Market Overview 28th June 2012

Thursday, 28th June 2012. The FBM KLCI manage to return to profitability yesterday as Malaysia stock market prepare for local Felda Venture Global mega listing exercise soon. Other news to follow.

"-U.S. stocks on Wednesday rose for a second day, with the Dow stringing together its first two-day winning run in more than a week after positive economic data. "Most of the housing data has been another source of positive news, meeting or often beating expectations by a little bit and showing a troubled area of the economy shoring up and becoming healthier again," said Bruce McCain, chief investment strategist at Key Private Bank. The Dow Jones Industrial Average DJIA +0.74% added 92.34 points, or 0.7%, to 12,627.01. The S&P 500 SPX +0.90%rose 11.87 points, or 0.9%, to 1,331.85. The Nasdaq Composite COMP +0.74% climbed 21.26 points, or 0.7%, to 2,875.32."

"-Asian stocks recovered from lackluster early Wednesday action to finish mostly higher, with Hong Kong leading the region amid some buying by funds, though volume remained light ahead of a key European summit. Hong Kong’s Hang Seng Index HK:HSI +1.03%  rallied 1% after spending time in negative territory. The Shanghai Composite index CN:000001 -0.23%  still fell 0.2%.

Japan’s Nikkei Stock Average JP:100000018 +0.77%  rose 0.8%, while Australia’s S&P/ASX 200 index AU:XJO +0.75% gained 0.5%. South Korea’s Kospi KR:SEU -0.0088%  bucked the trend with a fractional loss, as a possible strike weighed on auto stocks."


"-Crude-oil futures ended higher Wednesday, supported by a weekly U.S. supply report showing a decline in inventories and favorable U.S. macroeconomic data.

Crude oil for August delivery CLQ2 +0.47% advanced 85 cents, or 1.1%, to $80.21 a barrel on the New York Mercantile Exchange."

"-August Soybeans finished up 1/2 at 1456, 25 1/2 off the high and 4 up from the low. November Soybeans closed down 1 1/4 at 1412. This was 3 1/4 up from the low and 27 3/4 off the high. August Soymeal closed down 0.5 at 423.7. This was 1.9 up from the low and 6.3 off the high. August Soybean Oil finished up 0.48 at 51.54, 0.39 off the high and 0.72 up from the low. Soybeans were trading slightly lower towards the end of the day. November soybeans posted new highs for the move and new contract highs before retreating to the bottom end of today's range. August soybean oil traded 44 cents higher while August soybean meal traded 20 cents lower. Speculative profit taking and producer selling was noted, ahead of the USDA reports for Friday. Soybean futures pushed higher this morning on a scorching heat forecast and support from the corn market. Weather forecasts call for 100 degree temperatures for the central and southern Midwest today and tomorrow. The two week weather forecast calls for above normal temperature and below normal rainfall for most of the Soybean Belt. The trade continues to monitor crop and weather conditions but expect further deterioration in the new crop soybean yield if weather patterns in July reflect those of June. The U.S. Dollar and stocks are trading higher midday ahead of the European Summit on Thursday. The USDA will release its Grain Stocks and Planting Intentions on Friday. Traders will key off the soybean planted acreage report but will likely believe that the acreage estimate from the USDA will be too high as many parts of the Midwest will not be able to double crop soybeans over harvested wheat due to topsoil dryness. Traders are penciling in an increase of 1.6 million acres. The March report estimated planted acreage at 73.9 million acres."

FKLI- Recovery Continue

Malaysia stock index manage to surge ahead of mega listing exercise which will happen on 28th June and it should stimulate more positive sentiment for the market to recover further. Both stock index and index futures closed at the high of the day, signifying strong accumulation activity throughout the session. Technically, the medium term uptrend hovering on index futures and stock index are still good after the formation of higher lows. These higher lows and higher highs formations are crucial to decide whether the market is able to rebound after some correction. In other words, Buyers manage to step in and continue to accumulate their Long holding after the price fell cheaper. Moreover, these formations are also very common sight in a healthy uptrend market. For today, positive momentum is expected to continue judging on price formations so far. Pivot point for support is located around 1,595.50 while resistance is pegged at 1,613.50.

Daily Pivot Point
R2= 1613.5
R1= 1609
S1= 1595.5
S2= 1586.5

FCPO- Closed Lower But Still Travel In The Range

FCPO Hourly Chart

FCPO 15 minutes Chart

CPO futures retrace due to lack of fresh positive news yesterday and Soy oil futures does not rise much from it previous point. The benchmark Sept went down about RM16 to 3,016 on yesterday closing bell, the high and low of the day were 3,043 and 3,004. Soy oil futures recovered about 0.19 cents to 51.25 cents per pound during Asia time, 6.11PM +8GMT. Technically, the benchmark Sept failed to make much progress after it gap up on the 20th June amid sudden surged on Soy oil. The Sept contract could not breach above previous high at 3,060 and had travel around 3,050~3,004 after the gap up. To sum up, the price went lifeless after it gapped up previously, instead of breaking out the previous high it went down and hover within a sideways movement. This signifies that the Buyers are not keen nor ready to commit and Buy above previous high level, most of the them prefer to cash out their profit while they still can and stay off the market. Overall, FCPO medium term perspective is likely to remain sideways unless either one of the immediate support or resistance trend line is breach. Meanwhile, after breaching the immediate support on the 15 minutes time frame chart, market is likely to correct further judging on short term perspective. For today, support is likely located around 2,982 while resistance is pegged at 3,058.

Daily Pivot Point
R2=3060
R1=3058
S1=2999
S2=2982
 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.