Market Overview 8th March 2012

 Thursday, 8th Feb 2012. The FBM KLCI dropped swiftly amid weaker than expected overnight performance on U.S market. Meanwhile regional index continue to retrace as well due to lower China's growth forecast. Other news to follow. 

"-U.S. stocks recovered some of the prior day’s losses Wednesday, helped by an upbeat report on jobs growth, a report the Federal Reserve could implement new bond buys if the economy flags and signs of progress on Greece’s debt swap. The Dow Jones Industrial Average DJIA +0.61%  ended up 78.18 points, or 0.6%, to 12,837.33 — a day after falling more than 200 points for its worst single-session drop of the year. The S&P 500 Index SPX +0.69%  climbed 9.27 points, or 0.7%, to 1,352.63, with financials and industrials among the sectors leading those gains. Utilities was the only one of 10 sectors to close lower. The Nasdaq Composite Index COMP +0.87% gained 25.37 points, or 0.9%, to 2,935.69."

"-Asia stocks slid on Wednesday, with banks and resource firms among the worst performers, as fresh fears of a chaotic Greek default combined with global growth worries to erode investor confidence. Australia’s S&P/ASX 200 index AU:XJO -1.45% dropped 1.5%, Hong Kong’s Hang Seng Index HK:HSI -0.86% dropped 0.8%, Japan’s Nikkei Stock Average JP:NIK -0.64%  and South Korea’s Kospi KR:0100 -0.91%  gave up 0.7%. China’s Shanghai Composite CN:000001 -0.65%  a more modest 0.2%."

"-Crude-oil futures ended higher Wednesday after a weekly inventories report showed a smaller-than-expected increase and on a report saying U.S. Federal Reserve officials are considering a new type of bond-buying program. Crude for April delivery CLJ2 -0.07%  rose $1.46, or 1.4%, to settle at $106.16 a barrel on the New York Mercantile Exchange."

"-US soybean futures end lower, backpedaling after setting a 5-month high, falling in sympathy with slumping corn and wheat futures. Sharp declines there sparked broader selling across grain and oilseed markets, with traders taking profits on recent gains ahead of Friday's USDA supply-and-demand report. Overbought technical indicators and the absence of fresh demand news to sustain bullish momentum encouraged traders to reduce some risk exposure. Traders say the bullish features of exports demand and smaller South American crop sizes were adequately factored into prices. CBOT May soy ended down 8 1/2c at $13.26 3/4 a bushel. May soymeal fell $1.40 to $364.50/short ton and May soyoil dropped 0.30c to 52.98c/pound."

FKLI- Taking Some Breather

Shares on Bursa Malaysia retrace extensively yesterday as the FBM KLCI dropped about xx to xxx. Market is going to take some rest after rising steadily since Oct last year. Fortunately, we did not see any severe correction yet so far for both stock index and index futures. Most of the mild retracement and corrections are deem as typical sight in an uptrend, as advancing Bulls in an uptrend will exhausted after prolong climbed.  With most of the U.S market and regional indices are hovering on correction mode, these relation will somewhat paint negative background for our equity market. Technically, March contract previous day Bearish engulfing candle formed on daily chart is likely signifies prominent control by the Bears. Some may agree that the market happens to take some breather approaching previous high but market is likely retrace due to multi-year resistance at around 1,600 level. Daily chart has formed a double top chart pattern so far and we are looking at how bad this correction could get. The first support trend line will measure how aggressive for the Bears to push the market down. Hence, more weakness expected if the March contract could breach below this support trend line. For today, support is located around 1,570 while resistance is pegged at 1,582.

Daily Pivot Point
R2= 1582
R1= 1578
S1= 1572
S2= 1570

FCPO-  Closed Positive After Retrace For Three Sessions.  

CPO futures closed firmer yesterday as it recouping from previous three sessions retracement. The benchmark May rose about RM22 to 3,274 amid sudden surge from Soya oil futures. The most active traded Soya oil futures rose 0.45 cents to 53.70 cents per pound on 6.00PM +8GMT yesterday. There was some irregular price traded for the benchmark May during 4.55PM with few lots matched at 3,222 level but it was likely some mistake made on spread market.  Hence, all outright queue will not able to get as it is just implied price given for the spread. Technically, the benchmark May is likely to resume its preceding uptrend judging from strong closing that wipe out most of yesterday pivot resistance level plus breaching above the resistance trend line for the second time. If the benchmark May continue to close above today resistance level around 3,290, we are likely to see another higher lows formed. Furthermore solid support area has been identified around 3,220 as price manage to bounce off from that level for several times. Medium term traders could hold or further Long the market and place their Stop loss a few points below this support area. For today, support is located around 3,235 while resistance is pegged at 3,304.

Daily Pivot Point
R2= 3304
R1= 3285
S1= 3235
S2= 3204Disclaimer: 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.