Sunday, March 18, 2012

Market Overview 19th March 2012

 Monday, 19th March 2012. The FBM KLCI retrace slightly on previous Friday paving way for some profit taking activities towards closing bell. Other news to follow.

"- U.S. stocks mostly declined Friday, limiting weekly gains and halting the Dow’s longest up ride in more than a year, after an index of consumer confidence unexpectedly fell in March. Up 2.4% for the week, the Dow Jones Industrial Average DJIA -0.15%  fell 20.14 points, or 0.2%, to 13,232.62. Friday’s loss halted a seven-session climb by the Dow, its longest winning streak since February 2011. The S&P 500 SPX +0.11%  added 1.57 point, or 0.1%, to 1,404.17, with energy leading sector gains and utilities losing the most ground among its 10 major industry groups. The index also rose 2.4% from the week-ago close. The Nasdaq Composite COMP -0.04%  declined 1.11 points, or 0.04%, to 3,055.26, also rising 2.4% for the week."


"-Japanese stocks rose narrowly Friday to clinch a sixth straight week of gains as technology firms advanced on the back of an extended rally on Wall Street, while Chinese shares rebounded on bargain buying after two days of losses. Most other regional markets declined as investors locked in profits before the weekend, with energy shares losing ground in Sydney and Hong Kong after crude-oil prices dropped in New York Thursday. China’s Shanghai Composite CN:000001 +1.30%  was the day’s best performer among major markets, rising 1.3% to 2,404.74 after dropping in the last two sessions. But the index still ended the week with a 1.4% decline. Australia’s S&P/ASX 200 AU:XJO -0.04%  ended marginally lower at 4,276.20, South Korea’s Kospi KR:0100 -0.46%  lost 0.5% at 2,034.44, Hong Kong’s Hang Seng Index HK:HSI -0.17%  shed 0.2% at 21,317.85 and Taiwan’s Taiex gave up 0.8% to 8,054.94.Japan’s Nikkei Stock Average JP:100000018 +0.06%  rose 0.1% to 10,129.83 after seesawing between gains and losses."

"- Crude-oil prices climbed Friday, with the dollar-denominated commodity finding support from a downturn in the greenback, allowing futures to cut into their weekly loss. April futures for light, sweet crude CLJ2 +1.95% rose $1.95, or 1.9%, to settle at $107.06 a barrel on the New York Mercantile Exchange."

'-US soy futures end higher, extending the market's uptrend. Strong export demand coupled with traders assumptions that corn will take acres away from soybeans this season continued to push soy prices higher, analysts say. Warm/dry Midwest weather leads many to increase corn acre estimates at the expense of beans, says analyst Doug Bergman at RCM Asset Management. Soybeans ended up for 25th time in the last 33 trading days. CBOT May soybeans end up 5c at $13.74/bushel. Soy product futures followed soybeans lead, buoyed by prospect that lower South American supplies will lead to increased US demand. May soymeal end up $3 to $374.40/short ton; and May soyoil ended up 0.02c at 55.50 cents/lb."

FKLI- Some Hurdles Ahead

 It would be impossible to expect a smooth ride to the historical high at the moment as market is showing sign of resilient around 1,580 level. Last week, both of the equity index ended slightly lower when the market refuse to continue its positive momentum above 1,590 level. This is the area and time where most of the traders and investors confuse over the main direction of the market. A quick check on the daily and hourly chart suggest that Buyers are struggling to regain control due to double top formation plus lower high formation that indicate temporary weakness in the market. A glimpse on weekly chart posed bigger threat to the Bulls right now as market has closed lower for two weeks straight, a warning sign that Buying activities are starting to fade. So, this mind blogging question on which time frame you should follow that very much depends which time frame you are trading on. Short term traders who resolve on trading using 15 minutes~60 minutes trading time frame may not focus so much on weekly chart while medium term trader would probably emphasized on daily plus weekly chart for holding their position. Whenever you trading horizon is, never get confused with overall market direction which is still up, but that does not mean there would be no nasty correction occur along the way. What we are looking at might be the next nasty correction that is forming due to lower high plus small double top formation in daily chart. For today, support is located around 1,567 while resistance is pegged at 1,588. 

Daily Pivot Point
R2= 1588
R1= 1582
S1= 1571
S2=1567

 FCPO- May Pause Before Surging Again

CPO futures might be showing sign of uptrend pause after it rose to a new high on previous Friday. After surging up to 3,418 level the benchmark June spend most of the its time hovering around 3,390~3,400 level till previous Friday closing bell, signifying less follow thru Buying activities after the price create new high. The most active traded Soya oil also retreated about 0.26 cents to 55.22 cents per pound during Asia trading session, 6.00PM +8GMT. At close, the benchmark June ended slightly higher to 3,398 level, low of the day was 3,385. Extra demand on palm oil will provide needed support for the price to rise further as higher demand will slow down stocks build up for the time being. Technically, upside momentum remain intact with series of higher highs and higher lows formation formed so far. Market is likely trending up but susceptible for certain correction along the way. Traders are advised to pay attention on pivot support level as it might provide strategic expectation for the rebound if it does retrace for any reason today.

Daily Pivot Point
R2= 3433
R1= 3415
S1= 3382
S2=3367
 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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