Wednesday, August 22, 2012

Market Overview 23rd Aug 2012

Thursday, 23rd Aug 2012. The FBM KLCI closed on stronger note yesterday as investors re-act positively on second quarter earning seasons. Other news to follow.

"-U.S. stocks finished little changed Wednesday after minutes from the last Federal Open Market Committee meeting showed discussion of a third round of quantitative easing. After an 83-point fall, the Dow Jones Industrial Average DJIA -0.23%  lost 30.82 points, or 0.2%, at 13,172.76. The S&P 500 index SPX +0.02%  rose 0.32 point to 1,413.49, with materials the best performer and industrials the worst of its 10 industry groups. The Nasdaq Composite COMP +0.21%  rose 6.41 points, or 0.2%, to 3,073.67."

"-Asian markets ended lower Wednesday, as investors assessed mining giant BHP Billiton’s first decline in annual profit in three years, while Japanese trade figures also weighed on sentiment. Japan’s Nikkei Stock AverageJP:100000018 -0.27%  traded down 0.3%.

South Korea’s Kospi KR:SEU -0.41%  lost 0.4%, and Australia’s S&P/ASX 200 indexAU:XJO -0.17%  declined 0.2%. The Asia Dow was down 0.6% late. In the Chinese markets, Hong Kong’s Hang Seng Index HK:HSI -1.06%  fell 1.1%, while the Shanghai Composite indexCN:000001 -0.50%  slipped 0.5%. Analysts in Hong Kong cautioned against reading too much into Wednesday’s action, saying seasonally low trading volumes were a factor in the weakness."

"-November Soybeans finished down 4 3/4 at 1727 3/4, 6 1/2 off the high and 12 1/4 up from the low. January Soybeans closed down 5 1/2 at 1715. This was 11 up from the low and 7 1/2 off the high. December Soymeal closed down 4.8 at 519.7. This was 3.9 up from the low and 6.1 off the high. December Soybean Oil finished up 0.61 at 56.83, 0.16 off the high and 1.16 up from the low. November soybeans traded lower into the closing bell and settled off session lows. Soybean meal was lower on the day but soybean oil traded sharply higher, posting a new high for the move. Soybeans continue to see support from strong export demand and questionable yields across the Corn Belt. News that Argentina grain and vegetable oil exports have been halted for 3 days due to a strike offered support to the grain and oilseed complex. The US Dollar traded slightly higher midsession which offered resistance to price gains but dovish comments by the FOMC turned the US Dollar lower and commodity prices recovered into the closing bell. Early yield reports from a large crop tour have been worse than expected for some areas, but rainfall and cooler temperatures in early August have benefited portions of the soybean crop. The trade feels the average US soybean yield could be near 36.5 bushels per acre vs. the August USDA estimate of 36.1. If attained, this could mean total supply for 2012/13 of 2.7 billion bushels."
FKLI- Bulls Still In Control.

Stock index and index futures manage to kicked off some new gains after it resume for trading yesterday. Investors are welcoming the second quarter earning announcement made by local major companies recently. Most of the companies that reported positive balance sheet are likely to have some nice gain on their respective stocks. At close, the FBM KLCI rose about 2.46 points to 1,652.25 level while the spot month contract went up about 3.50 points to 1,649 level. Both of the equities indexes touched all time high. Positive earning seasons will likely continue to fuel current Bullish sentiment but the concern on European debt crisis would weight down the performance on Asia major benchmark indexes. For this week, the spot month contract is likely continue to rally judging on previous higher lows formation and the ability to closed at the higher after it swiftly recovered from lower opening session. Again, no sight of major correction yet as there was no significant lower high candle formation, not even in hourly chart. Today, pivot point support for the spot month contract is located around 1,641 while resistance is pegged at 1,656.

Daily Pivot Point
R2= 1663
R1= 1656
S1= 1641
S2=1633

FCPO- Palm Oil Futures Hit All Time High !!

CPO futures for the benchmark Nov begin the opening session by gaping up about RM50 to 3,011. The better than expected opening value was likely contributed by massive price recovery from Soy oil recently. The surge on Soy bean oil was linked with short term robust demand from China, which saw about 9.5% increased on Soy imports. With these kind of price gap up in the opening session, Short holders will be force to cover their positions mostly due to margin call guide line. And Short covering will likely fuel the price to go up as traders have no choice but to Buy at the high. The Buying spree continue from the opening session till it closed. When the dust settle, the benchmark Nov surge about RM116 or 3.92% to 3,078, this happen to be the high of the day too. Market re-act positively to Soy oil positive price outlook when it resume fro trading  after a long holiday. Market is likely continue to recover judging from increased demand based on the growth on 1-20th Aug export figures. Technically, this recovery is known as a parabolic surge due to sudden shock to the market news or when the price hit some important support / resistance level. Traders are cautioned as this kind of rally can easily wipe off the next day if there is any massive price correction on Soy oil due to other bad news. For today, pivot point for the benchmark Nov is located around 3,022 while resistance is pegged at 3,118.

Daily Pivot Point
R2= 3118
R1= 3090
S1= 3022
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.

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