Sunday, July 15, 2012

Market Overview 16th July 2012

Monday, 16th July 2012. The FBM KLCI closed on higher ground amid strong accumulation activities throughout the week. Other news to follow.

"- U.S. stocks rose sharply Friday, lifting the Dow industrials and S&P 500 into positive terrain for the week, as bank shares rallied after J.P. Morgan Chase & Co.’s second-quarter results. The Dow Jones Industrial AverageDJIA +1.62%  rose 203.82 points, or 1.6%, to 12,777.09. The index is up 0.04% from last Friday’s close. Also erasing its weekly decline, the S&P 500 indexSPX +1.65%  climbed 22.01 points, or 1.7%, to 1,356.77, with finance companies pacing the gains that included all 10 of the index’s sectors and left it up 0.2% from last Friday’s finish. The Nasdaq Composite COMP +1.48%  advanced 42.28 points, or 1.5%, to 2,908.47, off 1% for the week."

"-Asia stocks moved higher in a choppy session on Friday, as investors absorbed a slew of Chinese data, including figures showing the nation’s economy grew in line with expectations during the second quarter of 2012.  South Korea’s Kospi KR:SEU +1.54% jumped 1.5%, Australia’s S&P/ASX 200 indexAU:XJO +0.35%  put on 0.4% and Hong Kong’s Hang Seng Index HK:HSI +0.35%  added 0.4%. Japan’s Nikkei Stock Average JP:100000018 +0.05%  rose 0.1%, while China’s Shanghai Composite CN:000001 +0.02%  ended fractionally higher. China’s economy expanded 7.6% in the second quarter from a year earlier, broadly in line with expectations of economists surveyed by Dow Jones Newswires.

"-Soybean trade has rebounded off overnight weakness, now trading 18 to 22 higher. Meal is $6 to $7 higher and bean oil is up 40 to 50 points. There are scattered showers in some stressed areas overnight, but must more is needed to keep the crop from slipping further, or even holding steady at the low 40% good to excellent ratings we saw Monday afternoon. The $15.75 level will be the new crop contract resistance for now, with support at $15.00, and $14.93. NOPA crush is estimated at 132.8 million, and that will be released on Monday. China sold approximately 390,000 metric tons out of state reserves. The USDA accounced 150,200 metric tons of soybean sales to an unknown destination. August beans reached $16 this morning, if we can get back to that level expect possible big short covering into the close this afternoon. "

FKLI- Looking At How Far This Temporary Retracement Could Go. 

Stock index and index futures manage to sustain and close on higher territory last week. This will be the highest weekly settlement value for both market. On previous Friday, the FBM KLCI rose marginally to 1,626.38 level while July contract went up about 3 points to 1,626.50. The short term development on technical perspective for  July index futures was currently running on sideway, most traders are waiting for more Bullish price action before jumping up on the Long bandwagon. The retracement occur on previous Thursday will be the first weakness we seen so far after the market went up for at least three weeks. We shall expect higher low to formed if the index futures manage to rise above 1,630 level this week, or there would be further retracement if the market choose to retrace below 1,620 level. Although market is susceptible to further weakness if it breach below 1,620 level, based on immediate support trend line, market weakness is likely halt around 1,615 level.

Daily Pivot Point
R1= 1629
S1= 1623
S2= 1620

FCPO- Recovered On Last Minute But Downside Risk Still Presence

CPO futures surged along with Soya oil recovery on previous Friday after investors were spooked by sudden price sell-off on previous Thursday due to weak palm oil demand. Commodities market is very sensitive on absorbing news and how traders re-act to those news are always subjective.There is no way to accurately find how much impact on a single or combine news that would effect the market. This is due to, some popular watched or some important news that is suppose to heavily effect the market does not react such way when it is announced, i.e: monthly interim export figures. But it is not wise to draw conclusion that news is useless on determining the direction of the market because news like weather announcement and other seasonal occasion will likely directly effect the cycle of demand and supply. Technically, further recovery is expected to sustain as the benchmark Sept manage to rally and close at the high on previous Friday. Although the higher low formation was formed smaller time frame (on 15 minutes chart above) it will be sufficient to indicate where is the market direction for short term basis. Things would be different if the traders was looking at higher time frame such as hourly or daily chart, the rally made on previous Friday was just merely a technical rallies in a Bearish market. Short and medium term technical perspective would change if the benchmark Sept manage to breach above the immediate resistance trend line shown above. Else we will expecting more ranging session if the benchmark Sept retrace back to today pivot support at 3,029 level.

Daily Pivot Point
R2= 3100
R1= 3081
S1= 3029
S2= 2996

 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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