Thursday, June 7, 2012

Market Overview 8th June 2012

Friday, 8th June 2012. The FBM KLCI went up for third session yesterday, marking strong Bullish sentiment over the recovery of economy recently. Other new to follow.

"-Asian stocks jumped on Thursday, extending gains made in the previous session, as investors hoped for U.S. and European monetary easing to counter growing economic woes. Japan’s Nikkei Stock Average JP:100000018 +1.24%  rose 1%, South Korean investors returned from a one-day break to push the Kospi KR:SEU +2.56%  up 2.7%, while Australia’s S&P/ASX 200 index AU:XJO +1.31%  climbed 1.4%. The Australian and South Korean markets both returned to positive territory for the year with Thursday’s move, along with Taiwan’s Taiex index. In China, Hong Kong’s Hang Seng Index HK:HSI +0.85%  jumped 1.4%, and the Shanghai Composite index CN:000001 -0.71%  advanced 0.2%. The moves in Asia came after U.S. stocks surged to their best one-day performance so far this year after signs that the European Central Bank is open to an imminent rate cut and on hopes for fresh easing from the Federal Reserve."
FKLI- Extending Gains, Previous High Remain Temporary Resistance. 


Local stock index extending its gain again yesterday amid better than expected performance on U.S stock market. Raising over 2% on the Dow industrials overnight, traders are very much optimistic about the opening on index futures. As a results, the June contract manage to open gap up at 1,580.50 level, leaping about 8 points compare to previous Wednesday closed. Unfortunately, market losses positive momentum and retrace after that as it hit the previous resistance level or previous high around 1,580. Whatever the reasons are, FKLI is hovering on positive momentum currently judging from promising higher low candles formation spotted on hourly chart but it is currently capped at around 1,580 level. One important note, traders are advised to pay attention on the previous high or previous resistance level around 1,580 level as this will serve as a good point to take Short position if the index futures does test (invalid if it gone above 7 points from 1,580) and retrace below this level. For today, support is located around 1,564 while resistance is pegged at 1,580.

Daily Pivot Point
R2= 1590
R1= 1580
S1= 1564
S2= 1558


FCPO- Three Days Gain, Wipe Out In Afternoon Session. 

CPO futures retrace for the first time after recovering for the past two sessions amid some weakness on Soya oil during Asia trading session. Traders got spooked on the afternoon session when the most active traded Soya oil corrected slightly below 49 cents per pound but recover right after that. At closed, the benchmark June ended RM29 to 2,974, the day high and low was 3,039~2,944 level. Conclusively, the gain made on previous three session including a gap up on morning session yesterday were wipe out in one afternoon session. This signifies that the Bearish sentiment on the palm oil market is here to stay even though there are fundamental that suggest the downside potential on palm oil prices are limited due to low stockpiles  alone. Technically, medium term direction remain negative where palm oil prices are still susceptible for another wave of Sell-off if there is no supportive recovery from Soya oil or other broader commodities prices. Trades can expect massive wave of Selling pressure if the benchmark Aug manage to breach below 2,940 level, if this even materialize, the next psychological support is located at 2,900 level. For today, upside potential is limited around 3,027 level while immediate support is located at 2,932 level.


Daily Pivot Point
R2= 3080
R1= 3027
S1= 2932
S2= 2890

 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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