Market Overview 22nd March 2012

Thursday, 22nd March 2012. The FBM KLCI closed firmer yesterday despite weaker performance on regional index. Other news to follow.

"- U.S. stocks closed mostly lower Wednesday with energy shares hit by Baker Hughes Inc.’s weak forecast and Hewlett-Packard Co.’s restructuring plans dragging on the Dow average. The Dow Jones Industrial Average DJIA -0.35%  dropped 45.57 points, or 0.4%, to 13,124.62, led lower by H-P. Shares in the company fell 2.2% as investors expressed skepticism about a decision to combine its printing and personal computing lines into a single unit.The Nasdaq Composite COMP +0.04%  again outperformed, extending a trend that’s lifted the index 18% this year. On Wednesday, the Nasdaq gained 1.17 point, or 0.04%, to 3,075.32."

"-Most Asian markets fell Wednesday as lingering worries about China’s economic growth pressured commodity and exporter stocks, with Japanese shares declining for the first time in six trading days. Japan’s Nikkei Stock Average JP:100000018 -0.55%  fell 0.6% to 10,086.49 as trading resumed after Tuesday’s holiday. Australia’s S&P/ASX 200 index AU:XJO -0.48%  retreated 0.5% to 4,254.3, South Korea’s Kospi KR:0100 -0.73%  lost 0.7% to 2,027.23 and Hong Kong’s Hang Seng Index HK:HSI -0.15%  slipped 0.2% to 20,856.63. China’s Shanghai Composite CN:000001 +0.06%  rose 0.1% to 2,378.20 after a session of choppy movements, while Taiwan’s Taiex XX:Y9999 +0.12% inched up 0.1% to 7,981.94. "

"- U.S. crude-oil futures rose Wednesday after a weekly government report showed a surprise decline in inventories, and prices gathered more steam as the end of floor trading approached. Crude for May delivery CLK2 -0.25% the new front-month contract, advanced $1.20, or 1.1%, to end at $107.27 a barrel on the New York Mercantile Exchange. Oil has settled higher for three of the past four sessions."

"-US soybean futures end higher, rebounding from declines seen so far this week. The combination of a strong demand base, declining South American crop estimates and the uncertainty of 2012 US acreage underpinned prices as the market got back to the theme of buying beans on fear of losing acreage in 2012 to other commodities and assumptions that strong China demand will tightening US supplies amid next week's USDA reports, says Mike Zuzolo of Global Commodity. CBOT May soybeans ended up 10c at $13.55/bushel. Soymeal and soyoil followed soybean futures, climbing on supportive demand outlooks. May soymeal rose $4.20 to $369.80/shot ton and May soyoil gained 0.05c to 54.38c/pound.

FKLI- Swift Recovery With A Bullish Marubozu Candle.

 
 Stock index recovered along with index futures yesterday while most of the regional index closed slightly in red territory.  It may not be a significant surge for FBM KLCI but it is enough to push the index futures to closed in premium. At close, the FBM KLCI rose about 4.91 points to 1,582.53 while index futures closed higher about 11 points to 1,586.50, finished just two points off the high. No doubt that Bulls are controlling the play when the index futures manage to recover from the low of 1,572. It seems that what we have witnesses for the past two sessions might have been a mild price adjustment or retracement while the major up trend remain intact. Market could resume its preceding uptrend as there was another higher lows detected on the daily chart above. Plus, we are likely expecting another candle formation of higher high if the FKLI manage to breach above 1,598 level. Technically, yesterday substantial recovery mark the return of Bulls forces as the index futures manage to closed at the high of the day. Apart from that, the previous retracement happen on last two session were fully recovered yesterday when the March contract rose up to 1,588.50. With long term support trend line remain unharmed, Bears presence in the market is somewhat powerless to effect the price from falling. For today, support is located around 1,576 while resistance is pegged at 1,598.  

Daily Pivot Point
R2= 1598
R1= 1592
S1= 1576
S2= 1565

 FCPO- Downside Paused, Bulls Are Likely Gathering Its Strength.

 CPO future ended slightly higher to 3,368 separate from Soya oil weakness which went down due to the absence of fresh export news left buyers without an incentive to extend gains plus overbought market signals accelerating technical selling. We are likely looking at a pause for the Bears to push down the market further and pending for a  sign of recovery at the moment. To sum up, it is a tricky session for the past two session as Bears are losing its strength on the way down and Bulls are likely begun accumulating more when the price is retracing, limiting the downside potential for the market to drop further. It is still early to tell where is the next direction for the market to go as both Bulls and Bears strength are some what equally match. Nonetheless, we can always prepare and expect the next sign of market direction by looking at recent support and resistance level. Market is expected to fall further if the benchmark June breach below 3,340 support level while it is likely to resume its preceding uptrend if it manage to rise above 3,380 resistance level.  For today, support is located around 3,350 while resistance is pegged at 3,379~3,380 follow by 3,390. 

Daily Pivot Point
R2= 3390
R1= 3379
S1= 3350
S2= 3332
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.