Stock Market in Indonesia Potential for Gains on Monday
Jakarta Composite Index: Cautiously Upward Trend with Short-Term Resistance
After a modestly higher finish on Friday, the Jakarta Composite Index (JCI) is predicted to open with a cautiously optimistic tone on Monday, August 18, 2025.
Last week, the JCI surpassed its all-time high of 7,910, closing at 7,931.25 on Thursday, August 15, 2025. The index was supported by solid foreign inflows and a strengthening Rupiah.
Technical analysis indicates that the JCI is in a solid uptrend, with an ideal target around 8,000 points. However, the latest closing formed a Shooting Star-like candlestick at resistance, along with negative RSI divergence, which typically signals a potential short-term pullback or consolidation.
Investment advice is to use a trailing stop to protect gains while letting profits run during this uptrend. This strategy aims to secure profits while allowing for further growth, should the market continue to move upwards.
From a broader perspective, global markets are mostly positive, which supports the overall optimistic sentiment for Indonesian equities. The JCI’s predicted annualized return over the coming years is about 9.5% to 9.6%, supported by economic growth, dividend yield, and valuation reversion to the mean.
In summary, the JCI is expected to face short-term resistance, but the overall trend remains upward. Investors are advised to set trailing stops to protect gains while allowing for further growth. The positive market conditions and expected healthy return for Indonesian stocks support the upward bias for the JCI. Therefore, expect the Jakarta Composite Index on Monday to open with a cautiously optimistic tone but with a possibility of volatility or minor pullback given the technical signals.
[1] Technical Analysis of the JCI: Shooting Star and RSI Divergence Signals [2] Protecting Gains with Trailing Stops in a Bull Market [3] Economic Growth, Dividend Yield, and Valuation as Drivers for the JCI [4] The Impact of Foreign Investments on the JCI [5] The Strengthening Rupiah and its Impact on the JCI
- Despite the short-term resistance, the industry analysts forecast the finance sector in Indonesia to maintain a solid upward trend, with the Jakarta Composite Index (JCI) potentially targeting 8,000 points.
- Financial investors should consider adopting a trailing stop strategy in their business dealings with Indonesian equities, as it allows for steady profits while accommodating further market growth, especially in the context of an optimistic global economic climate.
