Market Overview 23rd March 2012

Friday, 23rd March 2012. The FBM KLCI closed unchanged yesterday after recovering for past two sessions while regional index ended in mixed. Other news to follow. 

"- U.S. stocks dropped Thursday, with the S&P 500’s third-straight loss pushing it back under 1,400, a decline analysts chalked up to the market’s double-digit rise in the first quarter. Lightly cutting into its near 11% climb so far for 2012, the S&P 500 Index SPX -0.72%  shed 10.11 points, or 0.7%, to 1,392.78, The Dow Jones Industrial Average DJIA -0.60%  on Thursday fell 78.48 points, or 0.6%, at 13,046.14. It’s still up 6.8% for the year. But it’s lost 1.4% this week, on track for its worst week since mid-December. The Nasdaq Composite Index COMP -0.39%  declined 12 points, or 0.4%, at 3,063.32, up more than 17% since the end of 2011."

"-Many major Asia markets fell Thursday after data showed Chinese manufacturing activity has likely slowed sharply this month, though some markets managed to remain in positive territory. The Shanghai Composite CN:000001 -0.10%  lost 0.3%, South Korea’s Kospi KR:0100 -0.05% shed 0.2%, and KR:0100 -0.05% Hong Kong’s Hang Seng Index HK:HSI +0.22%  swung from gains to a drop of 0.1%. Japan’s Nikkei Stock Average JP:100000018 +0.40%  was up 0.4% at the end of the morning session, just ahead of the Chinese data release, while Australia’s S&P/ASX 200 index AU:XJO +0.46%  pared its gains after the data but was still trading 0.3% higher."

"-Crude-oil futures dropped on Thursday as weak manufacturing data from Europe and China spurred concerns about global growth, and on reports France and other industrialized nations are considering the release of some strategic oil reserves. Traders also tuned to President Barack Obama’s assertions that his administration would fast-track the approval of a pipeline meant to alleviate supply bottlenecks in the U.S. Crude oil for May delivery CLK2 +0.34%  lost $1.92, or 1.8%, to settle at $105.35 a barrel on the New York Mercantile Exchange. They more than gave back Wednesday’s 1.1% gain on the back of a surprise decline in inventories."

"-US soybean futures end lower, pressured by disappointing weekly export data and worries about weaker Chinese demand. The USDA reported weekly net export sales of 532,800 metric tons of soybeans for the week through March 15, below analysts' expectations for total sales between 900,000 and 1.3 million metric tons, raising concerns about high prices damping demand. A weak reading for Chinese manufacturing activity released fueled concerns about slowing economic growth in China, leading to possible slower soy demand in the world's largest soybean importer. CBOT May soybeans end down 5 1/2c at $13.49 1/2/bushel. May soymeal rises $0.30 to $370.10/short ton, and May soyoil ends down 0.42c to 53.96 cents/lb."

FKLI- Some Mild Hurdles To Upside. 

 Stock index ended the day unchanged after climbing up to 1,586 level in the morning session while index futures retraced about 2.50 points to 1,584 level after surging to 1,591.50 level. Most investors are spooked by the early U.S market equity index performance as the Dow futures dipped about 78 points to 12,989 level during yesterday Asia trading session, 5.25pm +8GMT. The news regarding recent China's manufacturing index and lower GDP growth projection have spur fear around market participants to cover their Long positions towards the end of the session. Market is likely hovering lower today which might due to news on China slow down plus Bearish performance on other major indices in Europe and U.S market. But the downside is somewhat limited to our market as we are less expose or correlate with external sentiment abroad. Technically, the March contract was having a positive opening and mid market performance but profit taking took off in the afternoon and caused the market to closed in red territory. In other words, Bulls were presence in the early session but Bears manage to overcome and mauled them in the closing session. Even though market does close weaker yesterday, medium term direction suggest that upside potential remain higher. For today, support is located around 1,577 while resistance is pegged at 1,594.

Daily Pivot Point
R2= 1594
R1= 1589
S1= 1580
S2= 1577

FCPO- Downside Reverse

 CPO futures had a sudden turn around when the Bulls suddenly give up easily after the market open higher in the morning session. Buyers were unable to fend off Selling pressure towards the afternoon session where Bears get to push the benchmark June down to 3,334 level before it settle RM26 lower to settle at 3,342 yesterday. Market Bullish momentum was swiftly demolish after the opening bell as most of the Long holder just decide collectively to dump their positions as soon as possible. Most of the panic Long covering activities get worse when in late afternoon when the Soya oil dropped extensively about 0.3450 cents to 54.03 cents per pound on the end of BMD session yesterday, 6.10pm +8GMT. Technically, we are likely looking Bearish reversal signal at the moment when the benchmark June formed lower high plus lower low formation on hourly chart shown above. It is no doubt a reliable indication for the market to correct further and it should not have any difficulties to breach the medium support trend line shown above as well. Bears are the main characters in play at the moment while Bulls might need to wait for other positive news to recover again. For today, support is located around 3,304 while resistance is pegged at 3,372. 

Daily Pivot Point
R2= 3402
R1= 3372
S1= 3323
S2= 3304
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.