Sunday, May 6, 2012

Market Overview 7th May 2012

Monday, 7th May 2012. The FBM KLCI continues record gain over the week amid strong blue chips share accumulation ahead of Malaysia general election and upcoming companies earning results. Other news to follow.

"-Wall Street ended its worst week this year with a sharp selloff on Friday after a slowdown in job creation in the world's top economy raised the biggest question mark yet about the prospects for U.S. growth. Employers reduced hiring for the third straight month, adding 115,000 workers in April, well below forecasts of 170,000. Traders' expectations had fallen during the week, but the softer jobs number missed even more pessimistic forecasts. For the week, the S&P 500 lost 2.4 percent, its worst weekly performance since December. Investors were also cautious ahead of elections in France and Greece over the weekend as European policymakers struggle to bring an end to their debt crisis and people rebel against the strain of austerity measures.The Dow Jones industrial average .DJI dropped 168.32 points, or 1.27 percent, to 13,038.27 at the close. The Standard & Poor's 500 Index .SPX lost 22.47 points, or 1.61 percent, to 1,369.10. The Nasdaq Composite .IXIC fell 67.96 points, or 2.25 percent, to 2,956.34.'

"-Asian shares fell Friday, with a sharp overnight drop in crude oil hitting energy names, ahead of the closely-watched U.S. nonfarm payrolls report. South Korea’s Kospi KR:SEU -0.30%  dropped 0.3%, while both Australia’s S&P/ASX 200 index AU:XJO -0.75% and Hong Kong’s Hang Seng Index HK:HSI -0.77% lost 0.8%. The Shanghai Composite Index CN:000001 +0.49%  moved in and out of positive territory before settling 0.5% higher, while Japanese markets remained closed for holiday."

"July Soybeans finished up 4 3/4 at 1478 1/4, 3 off the high and 20 1/4 up from the low. November Soybeans closed down 1 at 1366 3/4. This was 14 3/4 up from the low and 6 1/4 off the high. July Soybean Oil finished down 0.51 at 53.65, 0.75 off the high and 0.24 up from the low. July soybeans closed 4 3/4 cents higher on the session and closed 15 1/4 cents lower for the week. The lower close on the week after posting a contract high is seen as a negative technical development by some traders. Traders will be monitoring the weekly COT report this afternoon as the fund net long position has been at a record high for the last few weeks. Traders view the weather outlook as a negative force with 1-3 inches of rain this week for a wide portion of the Midwest which is helping to alleviate any dry spots ahead of the key growing season. July soybeans are already down as much as 54 1/2 cents from Wednesday's peak. Weakness in palm oil in the last two sessions helped to push soybean oil sharply lower with December oil pulling back to the lowest level since March 8th. 
FKLI- Recovery Inbound.

Stock index inches up for the second sessions yesterday supported by some speculative accumulation on blue chips counter name from BAT, IOI and Pet Chem counters. Equity indexes might have to go thru some turbulence if there was a bad economy data announce for this week. The economy is improving but not at a fast rate. Technically, the index futures is poised to recover further judging on the higher lows and higher highs candles formed on hourly chart shown above. Not only that, the May contract manage to breach above the immediate resistance trend line located around 1,578 on previous Wednesday last week. The sign for further recovery was also shown on 34 period exponential moving average that currently sloping positively. Although it is too early for us to target this recovery to breach previous all time high. For today, market should be open lower due to weak overnight performance on U.S market which fall due to disappointing jobs data on previous Friday. Traders may go Long if the index futures does retrace to the first daily pivot support level.

Daily Pivot Point
R2= 1593
R1= 1588
S1= 1577
S2= 1572

FCPO- Bears Have Begun.

CPO futures closed lower yesterday amid weak performance on its rival products for the past two weeks. There is less support for the market to go up as broader commodities prices such as crude oil, Soya bean and soya oil were also tanking at the moment. Volatility is spiking up on FCPO recently, signifying drastic volume couple with price chances. This could mean more volume and interest were conducted when the prices are going down. Market is poised to correct further this week as it manage to breached below the horizontal support trend line located at 3,440 plus lower highs and lower lows candles formed on hourly chart shown above. Comparable with both of the support and resistance tools used in trading, support area will consider as a futile area to go Long when any market is hovering on down trend as Sellers have no problem to continue Selling below this area. Moreover, things could get even worse if the stop losses for Long covering occur right below these support area. For today, second support level will be located around 3,302 while resistance is pegged at 3,390.

Daily Pivot Point
R2= 3422
R1= 3390
S1= 3330

 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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