Monday, March 12, 2012

Market Overview 13th March 2012

 Tuesday, 13th March 2012. The FBM KLCI continue to retrace yesterday thus prolonging the correction period as Bulls are still taking some breather. Other news to follow.

"- U.S. blue-chip stocks extended gains into a fourth session Monday ahead of a monetary-policy decision from the Federal Reserve and a rush of economic releases this week. The Dow Jones Industrial Average DJIA +0.29%  climbed 37.69 points, or 0.3%, to 12,959.71, its longest winning streak since the one ended Jan 20. The S&P 500 Index SPX +0.02%  added 0.22 points to 1,371.09, also its fourth day of gains. The Nasdaq Composite Index COMP -0.16%  shed 4.68 points, or 0.2%, to 2,983.66."


 "- Asian markets mostly declined Monday as a surprisingly large Chinese trade deficit stoked some concerns about demand for the country’s exports, with Japanese stocks pulling back after sharp gains recently. Japan’s Nikkei Stock Average JP:NIK -0.40%  reversed early gains to finish 0.4% lower at 9,889.86, after rising sharply in the last two trading days. Also declining after rising strongly in the previous two sessions, China’s Shanghai Composite CN:000001 -0.19%  dropped 0.2% to 2,434.86, South Korea’s Kospi KR:0100 +0.88% lost 0.8% to 2,002.50, Australia’s S&P/ASX 200 index AU:XJO -0.36%  shed 0.4% to 4,196.70 and Taiwan’s Taiex XX:Y9999 -1.10%  declined 1.1% to 7,927.55. Hong Kong’s Hang Seng Index HK:HSI +0.23%  finished 0.2% higher at 21,134.18."

"- Crude-oil futures ended lower Monday, ending a three-session winning streak for the commodity as investors worried about a potential slowdown for China in the wake of the country's larger-than-expected trade deficit. Oil for April delivery CLJ2 +0.23% gained nearly 3% over the past three sessions, but on Monday lost $1.06, or 1%, to settle at $106.34 a barrel on the New York Mercantile Exchange"

"-US soy futures end lower, pressured by traders continuing to take profits on recent gains amid worries about export demand. Analysts are concerned that high soy prices were stall export demand, despite lower projected global supplies. The unwinding of long soybeans/short corn spreads were featured as corn remains buoyed by tight supplies and lingering talk fresh export demand, analysts say. Meanwhile, a pick up Brazil's soy harvest added pressure, as the availability to global supplies increase, analysts say. Soy products followed the lead of beans, with soyoil garnering added weakness from slumping energy futures. CBOT May soybeans ended down 3 1/4c to $13.34 1/2/ a bushel. May soyoil dropped 0.31c to 53.96 cents/lb, and May soymeal was down $0.60 to $362.10/short ton."

FKLI- Correction Mode Still Switched On

The equity indexes prolonged its correction period and might be paving more way for some healthy retracement. At close, the FBM KLCI dropped about 14.25 points or 0.9% to 1,564.75 while index futures for March contract slide about 12 points to end at 1,565 level. This was the fifth retracement for the index futures so far as investors are staying away from the equity market awaiting more promising news to accumulate their holding again. Market might having be having some slowing down moment after hitting  multi years high and this condition not only applied to our market but those in U.S and regional market as well. Technically, the March contract have breach below the long term support trend line yesterday, prompting more corrections as it is making the first lower high formation on daily chart. In other words, the Bulls are having the same difficulties to breach above major resistance level at 1,560 but this does not conclude that the market have reverse into a down trend. In most uptrending market condition, there will price adjustment to the downside as it is necessary to filter out and to bring in more potent Buyers in the market. Hence when these potent Buyers does step in, market will recover and this how higher low is created. In another words, it is recognizing the balance of Bear and Bulls force when the price moved. For today, support is locate around 1,551 while resistance is pegged at 1,575.

Daily Pivot Point
R2=1585
R1= 1575
S1= 1558
S2= 1551

 FCPO- Buyers Walk Away And Market Corrected.

CPO futures ended weaker yesterday as Buyers tucked tail and booked profit after it ramped up last Friday. Unfortunately this time you might not be able to relate any reason behind this bizarre market event as cargo surveyors did announced good export figures yesterday. Most of the analyst would agreed that there is less positive effect even the export went up because it have been priced in last Friday. Whatever reason behind it, they cannot  inform you before that retracement happen because no one know for sure what is going to happen next. All we can do is to guess and always prepared our next steps when the market does move favorably or against us. Technically, the benchmark May retrace swiftly yesterday and wipe off most of the gain made on previous Friday. Market might be weaken but it does eliminate the current uptrend yet. What we can see from here was a retracement and not a trend reversal yet as there is no series of lower high plus lower low formed yet. For today, support is located around 3,285 while resistance is pegged at 3,341. 

P/S: Malaysia Mar. 1-10 Palm Oil Exports 448,615 Tons, Up 33% -SGS.
      Malaysia February Palm Oil Exports 1.18 Mln Tons, Down 11% -Intertek
Daily Pivot Point
R2=3365
R1= 3341
S1= 3301
S2= 3285
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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