JAKARTA — As May 2026 begins, the classic stock market adage sell in May and go away has reclaimed the spotlight. Amidst fragile global and domestic sentiment, this seasonal phenomenon is casting a shadow over the performance of the Jakarta Composite Index (JCI) or IHSG.
At its core, the sell in May and go away strategy is a seasonal approach suggesting that investors trim their portfolios in May and return to the market toward the end of the year. This idiom stems from historical patterns in various global exchanges, where market performance from May to October tends to lag behind the November to April period. Factors commonly cited for this trend include reduced trading activity, the summer holiday season in developed nations, and a general tendency toward capital outflows.
Market Sentiment and Technical Constraints
Head of Research at RHB Sekuritas, Andrey Wijaya, believes this sentiment carries significant weight this year, driven by mounting external pressures and a market currently mired in consolidation. According to Wijaya, the JCI’s movement remains limited; recent gains have been purely technical in nature and lack the momentum of a robust upward trend. Given the fragility of current market sentiment, volatility is expected to remain elevated in the near term.
He noted that the JCI is currently testing a psychological support level around 7,000. In a more risk-off scenario, the index could fluctuate within a range of 6,800 to 7,300, provided that foreign fund outflows and global uncertainty persist.
Several headwinds continue to weigh on the market, ranging from concerns regarding Morgan Stanley Capital International (MSCI) adjustments that could trigger foreign selling, to external pressures such as the weakening of the rupiah against the US dollar and rising global bond yields. From a technical standpoint, the JCI remains in a corrective phase following previous declines.
Macroeconomic Pressures and Regional Outlook
Muhammad Wafi, Head of Research at KISI Sekuritas, echoes these concerns, noting that the sell in May phenomenon this year is unique. It is not merely a product of seasonal factors but is being amplified by broader macroeconomic conditions. While the period from May to August is historically weak, this year’s pressure is compounded by a strengthening US dollar, geopolitical tensions, and rising oil prices.
Wafi explained that if external pressures continue to mount, the JCI could face a further correction toward the 6,700–6,800 range. However, he remains optimistic that if conditions stabilize, the downside risk will be relatively limited.
Conversely, some positive catalysts may support the market, including the prospect of global and domestic interest rate cuts, more attractive JCI valuations following year-to-date corrections, and the potential for a return of foreign capital.
Navigating Volatility Through Tactical Strategy
Offering a different perspective, Mirae Asset Sekuritas analyst Rully highlighted that the JCI has been one of the worst-performing indices year-to-date, with a correction of approximately 19.6%. This comes after a significant rally throughout 2025 and early 2026, where the index reached a record high of 9,134, fueled by euphoria surrounding major conglomerates and MSCI-related expectations.
Entering May, Rully suggests that while global fragility and unresolved MSCI issues keep volatility high, the market is showing signs of consolidation and potential recovery. He pointed out that the current index levels have fallen far enough from their peak that signs of stabilization are starting to emerge. Despite the difficulty in predicting market direction due to fluctuating global dynamics—such as interest rates and geopolitical conflicts—Rully maintains that the JCI still holds the potential to climb back above the 9,000 level by year-end.
Ultimately, analysts emphasize that sell in May does not necessarily mandate a total exit from the market. A more effective approach is tactical derisking—reducing risk selectively. Investors are advised to remain vigilant for opportunities, particularly by utilizing a buy on weakness strategy for stocks with strong fundamentals and high dividend yields, such as those in the large-cap banking sector. Through disciplined and careful selection, investors can continue to find value despite short-term market volatility.
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Disclaimer: This news article is not intended as a recommendation to buy or sell any stocks. Investment decisions are the sole responsibility of the reader. Bisnis.com is not responsible for any losses or gains arising from the reader’s investment decisions.
Summary
The “sell in May” phenomenon has resurfaced in the Jakarta Composite Index (JCI), driven by a combination of seasonal trends, global economic instability, and capital outflows. Analysts note that the index is currently facing significant pressure from a strengthening US dollar, geopolitical tensions, and ongoing concerns regarding MSCI adjustments. Consequently, the JCI is expected to experience continued volatility, with technical support levels being tested as the market struggles to regain momentum.
Despite these challenges, some experts suggest that the current market correction may present tactical opportunities for investors. Rather than a total exit, market participants are encouraged to practice selective risk reduction and employ a “buy on weakness” strategy for companies with strong fundamentals, such as large-cap banking stocks. While short-term uncertainty persists, there remains cautious optimism that the JCI could recover if global and domestic economic conditions stabilize later this year.
