Friday, November 25, 2011

Market Overview 29th Nov 2011

Tuesday, 29th Nov. The FBM KLCI erased previous Thursday gained after it slide down again the next day due to European debt crisis concern. Other news to follow.

"-U.S. stocks leapt Monday, posting their best day in at least a month, as Wall Street embraced moves by European leaders to join euro-area members in a fiscal union and on evidence U.S. holiday sales got off to a record start. The Dow Jones Industrial Average DJIA +2.59%  rallied 291.23 points, or 2.6%, to 11,523.01.It was the blue-chip index’s best day since Oct. 27 and marked a partial recovery from last week, when it sank 4.8%. Rebounding after a seven-session losing streak, the S&P 500 Index SPX +2.92%  rose 33.88 points, or 2.9%, to 1,192.55. The Nasdaq Composite Index COMP +3.52%  climbed 85.83 points, or 3.5%, to 2,527.34, its best percentage gain since Aug. 23."

"- Asian shares jumped on Monday, as investors reacted to the latest reports of measures designed to get a grip on Europe’s debt crisis. Hong Kong’s Hang Seng Index HK:HSI +1.97%  rose 2%, while Japan’s Nikkei Stock Average AU:XJO +1.85%  advanced 1.6%. South Korea’s Kospi KR:0100 +2.19%  climbed 2.2%, Australia’s S&P/ASX 200 index AU:XJO +1.85%  rose 1.9%, and the Shanghai Composite Index CN:000001 +0.12%  edged up 0.1%. Europe remained the focus for Asian markets, with a variety of reports over the weekend suggesting progress on addressing the euro-zone debt crisis."

"-Crude-oil futures on Monday settled at their highest in more than a week, spurred by a strong start to the holiday-shopping season, a weaker dollar, and a surge for equities. Light, sweet crude futures for January delivery CL2F -0.62%  advanced $1.44, or 1.5%, to settle at $98.21 a barrel on the New York Mercantile Exchange."

"-US soybean futures recover some from last week's sharp declines on the positive influence of macro markets. Optimistic outlooks for progress on the European debt crisis led to a widespread bounce in global financial markets, in the process pressuring the US dollar and boosting dollar-denominated commodity prices. Futures were aligned with macro markets, also drawing support from buyers encouraged that recent price declines have renewed buying interest by China. CBOT January soy ended up 14 1/2c at $11.21/bushel. Soy product futures climbed in unison with soybeans, buoyed by widespread buying across broader assets. A more upbeat outlook on the European debt crisis, triggered a risk on trading environment, with weakness in the US dollar and higher energies helping futures stabilize after slumping to multi-month lows last week, analysts say. CBOT Jan soymeal end up $6.20 at $289.20/short ton, and Jan soyoil rose 0.71c to 49.15 cents/lb.

 FKLI- Choppy Way Up. 

Bursa Derivative was closed yesterday on Awal Muharam replacement holiday. While our local market was closed, most Asia benchmark were traded slightly higher on European debt crisis latest measures to control their financial troubles. On last Friday, both index futures and stock index were traded substantially lower amid overbought condition on last Thursday. It seems that most investors prefer to shed their positions on previous Friday ahead of three days holiday as there was no follow thru Buying activities on index futures when it closed at about 1,450 level. On sentiment wise, market is still susceptible to fall swiftly if there is any bad progress on European debt issues plus slowing economy outlook that spread through not only in the U.S market but in Asia market as well. Deteriorating confidence due to weak development on European financial crisis will be the main hurdles for investors to commit (Buying) for longer term. Technically, as long as the spot month contract does not breach below 1,407 level (previous low) the index futures is poised to recover after higher lows formation on hourly chart. 

Daily Pivot Point
R2= 1450
R1= 1435
S1= 1414
S2= 1407

FCPO- Continuous Correction Due To Broader Commodities Weakness.

Straight line deep correction, that was what happen on palm oil futures last week. When the benchmark Feb hit the 16 weeks high around 3,270 level, market swiftly adjust and correct from that peak. Initially most of the traders thought it was a typical 100~150 points corrections, but it turn out to be a deep 200 points correction last week. For this near term, futures sentiment is likely weak with the lower than expected fall on  palm oil export figures announced on previous Friday couple with deep correction on Soya oil futures as well. Unfortunately the bad news does not end here, based on technical analysis there is no telling when is the correction will end as there is no sign of recovery yet. The best guess would be  expecting further correction judging from the weakness that breached below the second support trend line (positive slope white diagonal line shown above) on last Friday. Selling pressure was noticeably higher on last Friday when as the benchmark Feb closed RM39 lower to 3,069, with overall volume for the week fell to 157,681 lots from 195,881 lots previous week while open interest increased to 128,622 contracts from 126,659.

Daily Pivot Point
R2= 3141
R1= 3105
S1= 3041
S2= 3013
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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