level, which currently lies at 7,145.

“If it can break through that level, a continued rally towards the next resistance at 7,270 is possible,” said analysts at BRI Danareksa Sekuritas.

On the other hand, Ratna Lim, an analyst at Phintraco Sekuritas, pointed to the decline in composite indices across Asia on Monday, although JCI still closed up by 0.49%.

However, the Stochastic indicator on JCI chart, Lim said, has entered overbought territory.

“Therefore, JCI may be poised for a short-term correction, testing the 7,080 level,” Lim noted in her latest research. (KR/ZH)