Wednesday, February 29, 2012

Market Overview 1st March 2012

 Thursday, 1st March 2012. The FBM KLCI surge to at least 5 months high yesterday when it manage to close above 1,570 level after retracing for the past few sessions.

"- U.S. stock indexes fell modestly Wednesday in closing the books on strong February gains, with the Dow Jones Industrial Average rising for a fifth straight month. Up 2.5% for February and 6% year-to-date, the Dow DJIA -0.41%   shed 53.05 points, or 0.4%, to close at 12,952.07. The blue-chip index on Tuesday closed above 13,000 for the first time since May 2008. The S&P 500 Index SPX -0.47%   declined 6.5 points, or 0.5%, to 1,365.68, a February rise of 4.1% and its third consecutive monthly gain, leaving it 8.6% higher from the end of 2011. The Nasdaq Composite Index COMP -0.67%   declined 19.87 points, or 0.7%, to 2,966.89."

 "-Most Asian markets ended February with solid monthly gains Wednesday as a recent pullback in oil prices and overnight gains on Wall Street underpinned sentiment, although Japanese and Hong Kong stocks pared their early advances. South Korea’s Kospi KR:0100 +1.33%  climbed 1.3% to 2,030.25, Australia’s S&P/ASX 200 index AU:XJO +0.84%  gained 0.8% to 4,298.50, Hong Kong’s Hang Seng Index HK:HSI +0.52%  added 0.5% at 21,680.08 and Japan’s Nikkei Stock Average JP:NIK +0.01% finished marginally higher at 9,723.24. China’s Shanghai Composite CN:000001 -0.95%  bucked the regional trend, snapping a long winning-streak to end 1% lower at 2,428.49."

"- Crude-oil futures ended a roller-coaster Wednesday in the black, bringing monthly gains close to 9% as positive U.S. macroeconomic data trumped concerns about a glut in supplies. Crude for April delivery CLJ2 -0.03%  gained 52 cents, or 0.5%, to settle at $107.07 a barrel on the New York Mercantile Exchange, turning higher yet again in the last moments of floor trading."

"-US soybean futures jump as strong export demand and limited farmer selling bolster the market, which shrugs off early pressure from swooning precious metals and extends recent gains on new export sales to China. Meanwhile, the market's climb to 5-month highs is attracting more trend-following buying, although some traders say a correction could come soon. Ken Morrison, trader and editor of Morrison on the Markets, says that while he is not "super-bearish," it could be "time to take a pause." CBOT March soy ends up 8 1/4c at $13.13 1/2 per bushel. March soymeal rises $4.70 to $351.20/short ton. But March soyoil, pressured by crude oil's weakness, slips 0.33c to 54.09c/pound."

FKLI- Upside Resume With Small Break Out

Investors will have something to cheer about when the stock index and the index futures rose to multi months high yesterday. Both of the instrument have undergo some price adjustment for the past few sessions and it just surge above important resistance level around 1,570. Mostly new trader would questions themselves how could our local market can surge in such velocity as regional index was not recording any amazing gain yesterday. In other words, why FKLI and FBM KLCI could surge more than 1% even though there is no significant gain on regional index. Traders who look for easy way out from trading such as pin pointing correlation between other market is likely found themself puzzled when the market moved such way. Ask any veteran traders, does them consider "correlation" as part of their criteria when they swing their trades, the answers will be a solid NO. Technically, the March contract has just break out yesterday when it manage to hit 1,578 level on afternoon session. This surge is likely a continuation from preceding uptrend and previous retracement have turn out to be typical adjustment in uptrend market. As I mentioned before in my previous week post, 1,600 level is not a fantasy as both of the instrument are moving on the right track to achieve higher ground. And if you are worry about European debt crisis, they have too much international and governing bodies to cover their back. Conclusively, these recovery has begin from September previous year and pro-longed till today. At close, the March contract rose 15.50 to 1,573, the highest level was 1,578, just 22 points from record high, 1,600 level. For today, support is located around 1,561 while resistance is pegged 1,589. 

Daily Pivot Point
R2=1589
R1=1581
S1=1561
S2=1549

 FCPO- Shooting Star On And Uptrending Market

CPO futures ended tad lower yesterday as traders choose to shed off their Long holding after the market open gap down yesterday. Soya oil was traded slightly lower to 54.75 cents per pound during Asia trading hours yesterday, 5.15PM +8GMT, it hit 55.20 cents per pound on Tuesday overnight. More Long covering activities were detected when the market sentiment was hammered by weak export figures reported by cargo surveyors. Export for full month Feb vs Jan stood around 1.175 millions tons, 9%~11% lower than the previous month. Despite lower export figures, market is likely went down due to technical correction as it is still early to tell that this could turn out to be a Bearish trend reversal. Unfortunately, what characterize be a euphoric Bulls on previous Tuesday has turn to be a shooting star on daily chart yesterday.
The Shooting formation is created when the open, low, and close are roughly the same price (as happened on Tuesday). Also, there is a long upper shadow, generally defined as at least twice the length of the real body. When the low and the close are the same, a bearish Shooting Star candlestick is formed and it is considered a stronger formation because the bears were able to reject the bulls completely plus the bears were able to push prices even more by closing below the opening price. The bears were able to counteract the bulls. The long upper shadow of the Shooting Star implies that the market tested to find where resistance and supply was located. When the market found the area of resistance, the highs of the day, bears began to push prices lower, ending the day near the opening price. Thus, the bullish advance upward was rejected by the bears.
Technically, initial assessment suggest that the market is likely having temporary correction on current uptrend but things could get ugly if the price could breach lower than the white support trend line shown on chart above. For today, support is likely located around 3,244 while resistance is pegged around 3,300. 
   
Daily Pivot Point
R2=3300
R1=3285
S1=3257
S2=3244
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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