Tuesday, March 20, 2012

Market Overview 21st March 2012

 Wednesday, 21st March 2012. The FBM KLCI is staying above 1,570 level safe level for the moment as regional index were mostly closed lower yesterday. Other news to follow.

"-U.S. stocks fell Tuesday, with the S&P 500 Index retreating after a three-session advance that had the index near a four-year high. After falling nearly 116 points, the Dow Jones Industrial Average DJIA -0.52%  closed down 68.94 points, or 0.5%, at 13,170.19. The S&P 500 SPX -0.30%   declined 4.23 points, or 0.3%, at 1,405.52. On Monday it had closed at its highest since May 2008 and also notched a new 52-week high. The Nasdaq Composite Index COMP -0.14%  shed 4.17 points, or 0.1%, to 3,074.15, outperforming the Dow and S&P 500."

"- Asian markets fell on Tuesday, with resource stocks hit by a decline in commodity prices and comments from an executive at mining giant BHP Billiton Ltd. that Chinese demand growth was slowing. China’s Shanghai Composite CN:000001 -1.38%  fell 1.4% to 2,376.84, Hong Kong’s Hang Seng Index shed 1.1% to 20,888.24 and Australia’s S&P/ASX 200 index AU:XJO -0.37%  eased 0.4% to 4,275. South Korea’s Kospi KR:0100 -0.24%  fell 0.2% to 2,042.15 and Taiwan’s Taiex XX:Y9999 -0.89%  shed 0.9% to 7,972.70. Japanese markets were closed for a holiday."

"- U.S. crude-oil futures lost ground Tuesday alongside U.S. equities and other commodities on renewed concern about a slowdown in China, and as Saudi oil officials said oil supplies are plentiful and crude futures prices too high. Crude-oil futures for April delivery CLJ2 -2.23%  fell $2.48, or 2.3%, to settle at $105.61 a barrel on the New York Mercantile Exchange."

"-US soy futures stumbled, with soybeans sliding to one-week lows in a broad-based risk-off trading day. Widespread fund selling across commodities dogged soy prices, as traders looking to reduce some risk exposure took profits on prior gains, analysts say. The absence of fresh export news left buyers without an incentive to extend gains, with overbought market signals accelerating technical selling, analysts add. CBOT May soybeans ended down 21 1/2c at $13.45/bushel.  May soymeal dropped $5.30 to $365.60/short ton, and May soyoil fell 1.07c to 54.33cents/lb."

FKLI- Still Looking At Weakness. 

Stock index remain resilient around 1,570 level currently as market participants are digesting financial information around the world. With China's and U.S market are showing signs of slowing from their GDP and manufacturing index, concern over stagnant growth might be located just inches away. But for more practical news, equities index is likely undergo a correction or price adjustment period after recovering steadily from the past five months. Technically, the March contract is susceptible to correct further based on lower high formation on daily chart, but not to a level that could cause the current uptrend to reverse yet. For worse case scenario, mild correction is expected to occur soon judging from current candle formation which suggested that Buyers were unable to push the index higher at the moment. What we are looking at currently is pausing trend that resulted from an exhaustion after an extensive uptrend. In another words, Bulls are likely taking some breather momentarily. For today, support is located around 1,570 while resistance is pegged at 1,580.

Daily Pivot Point
R2= 1580
R1= 1578
S1= 1573
S2= 1570

 FCPO- Temporary Correction As Bulls Retreated.

CPO Futures dipped for the second time yesterday due to recent weakness on Soya oil prices. Market movement is getting highly volatile recently with more price adjustment or correction came to play after the price hit new high. It is apparent that traders and investors that go Long are very cautious about their exposure as they will dump their holding at will on any sight of danger or weakness. On medium term, market is likely pausing from its preceding uptrend and paving some way for further market correction. However, this does not mean that market direction has been reverse to Bearish momentum as the Bears need huge commitment to overturn Bulls. Instead, we might be looking at another typical price correction from this price adjustment. Bears won most of the battle yesterday when the benchmark June closed RM7 lower to 3,366, the low of the was 3,346. Although it is hard to judge, higher export data does help to cushion yesterday price weakness, else the market might have been free falling if the export figures turn out surprisingly lower. Technically, for the time being the benchmark June is likely hovering lower due to lower high formation formed on hourly chart plus weakness is also visible on daily chart with three successive red candles since last Friday. These three red candles formed on daily does look like a Bearish three black crows candlesticks pattern thus explain why the market is susceptible to correct further this week. Furthermore, the Bearish Three Black Crows Pattern is indicative of a strong reversal during an uptrend. It consists of three long black / red candlesticks, which look like a stair stepping downward.  Bullish mood of the market is gradually diminish.

Daily Pivot Point
R2= 3395
R1= 3380
S1= 3348
S2= 3331
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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