Market Overview 11th May 2012

Friday, 11th May 2012. The FBM KLCI ended slightly higher yesterday but concern over European debt crisis escalated. Other news to follow.

"- U.S. blue-chip stocks broke their longest losing streak in nine months Thursday, helped by a dip in jobless claims and signs of stabilization in Europe, but a steep drop in Cisco Systems Inc. helped send the Nasdaq Composite Index lower.

After a six-session string of losses, the Dow Jones Industrial Average DJIA +0.16%  rose 19.98 points, or 0.2%, to 12,855.04. At its highs, it rose more than 96 points. The index rapidly lost ground in the last hour, briefly turning lower. The S&P 500 Index SPX +0.25%  also ended up but off its highs of the day, gaining 3.41 points, or 0.3%, to 1,357.99. Utilities rose the most of the index’s 10 sectors, while tech was one of only two sectors lower. The Nasdaq COMP -0.04%  ended down 1.07 points, or 0.04%, at 2,933.64, its third straight loss.

"- Hong Kong stocks dropped for a sixth straight session to lead some major Asian markets lower Thursday as China’s export and import figures disappointed and European debt worries remained in focus. Hong Kong’s Hang Seng Index HK:HSI -0.51%  dropped 0.5% to 20,227.28 and South Korea’s Kospi KR:SEU -0.27%  fell 0.3% to 1,944.93, while Japan’s Nikkei Stock AverageJP:100000018 -0.39% lost 0.4% to 9,009.65 as investors digested a raft of corporate earnings reports. China’s Shanghai Composite CN:000001 +0.07% finished 0.1% higher at 2,410.23, recovering a little after a three-day losing streak that included a 1.6% decline Wednesday. But the CSI 300 index, a benchmark of large-capital stocks listed in Shanghai and Shenzhen, slipped marginally to 2,657.21. Elsewhere, Australia’s S&P/ASX 200 index AU:XJO +0.48%  rose 0.5% to 4,295.60 and Taiwan’s Taiex XX:Y9999 +0.11%  gained 0.1% to 7,484.01."


"-July Soybeans finished up 25 at 1455 1/4, 3 1/2 off the high and 25 3/4 up from the low.  July Soybean Oil finished up 0.68 at 53.5, 0.15 off the high and 0.6 up from the low. July and November soybeans closed sharply higher on the day but closed off of the early-in-the-day highs. The USDA confirmed a very tight outlook for the coming season. The USDA pegged US ending stocks for 11/12 at 210 million bushels, which was slightly supportive against expectations and compares with 250 million estimated last month. For the 2012/13 season, ending stocks are projected at just 145 million bushels which is 20 million below expectations and is the lowest May estimate since 1988. November soybeans pushed sharply higher early in the session trading as much as 34 1/2 cents higher on the day. World ending stocks for the 2011/12 season came in at 53.2 million tonnes which was right on expectations and compares with 55.52 million last month and down from 70.1 million last year. Brazil production came in at 65 million, down from 66 million last month and Argentina was revised down to 42.5 million from 45 million last month. However, the Brazil agriculture ministry this morning revised their crop estimate higher to 66.7 million tonnes from 65.6 as their previous forecast. Weekly export sales for soybeans came in better than expected at 466,500 metric tonnes for the current marketing year and 1.36 million tonnes for the next marketing year for a total of 1.827 million. "


FKLI-Congestion At The Moment

Stock index and index futures rose marginally yesterday as investors grew cautious about global economy recovery and growing concern over European debt crisis. It is going to be a tough session for at least another week as both of the stock index are likely to hover within a congestion condition. Market will be travelling within a specified range unless it is broken away from that range. Traders could use daily first pivot level of support and resistance in order to identify that range. Technically, market is heading into a sideways trading period but with upside bias judging from previous higher lows formed on hourly chart. Pre-election rallies might come into picture when there is announcement made. For today, support is located around 1,578 while resistance is pegged at 1,588.

Daily Pivot Point
R2= 1588
R1= 1585
S1= 1578
S2= 1574

FCPO- Travelling Within The Cage, Again. 

"Volatile" trading sessions were the headlines for the past few sessions as palm oil futures tend to fluctuate actively from the day high and day low. The same conditions were also sighted on Soya oil where the most actively traded contract rose about 0.55 cents to 53.37 cents during Asian trading session, 6.08PM +8 GMT yesterday. Back to local market, the benchmark July ended RM14 higher to 3,349, the day high and low was 3,384 and 3,330. Based on MPOB and  independent cargo surveyors report, palm oil fundamental appear negative for the month of April and traders were also expecting bad export figures for the month of May as well. Market is likely hovering within the cage or range highlighted on hourly chart above for the moment. Short term trend remain Bearish as there is no sign of recovery yet and as long as there is no higher low and higher high form on hourly chart, market recovery will be out of the sight. Conclusively, market is still susceptible for further market correction if the the benchmark July manage to break down from the lower range / support around 3,310 level.

Daily Pivot Point
R2= 3408
R1= 3378
S1= 3324
S2= 3300
 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.