Sunday, April 15, 2012

Market Overview 16th April 2012

Monday, 16th April 2012. The FBM KLCI struggled to stay on its gain for the third time last week amid uncertain outlook on recent regional performance despite earning results from the west. Other news to follow.

"-U.S. stocks fell Friday, with the major indexes recording their worst week this year, after China reported its economy slowed more than anticipated. The Dow Jones Industrial AverageDJIA -1.05%  fell 136.99 points, or 1.1%, to close at 12,849.59, leaving it down 1.6% from the prior week, its most substantial weekly hit since the middle of December. The S&P 500 SPX -1.25%  dropped 17.31 points, or 1.3%, to 1,370.26, off 2% from the week-ago close, with financial and technology faring the worst and utilities and consumer staples the best performers among its 10 industry groups. The Nasdaq Composite COMP -1.45%  fell 44.22 points, or 1.5%, to 3,011.33, leaving it down 2.3% from last week’s close."

"- Crude futures declined Friday after data showing a slowdown in China prompted concerns about oil demand. Crude futures for delivery in May CLK2 -0.77%  were down 81 cents, or 0.8%, at $102.83 a barrel on the New York Mercantile Exchange. The contract trimmed some of its losses as the floor session progressed, but ended the week off 0.5%."

"-May Soybeans finished down 4 1/4 at 1436 3/4.  May Soybean Oil finished down 0.71 at 56.52, 0.69 off the high and 0.12 up from the low.  Long liquidation selling was noted late in the day. Another serious set-back in the US stock market and a very strong US dollar this morning has helped to spark some speculative selling; thought to be long liquidation. Concerns with a slower than expected growth pace for China and debt concerns for Spain have helped turn outside market forces weaker. With open interest at a record high and overbought reading on technical indicators, traders remain concerned with a possible technical correction over the near-term. Private exporters reported the sale of 165,000 tonnes of US soybeans to China for the 2012/13 season. This is the third sale for the week with a total of 445,000 tonnes going to China. Taiwan is in the market for 40,000-60,000 tonnes of US or Brazilian soybeans for May to June shipment. This business should go to Brazil at this time of the year. "

FKLI- Hovering Within The Range.

Stock index rose marginally about 1.85 points to 1,603.12 while index futures ended slightly higher to 1,594.50 after gaping up to 1,604.50 in the morning session. After the index futures gaping up in the morning  session, profit taking activities quickly kicked in, the price just continue to dipped lower. There was less follow up Buying activities as most investors are still unsure about the earning results impact to local bourses.   Technically, the index futures is still trapped within the range 1,606~1,575 for the moment. Although there was no hard evidence to signifies major correction at the moment, market is hovering on congestion period. For today, equity index is likely open lower due to previous Friday weak finished market on the west and Europe. Major support is placed around 1,575 while resistance is located based on historical high at 1,606.

Daily Pivot Point
R2= 1608
R1= 1601
S1= 1590
S2= 1587

FCPO- First Bearish Weakness

After hovering on immediate support trend line until the afternoon session. Bulls suddenly gave up the fight and let the Bear dominate the rest of the session. Hence, the previous benchmark month, June contract dipped about RM49 to 3,510, just 5 points above the low at 3,505. Meanwhile, the new benchmark July has already dipped below 3,500, last Friday it dipped about RM43 to 3,497, the low of the day was 3,494. My initial assessment was previous Bulls have turned into Bears mostly  due to no follow up Buying activities after the benchmark July hit its 13-months high. Approaching to closing bell, panic Long holders who saw the price starting to tanked, might worsen the price corrections as they dumped their positions collectively. Technically, the benchmark July ended the week lower as market  begin its swift corrections since previous Thursday. Bears present will be significant when the price starting to breach below most support trend line and we are likely to similar scenario on last week, today. Palm oil futures is likely open weak due to Soy oil weakness as well. The palm oil rival product tanked about 0.71 cents to 56.52 cents per pound on last Friday. For today, support is located around 3,482 followed by 3,454 while resistance is pegged at 3,560.

Daily Pivot Point
R2= 3587
R1= 3542
S1= 3473
S2= 3449
 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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