Sunday, April 1, 2012

Market Overview 2nd April 2012

 Monday, 2nd April 2012. The FBM KLCI closed at the high this year by gaining up to 1,596 level on previous Friday which due sudden accumulation on blue chips counters. Other news to follow.

"-U.S. stocks on Friday netted their biggest first-quarter rise in more than a decade after a better-than-anticated increase in consumer spending and sentiment raised views of the economy.  Up 8.1% for the quarter, the Dow Jones Industrial Average DJIA +0.50% rose 66.22 points, or 0.5%, to 13,212, sealing its best first-quarter point gain in its history. The S&P 500 SPX +0.37% gained 5.19 points, or 0.4%, to 1,408.47, garnering its biggest first-quarter advance since 1998. The Nasdaq Composite COMP -0.12% fell 3.79 points, or 0.1%, to 3,091.57, leaving it up nearly 19% for the first quarter."

"- Most Asian stocks finished with minor losses after moving off session lows Friday as a strong quarter for regional equities drew to a close. Both the Hang Seng Index HK:HSI -0.26%  and the Nikkei Stock Average JP:100000018 -0.31%  fell 0.3%, while the South Korean Kospi index KR:0100 -0.02%  finished fractionally lower. The Australian S&P/ASX 200 index AU:XJO -0.06% fell 0.1%. On the upside, the Shanghai Composite Index CN:000001 +0.47%  managed to claw back a portion of recent losses to gain 0.5%. Next week, stock markets in mainland China will be closed for much of the week for holiday-related celebrations."

"- Crude-oil futures ended modestly higher Friday, but that was enough to send quarterly gains to 4.2%. Crude for May delivery rose 24 cents, or 0.2%, to settle at $103.02 a barrel on the New York Mercantile Exchange, ending a three-day losing streak for oil futures."

"-May Soybeans finished up 47 1/2 at 1403, 13 off the high and 49 1/2 up from the low.  May Soybean Oil finished up 1.51 at 55.1, 0.25 off the high and 1.41 up from the low. May soybeans closed 47 1/2 higher on the session and up 37 1/4 for the week. The rally pushed the market to the highest level since September 14th. The much lower than expected acreage helped spark aggressive buying in new crop soybeans to drive November soybeans as much as 65 1/4 cents higher in early trade. November soybeans closed 53 1/4 cents higher. Planted acreage came in at just 73.9 million acres, which was well below trade expectations for 75.4 million. Iowa plantings were down 550,000 from last year and plantings were down 200,000 from last year in Indiana, Minnesota and Nebraska. The USDA pegged March 1st stocks at 1.372 billion bushels compared with trade expectations at 1.39 billion. With the surge in expected demand for US soybeans due to crop losses in South America, traders believed that planted area needs to increase to 76 or 77 million. The USDA also confirmed a sale of 120,000 tonnes of US soybeans to unknown destination."

 FKLI- Incredible Rallies So Far. 

Stock index manage to end the first quarter in excellent shape by gaining up to current year high. The FBM KLCI rose about 10.89 points or 0.69% to 1,596.33 level, closing at the day high while the March contract settle 10.50 points higher to 1,594.50 level. Unfortunately, the April contract did not trail closely with its spot month contract, aggressive profit taking activities dominate the closing hour and cause it to close only 3.50 points higher to 1,586. That was 12 points discount vs the March contract when it settled on previous Friday. Contrary on most traders would like to believe, spot and forward month derivative are closely tracking each other, the reality is it could fluctuate freely at its on will. Derivative's Futures can flow independently premium and discount against cash composite at any time as well. Technically, the new spot month contract uptrend is still intact even though it has significant retracement on previous Friday. In other words, there are more higher lows and higher highs rather than lower high and lower lows formations. Windows dressing or not, the April contract is likely breaching 1,600 level soon from positive sentiments on local equity index. For today, support is likely located around 1,579 while resistance is pegged at 1,596~1,600 level.    

Daily Pivot Point
R2= 1596
R1= 1590
S1= 1579
S2= 1575

 FCPO- Some Healthy Correction

CPO futures was traded lower for the third successive session on previous Friday, the same goes for Soya oil which retrace on Thursday overnight. The market is having some temporary profit taking activities for the past week and Buyers are likely accumulating more after positive outcome from full month export report from cargo surveyors and abroad USDA report. Technically, volume and open interest were recorded lower when the market dipped for the past two sessions, signifying exhausting Bears on the way down. Fortunately, the benchmark June does not free fall from previous session as market was supported by improved demand expectation for the upcoming export data this coming Monday. For this near term, palm oil price is likely to resume its preceding uptrend judging on better than expected recovery by Soya oil that surged 1.51 cents at 55.10 cents per pound due to lower than expected planting acreage for Soya bean in America and crop losses in South America as well. If anything goes wrong, price correction on Soya bean products will be limited by supplies concern. For today, support is located around 3.424 while resistance is pegged at 3,453.

Daily Pivot Point
R2= 3453
R1= 3443
S1= 3424
S2= 3415
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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