Market Overview 27th Aug 2012

Monday, 27th AUg 2012. The FBM KLCI losses some ground last Friday due to profit taking after rising early last week. Other news to follow.

"- U.S. stocks tallied strong gains Friday, with the Dow industrials bouncing back following a four-session slide, after Federal Reserve Chairman Ben Bernanke said the U.S. central bank has more tools, if needed, to stimulate the economy. The Dow Jones Industrial Average DJIA +0.77% rose 100.51 points, or 0.8%, to 13,157.97, leaving it down 0.7% for the week. Off 0.5% from the week-ago close, the S&P 500SPX +0.65% gained 9.05 points, or 0.7%, to 1,411.13, with telecom the best-performing and the natural-resources sector the sole laggard of its 10 industry groups. The Nasdaq Composite COMP +0.54% rose 16.39 points, or 0.5%, to 3,069.79, leaving it 0.2% lower on the week."

"- Asian stocks took a sharp drop Friday, as investors grew gloomy about the health of the global economy and prospects for central-bank action, selling down commodity and technology shares.

Japan’s Nikkei Stock Average JP:100000018 -1.17%  lost 1.2%, South Korea’s KospiKR:SEU -1.17%  gave up 1.3% and Australia’s S&P/ASX 200 index AU:XJO -0.79%  lost 1%. Hong Kong’s Hang Seng Index HK:HSI -1.25%  dropped 1.2% while the Shanghai Composite Index CN:000001 -0.99%  slipped a more modest 0.7%."

"-Crude-oil futures ended lower Friday, ending a seesawing session with just enough to guarantee mild gains for the week amid worries about Europe and a stronger U.S. dollar.

Oil for October delivery CLV2 -0.16%  retreated 12 cents, or 0.1%, to settle at $96.15 a barrel on the New York Mercantile Exchange."

"November Soybeans finished up 16 1/2 at 1731 1/2, 5 3/4 off the high and 20 3/4 up from the low. January Soybeans closed up 18 1/4 at 1724 1/4. This was 20 1/2 up from the low and 4 1/4 off the high. December Soymeal closed up 7.5 at 522.8. This was 8.5 up from the low and 0.9 off the high. December Soybean Oil finished up 0.13 at 56.9, 0.41 off the high and 0.29 up from the low. November soybeans closed sharply higher on the day. Soybean meal and oil traded higher as well. Soybeans were dragged lower midsession by sharply lower corn and wheat action, but managed to hold onto sizeable gains into the closing bell. Traders continued to unwind calendar spreads after basis levels in the central Midwest and Gulf of Mexico slide lower on better farmer sales as new crop harvest approaches. Newswires reported that Taiwan has purchased 173,000 tonnes of US and Brazilian soybeans for November, March, and July shipment. The time period for the shipment reflects the concern major importers have in regards to the tightness in the global oilseed supply. This week's crop tour estimated the US soybean yield at 34.8 bushels/acre, plus or minus 2% vs. the USDA estimate of 36.1. Total production was estimated to be 2.6 billion bushels. The US Dollar traded sharply higher on the day which offered minimal resistance to price gains."

FKLI- Upside Momentum Still Intact, Watch Out For Signs Of Market Exhaustion.

Stock index slide down for some profit taking activities followed by index futures as well. Most of the traders prefer to square off some of their Long holding ahead of the weekend and awaits more hint over the development in European debt crisis and re-action on China economy that is slowing down at the moment. At close, the FBM KLCI loss about 3.39 points to 1,648.22 level while spot month index went down about 6 points to 1,648.50 level. Volume for the spot month was traded low around 2,924 lots. Resilient will be the keyword here as index futures may need more time to continue its rally. With the slow progress on European leader to come with a prudent solution to avoid the debt crisis and slowed down economy activity on mainland China, the FKLI would have to a few breaks while rallying. Technically, medium term perspective remain Bullish with the continues formation of higher highs and higher lows formation. Buyers continue to support the market when the market made some correction and strong enough to Buying force to breach the previous high last week. External market also continue to record tremendous gain with some of the Asia and U.S market manage to reached current year high. For today, pivot support for spot month contract located around 1,645 while resistance is pegged at 1,656.50 level.

Daily Pivot Point
R2= 1656.5
R1= 1652.5
S1=1645
S2=1641.5

FCPO- Stalling Recovery But Medium Term Positive Momentum Remain. 

Palm oil futures might be set up to retrace after surging for the past two weeks.The benchmark Nov ended up slightly to close the week at new monthly high. At close, it went up about RM8 to 3,069 level, market was hovering between 3,097~3,066 throughout the trading session. Bullish price action gradually went down on afternoon session for the past two days when the Buyers cover their position for profit taking. Palm oil price outlook was likely gained on improved demand as announced by independent cargo surveyors followed by better than expected price recovery for Soya bean and oil due to supplies concern. Intertek pegged the Aug 1-25th palm oil export up 5.70% at 1.08 millions tons. On technical perspective, the benchmark Nov is likely trading within a congestion condition at the moment as there were no new high formed from the past two session. Most of the sessions saw price gradually traded lower when the market approached closing bell. In another words, the opening bell was dominated by Buyers covering their positions while on the afternoon session, price is somewhat being controlled by Sellers. Although there were few lower high formation formed on the benchmark Nov hourly chart, medium term technical outlook remain Bullish. Overnight or longer term traders are advised to watch out for some prominent price level or support level to go Long after the price rebound from that area. For short term traders, daily pivot point is one of the guide to identified estimated market range for support and resistance. 

Daily Pivot Point
R2= 3108
R1= 3088
S1=3057
S2=3046
 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.