Market Overview 2nd Feb 2012

Thursday, 2nd Feb 2012. FBM KLCI recover as European debt crisis progress seems to improve. Other news to follow.

"- U.S. stocks rallied Wednesday, breaking a four-session loss streak for the Dow Jones Industrial Average and S&P 500, lifted by Chinese and European data and an expansion in U.S. manufacturing. The Dow Jones Industrial Average DJIA +0.66% ended up 83.55 points, or 0.7%, at 12,716.46, scaling back in the final minutes after gaining nearly 152 points. The S&P 500 Index SPX +0.89%  added 11.68 points, or 0.9%, to 1,324.09, with the financial sector rising the most among its 10 industry groups, all of which gained. The Nasdaq Composite COMP +1.22%  rose 34.43 points, or 1.2%, to 2,848.27."

"- Asian stock markets ended on a mixed note following a choppy trading session Wednesday as data on Chinese manufacturing activity led to expectations Beijing may not immediately ease its monetary policy. China’s Shanghai Composite Index CN:000001 -1.07%  fell 1.1% to 2,268.08, Australia’s S&P/ASX 200 index AU:XJO -0.87%  lost 0.9% to 4,225.70 and Hong Kong’s Hang Seng Index HK:HSI -0.28%  dropped 0.3% to 20,333.37. Meanwhile, South Korea’s Kospi KR:0100 +0.18%  ended up 0.2% to 1,959.24, Japan’s Nikkei Stock Average JP:100000018 +0.08% closed 0.1% higher at 8,809.79, and Taiwan’s Taiex gained 0.4% to 7,549.21."

"-Crude-oil futures ended lower Wednesday as a higher-than-expected increase in supplies eclipsed support coming from rising U.S. stocks, a lower dollar, and mostly positive macroeconomic data. Crude for March delivery CL2H -0.08%  declined 87 cents, or 0.9%, to settle at $97.61 a barrel on the New York Mercantile Exchange. That was oil’s lowest finish since mid December."


"-US soybean futures rallied, continuing to retrace losses from earlier in the week. Commodity friendly external market influences and confirmation of fresh export business with China fueled the price gains, analysts say. Buyers were also encouraged by continued uncertainty about South American crop potential, as private forecasters continue to lower their crop estimates, analysts say. Soybeans remain firmly planted within a month long wide trading range, with traders awaiting lasting fundamental direction. CBOT March soy ended up 16 1/4c at $12.15 1/4 a bushel. Soy product futures finished higher, rising in step with advances in soybeans. The combination of a weaker US dollar, fresh Chinese demand for soybeans and lingering uncertainty about South American crop damage, buoyed soymeal and soyoil futures, analysts say. CBOT March soymeal ended up $3.00 at $322.30/short ton, and March soyoil finished up 0.31c to 51.18 cents/pound."

FKLI- The Tale Of Zig Zag Continue.

 Stock index ended the session at high amid strong bounce back from Asia benchmark last Tuesday, before Bursa Derivative is shut yesterday for Kuala Lumpur Federal Territory holiday.  At close, with most of the regional market traded higher, the FBM KLCI rose about 7.74 points to 1,521.29 level while the Jan contract surge about 16 points to settle at 1,518 level. Market were mostly positive about the European debt progress as Greece is said to be nearing solutions to avoid a messy default. Judging on previous Tuesday promising recovery, market is likely having temporary correction happened on previous Monday after hovering within the 1,500~1,535 range for two weeks previously. Furthermore, price action on daily chart still suggest upside momentum remain intact as long term support trend line (plotted on daily chart) is yet breach. On the other side, market might be susceptible to rallies due to corporate earnings results this month plus some hype about our general election. Technically, market is likely hovering back to previous weekly range again around 1,500~1,535 level even though the index futures manage to recover back swiftly on previous Tuesday.

P/s:Another news, Bank Negara Malaysia is scheduled to hold its monetary policy committee meeting this evening, with expectations for the policymakers to keep interest rates unchanged.

Daily Pivot Point
R2= 1525
R1= 1519
S1= 1504
S2= 1495


FCPO- Mild Recovery, Market Remain Bearish. 

CPO futures gaped down on the early morning session on previous Tuesday before Bursa Derivatives was closed for Kuala Lumpur Territory Day yesterday. Once opening bell rang, the benchmark Apr continue to retrace to the low of 3,044 level before settling lower about RM4 to 3,078 at the end of session. My initial assessment,exports data did not support much for CPO futures recovery as the figures came out lower as expected. Malaysia January Palm Oil Exports 1.29 Mln Tons, Down 13% -SGS, Palm Oil Exports 1.32 Mln Tons, Down 11% -Intertek. The afternoon session recovery is likely turn out to be a technical rebound as traders cover their Short positions ahead of Wednesday holiday. Soya oil mild recovery (March soyoil on the Chicago Board of Trade was 1% higher at 50.75 cents a pound at the end of Tuesday session, 6pm +8GMT) might have provide some support for CPO futures late recovery. Overall, FCPO direction is still heading down judging hourly chart and above based on previous lower high and lower low candle formation. We are expecting the benchmark Apr first recovery hurdle peg around the 34 period EMA tunnel shown above while further correction is poised to take place if the price fell lower than 3,040 (previous Tuesday low). For today, mild recovery is expected to take place as March Soya oil futures continue to recovered about 0.225 cents or 044% to 51.09 cents traded on 1st Feb 6pm +8GMT. Daily pivot point for support is located around 3,028 while resistance is pegged at 3,094. 

Daily Pivot Point
R2= 3110
R1= 3094
S1= 3053
S2= 3028
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.