Sunday, July 8, 2012

Market Overview 9th July 2012

Monday, 9th July 2012. The FBM KLCI rose to historical high amid strong local fund accumulation on Genting counter and banking stocks despite global stock market outlook remain gloomy and uncertain. Other news to follow.

"- U.S. stocks closed lower Friday, with the Dow industrials and S&P 500 suffering losses for the week after a report on the U.S. labor market showed tepid, below-forecast growth in payrolls last month. The Dow Jones Industrial AverageDJIA -0.96%  fell 124.20 points, or 1%, to close at 12,772.47, tallying a 0.8% loss for the week. The S&P 500 Index SPX -0.94%  fell 12.90 points, or 0.9%, to 1,354.68, ending 0.6% lower for the week. The two benchmark indexes have now posted declines for two out of the last three weeks. The Nasdaq Composite IndexCOMP -1.30%  lost 38.79 points, or 1.3%, to 2,937.33. It climbed 0.1% on the week to score its fifth-straight weekly gain."

"-Most Asian markets fell Friday after a flood of action by central banks highlighted the depth of concern for the global economic outlook, and as a key U.S. jobs report due later in the day kept investors cautious. South Korea’s Kospi KR:SEU -0.92%  dropped 0.9% Japan’s Nikkei Stock AverageJP:100000018 -0.65%  shed 0.7%, and Australia’s S&P/ASX 200 index AU:XJO -0.27%  fell 0.3%. Taiwan’s Taiex XX:Y9999 -0.26%  shed 0.3% and Hong Kong’s Hang Seng IndexHK:HSI -0.04%  ended little changed from the previous day’s close. China’s Shanghai Composite Index CN:000001 +1.01% jumped 1% as a spike in real estate and automobile stocks after the interest rate cut offset losses in banking shares. Most regional indexes ended the week on a positive note, however, with the Hong Kong’s Hang Seng Index finishing 1.9% higher, and Australia’s S&P/ASX 200 rising 1.5%. But China’s Shanghai Composite diverged, dropping 0.1% during the week despite Friday’s gains.

The day’s broad losses followed a negative lead from Wall Street after weak U.S. services data, with the Chinese interest rate cut in particular raising worries about a slew of economic data due next week."


"-August Soybeans finished down 15 3/4 at 1567 1/4, 15 3/4 off the high and 5 1/2 up from the low. November Soybeans closed down 20 3/4 at 1505 3/4. This was 1 1/4 up from the low and 20 1/4 off the high. August Soymeal closed down 4.3 at 461.5. This was 0.7 up from the low and 5.8 off the high. August Soybean Oil finished down 0.89 at 53.44, 0.96 off the high and 0.07 up from the low. November soybeans traded moderately lower heading into the late afternoon trade. Soybean meal and oil both followed soybean sharply lower to end the week on a back foot. Weather maps show a break from the record temperatures next week with a chance for better rainfall in the southeast and delta. A large percentage of the expected precipitation over the next two weeks will likely be light and overall coverage will have limited impact on soil moisture conditions. The precipitation in the southern U.S. and delta should help soybean crop conditions. Another private analyst revised their average soybean yield lower at 42 bushels/acre vs. their June estimate of 42.7 bushels/acre. August soybeans gained on the September and November options after the USDA reported that U.S. exporters sold 120,000 tonnes of soybeans to China for the 2011/12 marketing year. Export sales for the week ending June 28th, came in at 298,700 tonnes for the 2011/12 marketing year and 1,464,700 tonnes for 2012/13 for a total of 1,763,400 tonnes. This was more than the double the size of the high end of trade expectations. Cumulative soybean sales stand at 103.6% of the USDA forecast for 2011/2012 (current) marketing year vs. a 5 year average of 99.8%. Net soybean meal sales came in at 156,700 tonnes for 2011/12 marketing year and 21,100 tonnes for the 2012/13 marketing year for a total of 177,800 tonnes. Net soybean oil sales came in at 6,800 tonnes for the current marketing year and none for the 2012/13 marketing year, for a total of 6,800 tonnes. Weakness in soybeans was also due to a surging U.S. Dollar and broad based commodity pressure. The market is expecting a very volatile trade next week with updated Crop Condition reports on Monday and the USDA Supply and Demand and Crop Production reports on Wednesday."
FKLI- Upside Continues With Historical High

It was a historical moment when the market hit fresh new high, never seen before level at 1,620.55 for the FBM KLCI and 1,624 level for the index futures spot month contract. Despite having an average trading volume on the index futures, market seems to have everything it need to surge above the record high. Rising for the fourth session continuesly, the stock index continue to surge about 6.12 points to 1,620.55 while index futures rose about 6 points to 1,624. All equity index went up to close at historical high, the highest so far after the exchange established. The uptrend is now more established setting the record higher. Second quarter earning results announcement on U.S equity market will likely serve as market headlines for upcoming week. Technically, as uptrend momentum is still intact, market will have more gas to go up rather than to go down at the moment. Moreover, uptrend are re-affirmed with the Bullish formation of higher lows and higher highs created after the market made a new high again last Friday. For traders who missed out their Long set up and wish to trade counter trend when the market retrace for profit taking, price action is likely serve better guide than using oscillator reading to identify Bearish divergence or oversold level. I.e, a lower high and lower low on 15 minutes chart or short term Bearish formation signifies that market is likely to retrace further as Sellers successfully force the price to breach certain support level. For today, upside potential is likely capped at 1,628 due to weaker overnight performance on U.S equity market due to negative job data while support is located around 1,611.

Daily Pivot Point
R2= 1632
R1= 1628
S1= 1621.5
S2= 1611

FCPO- Some Mild Retracement 

CPO futures retrace on previous Friday, giving way for profit taking activities. The benchmark Sept corrected about RM34 to 3,130 after disappointing ranging futures price movement from Soya oil which resume its trading session on previous Friday. Market is now hovering on technical retracement after the price fail to swing to higher ground when it rose close to 3,180 level. Bearish candle formation is now visible on the hourly chart above, signifying impending weakness for the upcoming session. Things could be very different if the benchmark Sept breach below the short trend support line around 3,100 level. If this event materialize, further downside is expected as stronger Bearish formation will be formed. Else if the market re-act positively to the short term support trend line and rebound off that level, chances for us the see steady market recovery is just around the corner. Meanwhile sentiment on palm oil outlook is likely to improve judging on seasonal Ramadhan celebration as demand will picked up mostly on India, China and Indonesia. For today, pivot support level is located around 3,100~3,109 while resistance is pegged at 3,167.

Daily Pivot Point
R2= 3204
R1= 3167
S1= 3109
S2= 3088
 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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