Monday, November 21, 2011

Market Overview 22nd Nov 2011

 Tuesday, 22nd Nov. The FBM KLCI slide down as weaker than expected performance on the regional stock index yesterday. Market was again spooked by the growing concern over Europe debt crisis development would end up worse. Other news to follow.

"-U.S. stocks sank Monday, pulling the Dow Jones Industrial Average into negative territory for 2011, as the lack of progress by American lawmakers in reaching a deficit-cutting agreement magnified worry that Europe’s debt crisis would spur a global downturn. After falling as much as 342 points, the Dow Jones Industrial Average DJIA -2.11% finished at 11,547.31, losing 248.85 points, or 2.1%, and leaving the index off 0.3% for the year. Extending losses into a fourth consecutive session, the S&P 500 Index SPX -1.87%  fell 22.67 points, or 1.9%, to 1,192.98, with financial companies hit hardest among its 10 major industry sectors. The Nasdaq Composite Index COMP -1.92%  declined 49.36 points, or 1.9%, to 2,523.14."


"-Asian shares lost further ground on Monday, with European and U.S. debt problems once more firmly in focus for the region’s investors. Hong Kong’s Hang Seng Index HK:HSI -1.44%  dropped 1.4%, while the Shanghai Composite index CN:000001 -0.06%  traded down 0.1%. Korea’s Kospi KR:0100 -1.04% fell 1%, while Japan’s Nikkei Stock Average JP:NIK -0.32%  and Australia’s S&P/ASX 200 index AU:XJO -0.34%  each ended down 0.3%.

"-Crude oil futures fell Monday, as a fresh warning from Moody’s Investors Service about France’s credit rating and an expected announcement from the U.S. supercommittee that it has failed to reach a deficit-reduction agreement dulled oil’s prospects. Crude for January delivery CL2F -0.04% , the new front-month contract, lost 75 cents, or 0.8%, to end at $96.92 a barrel on the New York Mercantile Exchange."

"-US soybean futures fell to 13-month lows as the market was caught in the tailwinds of a broad-based risk-off trading environment. Fear of a global economic slowdown amid worries about European sovereign debt and the failure of the US supercommittee to reach agreement on a plan to help reduce the federal deficit encouraged traders to reduce risk exposure. Technical selling accelerated the declines, with selling gathering momentum after prices dipped below last week's lows. CBOT January soybeans end down 2 1/4c at $11.48/bushel. Soy product futures dropped in unison with soybeans, falling on global economic jitters. Broader-based losses across asset classes spurred sellers, as traders worry about slowed economic growth, analysts say. CBOT Dec soymeal dropped $8.80 to $289.60/short ton, and Dec soyoil ended down 0.99c at 49.89 cents/pound

 FKLI- Deep Correction That Might Last For Few Session

The FBM KLCI retraced extensively yesterday in the wake of correction season after the stock index has recover up close to 1,500 level last few weeks ago. Investors are taking their money out and stay on the sideline out of the stock market at the moment judging on the participation or volume transacted yesterday. Current weakness may continue as investors would not want to take additional risk in the market for the moment. At close, the FBM KLCI shed about 20.31 points or 1.4% to 1,434.08 level meanwhile the Nov contract decent about 29.50 points or 2.04% to 1,414.50, which closed 20 points discount to the FBM KLCI. Technically, market is expected to correct as mentioned on previous post but news regarding European debt concern that escalated recently have made most of the regional index performed weaker. The Nov contract does breached below the weekly support level around 1,420 and this event somehow command our attention that the market might resume its preceding down trend pretty soon. With 1,500 level appear as major resistance area, we can almost conclude that there was inadequate force or positive sentiment to sustain the Buying interest beyond this level. For today, market is likely tracking the performance of overnight U.S stock market, conclusively we are going to expect some minor rebound around 1,400 psychological support level.

Daily Pivot Point
R2= 1445
R1=1430
S1= 1406
S2= 1397

FCPO- Closed Lower Which Might Due To Export Figures 

 CPO futures closed lower yesterday as traders choose to cover their Long positions after a collective weaker than expected export figures announced yesterday. With less improvement on palm oil demand, market is likely hover into correction mode after it rallies swiftly for the past two weeks. Yesterday, independent palm oil cargo surveyor ITS estimated Malaysia Nov. 1-20 Palm Oil exports 1.04 Mln Tons, +0.6% on month while SGS estimated  Palm Oil exports 1.03 Million Tons for the same periods. With remaining nine more days for the November 2011 month to end, these figures does concern over the medium term price outlook for palm oil. Question will arise whether palm oil stocks are going to record even higher soon if there is not much improvement on the next export data announcement. But technically, the benchmark Feb is is having a healthy correction even though it dropped about RM57 to 3,191 level yesterday. If the manage to rallies again today and close in the positive territory we are likely to see a higher low formations form, which could signifies stronger positive momentum for the market to recover further. For today, targeted support will be located around 3,175 level based on the support trend line shown on hourly chart above else market is likely dive down lower if the regional stock index performance and Soya oil futures deteriorate further overnight.   
 
Daily Pivot Point
R2= 3279
R1=3253
S1= 3168
S2= 3145
Disclaimer: Information and opinions contained in this report are for educational purposes only. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness.

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