Thursday, March 8, 2012

Market Overview 9th March 2012

 Friday, 9th March 2012. The FBM KLCI inches up yesterday tracking better performance from regional indices as investors weighting the impact over China's lower growth forecast announced two days ago. Other news to follow.

"-U.S. stocks extended gains into a second session Thursday as a deadline for private bondholders to exchange Greece-issued debt passed with what looked to be adequate participation, removing an obstacle to Greece’s second bailout. The Dow Jones Industrial Average DJIA +0.55%  closed up 70.61 points, or 0.6%, to 12,907.94. It’s still modestly lower for the week. The S&P 500 SPX +0.98%  ended up 13.28 points, or 1%, to 1,365.91. The Nasdaq Composite COMP +1.18%  added 34.73 points, or 1.2%, to 2,970.42."


"- Asia markets jumped on Thursday, with exporters gaining in Japan, while resource firms benefited from an improved risk tone as hopes for a Greek debt restructure firmed. Japan’s Nikkei Stock Average JP:NIK +1.97%  surged 1.6%, China’s Shanghai Composite CN:000001 +1.06%  rose 1.1% and South Korea’s Kospi KR:0100 +0.94%  climbed 1%. Hong Kong’s Hang Seng Index HK:HSI +1.32%  gained 0.9% and Australia’s S&P/ASX 200 index AU:XJO +0.66%  traded up 0.7%. Signs of progress on a Greek debt restructuring deal also encouraged investors in the U.S. on Wednesday, with confidence that the government will secure the required support for a private-sector debt swap by Thursday’s deadline rising."

"-Crude-oil futures on Thursday extended gains to a second session amid growing optimism that Greece will be able to clinch its crucial debt-swap deal. Oil for April delivery CLJ2 +0.10%  rose 42 cents, or 0.4%, to settle at $106.58 a barrel on the New York Mercantile Exchange."

"-US soybean futures end higher, boosted by export demand, including from China, and expectations for a smaller South American crop due to drought. Analysts expect a USDA report due Friday to cut forecasts for the soy crops in Brazil and Argentina, adding to demand for U.S. exports and tightening inventories. Soy also supported by Brazilian federal crop-forecasting agency Conab on Thursday trimming its outlook for Brazil's 2011-12 soybean crop. CBOT May soybeans end up 11 3/4c at $13.38 1/2 a bushel. May soybean oil ends up 0.41c to 53.39c/lb., while May soybean meal ends up $2.70 to $367.20 a short ton."

 FKLI- Tight Range On Correction

 Stock index manage to closed slightly higher yesterday supported by positive closing value on regional indices. The FBM KLCI rose marginally about 3.53 points to 1,578.36 while the March contract xx to xx. Market is still hesitate to reveal its direction at the moment as most of investors are waiting for further clue or news to add up their positions. Risk appetite in the stock market is still healthy as more and more investors are choosing stocks over other assets for their investment portfolio. Diversifying is the key spread out unsystematic risk, do not risk all your equity in one egg, spread it out on different basket / sectors. Back to index futures, the March contract was traded in a tight range within 1,576~1,581.50, subtle to find out whether correction period is over. If anything goes wrong from here and cause the March contract to retrace further, that correction should rebound from the white support trend line shown on daily chart above. Bear in mind that the market is merely hovering on correction mode and the Bulls are able to return swiftly with no sign at all.

Daily Pivot Point
R2= 1584
R1= 1581
S1= 1575
S2= 1573

 FCPO-Uptrend Resume

CPO futures ended higher yesterday as Soya oil futures manage to rebound from overnight sell-off during Asia trading hour. My initial assessment for the benchmark May in the morning session was derailed when the market did not tank even though Soya oil prices was traded down to 53.20 cents per pound 10 minutes before the FCPO market open. Instead, the benchmark May managed to open just slightly lower from previous Wednesday closed and continue to rose steadily throughout yesterday session. At close, the benchmark May rose RM37 to 3,303, the high of the day was 3,310. Technically, yesterday promising surge confirmed that market has resume its preceding uptrend. Henceforth, most of the resistance level is useless when the market momentum is rising. On external factor, crude oil prices will lead most of the other commodities prices to rise at the moment while USDA estimates is due to announce today evening. The question now is whether the market is going to top out at previous week high or making another higher high next. Judging from price action so far, there is less likely for the benchmark May to top out and retrace swiftly on previous week high but rather making a new high above that level as the market manage to recovered from previous days corrections. Most market that could survive few waves of corrections is going to recover with re-new Bulls strength. For today, support is located around 3,268 while resistance is pegged at 3,344. 

Daily Pivot Point
R2= 3344
R1= 3323
S1= 3268
S2= 3234
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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