Should We buy stocks in the Weakening Sectors?

Indonesian financial market is still fluctuated during 2018. IHSG is corrected for 4.5% and closed in level 6.069,71 (-0.31%) in Wednesday (6/6). From nine sectors, just two sectors: mining and basic industry are still strength 22.42% and 20.16%, respectively.

We believe some weakening sectors still have potential to rebound soon especially in sectors such as consumer goods and infrastructure. The positive signal of inflation gives recovery in purchasing power and good impact in sector of consumer goods.

Then, for infrastructure’s sector will recover faster because government project will be finished in the next year. Several stocks in consumer goods sector have prospect to buy such as INDF, ICBP, and MAPI.

However, we have to consider the fundamental of the stocks when buying it and not all of the stocks of the weakening sectors worth to buy. We have some example such as TLKM, UNVR, and ASII that declining in performance of stock price, but they have good fundamental of the companies.

Moreover, instead of considering the fundamental, we have to add more strategies such as technical analysis and behavioral of investors analysis to take action in the market. For example, we can buy TLKM and UNVR after market correction, but we can just buy it for long-term investment.