Thursday, May 24, 2012

Market Overview 25th May 2012

Friday, 25th May 2012. The FBM KLCI halt previous two session weakness as it recovered yesterday despite weaker performance on regional index. Other news to follow.

"-U.S. stocks made a late-session reversal Thursday, with investors whipsawed by headlines on how committed European leaders were to keeping Greece in the euro zone. Tech stocks, with the notable exception of Hewlett-Packard Co., fell after recent earnings reports fed concern over corporate IT spending. The Dow Jones Industrial Average DJIA +0.27%  ended up 33.60 points, or 0.3%, to 12,529.75. Hewlett-Packard HPQ +3.27%   shares rose 3.3%, leading gains for 21 of 30 components. The S&P 500 Index SPX +0.14%  ended up 1.82 points, or 0.1%, at 1,320.68, with consumer-staples stocks the best performing and technology the worst among its 10 sectors.  The Nasdaq Composite Index COMP -0.38%  dropped 10.74 points, or 0.4%, to 2,839.38."

"-Most Asian markets fell after a choppy trading session Thursday as data showed the Chinese manufacturing sector remained soft in May and as European leaders remained divided on steps to address the region’s debt crisis. Hong Kong’s Hang Seng Index HK:HSI -0.64%  fell 0.6% and the Shanghai CompositeCN:000001 -0.53% gave up 0.5%, while Australia’s S&P/ASX 200 index AU:XJO -0.28%  and Taiwan’s Taiex XX:Y9999 -0.32%  declined 0.3% each. apanese and South Korean stocks climbed on bargain buying in the two markets, which rank among the worst performing in the region so far this month. The Nikkei Stock AverageJP:100000018 +0.08% reversed losses in the final hour to end 0.1% higher, and the Kospi KR:SEU +0.32% climbed 0.3% in Seoul. "

"-July Soybeans finished down 16 1/2 at 1346, 41 3/4 off the high and -21 1/2 up from the low. November Soybeans closed up 18 3/4 at 1276 1/2. This was 13 1/2 up from the low and 9 off the high. July Soymeal closed up 6 at 411.8. This was 5.7 up from the low and 2.5 off the high. July Soybean Oil finished up 0.59 at 49.5, 0.2 off the high and 0.58 up from the low. July soybeans closed moderately higher on the session but well off of the peak. Weakness in corn and less support from outside forces late in the day helped to limit the advance. November closed up 18 1/2 cents. A more positive tilt to outside markets early today with a recovery in gold, crude oil and other agriculture markets helped to support. The 99 cent break in 5 trading sessions may have left the market a bit oversold and traders believe that the break has already absorbed the improved weather outlook for next week. The Buenos Aires Grains Exchange cut its estimate for production to just 39.9 million tonnes from 41 million previous and this news helped support. Net weekly export sales for soybeans came in at 800,100 metric tonnes for the current marketing year and 153,600 for the next marketing year for a total of 953,700 which was about as expected. As of May 17th, cumulative soybean sales stand at 100.3% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 97.5%. The data suggests that the USDA may be in a position to raise their export forecast for the June update. Net meal sales came in at 144,600 metric tonnes for the current marketing year and 32,000 for the next marketing year for a total of 176,600. Old crop sales of 77,000 tonnes are needed each week to reach the forecast. Oil sales came in at 9,400 metric tonnes for the current marketing year and 15,000 for the next marketing year for a total of 24,400. Old crop sales of 6,000 metric tonnes are needed each week to reach the USDA forecast. The Chinese government sold 188,410 tonnes of the 605,356 offered out of their reserve."

FKLI- All Eyes On Resistance Level 

Stock index manage to recover as heavy accumulation on heavyweights counters such as Tenaga and Maybank. Whether this recovery is just temporary or not, we will just have to see if the index futures manage to climb back above 1,500 level. Sentiment on the stock market remain gloomy at the moment as China's manufacturing data is showing sign of slowing down and so does other major economy in the west plus Europe. Buying interest will greatly enhance if the index futures manage to breach important resistance level above 1,500. Technically, medium term trend still suggest Bearish momentum but it could be overturn if the index futures continue to breach above today's pivot resistance level above 1,547. Pivot support is located around 1,535.

Daily Pivot Point
R2= 1547
R1= 1544
S1= 1535
S2= 1529

FCPO- Sell-off Stopped For The Moment. 

Selling spree has stopped, maybe at least for the moment as recover on the Soya oil helped to spur palm oil price to recover yesterday. Even though palm oil futures recovered about RM50 to 3,069, we are still far from expecting the market to turn into Bullish momentum this month. It would need extreme good news or refresh Buying commitment from the foreign hedge fund companies on major commodities (which is unlikely after data showed there was $18 billion Long liquidation carried out by hedge fund companies last two week. Palm oil prices maybe capped from falling further in the month June-July as demand will improve for the upcoming Hari Raya festival. Technically, the benchmark Aug is preparing to recover further judging from yesterday Bullish candle. Buyers were presence from the opening session until the closing session as market manage to closed just six points below the day high. If there is no further or sudden overnight Sell-off on Soya bean and Soya oil, palm oil futures is likely continue to recover today. Pivot point for support is located around 3,021 while resistance is pegged at 3,123.

Daily Pivot Point
R2= 3123
R1= 3096
S1= 3021
S2= 2973
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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