The Jakarta Composite Index (IHSG) of the Indonesia Stock Exchange continued to set new all-time highs throughout 2018. On Friday, January 19th, the IHSG closed at 6,490, up 2.13% from its year-end position. On Monday, January 22nd, the Jakarta stock index even broke the 6,500 level for the first time in history.
According to Bloomberg data, based on the 14-day Relative Strength Index (RSI) technical indicator, the IHSG is at 76.8 on a scale of 0-100. An RSI above 70 indicates that the IHSG is vulnerable to short-term corrections as it is in overbought territory. However, the long-term (200-day RSI) index remains normal at 58.7, suggesting further upside potential.
Using the 200-day Pivot Point technical indicator, the index still has the potential to strengthen to 6,739. If this level is surpassed, the IHSG has the potential to rise further to 7,124. However, if a correction occurs, the IHSG could fall to 5,599. Failure to hold this level could lead to a further decline to 4,844.