Wednesday, December 21, 2011

Market Overview 22nd Dec 2011

 Thursday, 22nd Dec. The FBM KLCI rose extensively amid positive regional stock index performance yesterday as concern over European debt crisis eased towards Christmas weekend. Other news to follow.

"-U.S. stocks swung to a slightly higher close Wednesday, boosted by a bounce from some technical levels and late-breaking reports on Yahoo Inc. and Bank of America Corp. The Dow Jones Industrial Average DJIA +0.03%   ended up 4.16 points, or 0.03%, at 12,107.74 after falling as much as 104 points at midday and spending most of the session lower. The S&P 500 SPX +0.20%   ended up 2.42 points, or 0.2%, at 1,243.72, with technology the only one of the index’s 10 sectors to end lower."


 "-Most Asian stocks rallied Wednesday as strong U.S. and German data dissipated some worries about global economic health and sparked a rally in global markets. Trading volumes were thin in several markets ahead of the approaching year-end holidays. Japan’s Nikkei Stock Average JP:NIK +1.41%  advanced 1.5% to 8,459.98, South Korea’s Kospi KR:0100 +3.09%  added 3.1% to 1,848.41, Australia’s S&P/ASX 200 index AU:XJO +2.13%  gained 2.1% to 4,137.70 and Hong Kong’s Hang Seng Index HK:HSI +1.86%  rose 1.9% to 18,416.45. China’s Shanghai Composite CN:000001 -1.12%  rose as high as 1% before staging a retreat in afternoon trading. The benchmark index finished down 1.1% at 2,191.15."

"-Crude-oil futures closed higher Wednesday, with a bigger-than-expected drop of nearly 11 million barrels in last week’s U.S. crude supplies sending prices up for a third session in a row. On its first full trading day as a front-month contract, light sweet crude for February delivery CL2G +0.33%  rose $1.43, or 1.5%, to settle at $98.67 a barrel on the New York Mercantile Exchange."

"-US soybean futures ended higher, settling at 5-week highs. The momentum of setting new highs after plunging to 14-month lows recently continues to evolve, analysts say. Investors covering short positions ahead of Christmas and the end of the year fueled the buying, with lingering concerns about crop weather in South America helping buoy prices as well. CBOT March soy ended up 8 3/4c at $11.63 1/4/bushel. Soy product futures bounce with soybeans, driven by traders exiting short positions to reduce risk exposure ahead of the end of the year, analysts say. The absence of fresh news to direct prices kept futures following the lead of soybeans. CBOT March soymeal ended up $3.60 at $302.80/short ton; March soyoil finished up 0.05c at 49.80 cents/pound. "

FKLI- Santa Clause Rallies ?

 Most equities market are likely rallying before this Christmas weekend as investors are focus more on recent U.S economy data that showed some promising figures in midst of global uncertainties. Although most traders would fashionably agree that market tends to rally before the Christmas holiday above of anything else. But for this occasion it could be due to both stronger U.S economy data announced so far plus some seasonal pattern or what we called as " window dressing" towards the end of the fourth quarter. Whatever the reason is, the index futures is likely continue its upside momentum after breaking out from previous resistance trend line last Monday this week. The Dec contract have been formed series of higher lows and higher highs formation, signalling an optimistic trend. This positive momentum is likely to last until this Friday before Bursa Derivative will be closed on next Monday for Christmas holiday replacement. Some mild retracement is expected during that period as most investors are reducing their positions over the long holiday.  For today, major resistance is pegged at 1,500 while support is located around 1,477.

Daily Pivot Point
R2= 1500
R1= 1491
S1= 1477
S2= 1473

 FCPO- Recover Along With Its Rival Products Soya Oil. 

CPO futures rose substantially about RM52 to 3,072 along with Soya oil futures which recover about 0.68% to 49.72 cents per pound during yesterday Asia trading session  6.46pm +8GMT. Palm oil prices opened higher during the opening, gaping up from previous Tuesday closing figure, signalling for stronger positive movement throughout the session. On the other side, palm oil fundamental remain weak as demand would not improve that quick and inventories will be remain high around two millions tons for end of Dec 2011. Technically,  the upwards break out on benchmark Mar on daily chart and at the same time breached the previous high on hourly are likely serve as reliable indication for the market to recover further. More Short covering activities are expected if the market continue to rise further, giving more meaningful rallies, at least till the end of this week. Major resistance is expected around 3,125 (previous two weeks high) while support will located according to the daily pivot calculation stated below. For today, immediate support level is located around 3,041.

Daily Pivot Point
R2= 3102
R1= 3087
S1= 3041
S2= 3010
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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