Wednesday, October 17, 2012

Bad Sentiment Limit Palm Oil Outlook 18th Oct 2012

Thursday, 18th Oct 2012. The FBM KLCI surged yesterday amid strong accumulation activity over various sectors namely banking, Maybank and HLFG. Other news to follow.

"-U.S. stocks rose on Wednesday after data showed new-home construction at a four-year high, offsetting disappointing results from technology bellwethers. Up for a fourth consecutive session, its longest win streak in nearly five weeks, the Dow Jones Industrial AverageDJIA +0.04% gained 5.22 points to 13,557, with 23 of its 30 components rising.The S&P 500 index SPX +0.41% added 5.99 points, or 0.4%, to 1,460.91 as utilities performed the best and tech stocks fared the worst among the 10 major industry groups. The Nasdaq Composite COMP +0.10%advanced 2.95 points, or 0.1%, to 3,104.12."

Always have enough ammunition to fire when you needed.

"-Asian markets rose Wednesday as the financial, shipping and resource sectors got a lift after a set of upbeat results boosted stocks on Wall Street overnight, with Japanese shares rallying into a third straight session. The Nikkei Stock Average JP:100000018 +1.21% JP:100000018 +1.21% jumped 1.2%, stretching this week’s gains to 3.2%, and Hong Kong’s Hang Seng Index HK:HSI +0.99% HK:HSI +0.99%climbed 1%. South Korea’s Kospi KR:SEU +0.70% KR:SEU +0.70% advanced 0.7%, Australia’s S&P/ASX 200 index AU:XJO +0.82% climbed 0.8% and China’s Shanghai Composite IndexCN:000001 +0.32% edged 0.3% higher."

'-Oil futures held their ground above $92 a barrel level Wednesday, as traders weighed better demand prospects — from a weaker dollar and jump in U.S. housing starts — against a bigger-than-expected rise in crude supplies. Crude for November delivery CLX2 -0.11% settled at $92.12 a barrel, up 3 cents on the New York Mercantile Exchange."

"- November Soybeans finished up 15 1/2 at 1509 1/4, 2 off the high and 22 up from the low. January Soybeans closed up 15 1/2 at 1508 1/4. This was 22 up from the low and 1 3/4 off the high. December Soymeal closed up 1.9 at 454.7. This was 4.5 up from the low and 1.2 off the high. December Soybean Oil finished up 0.56 at 51.03, 0.06 off the high and 0.74 up from the low. The soybean market traded modestly higher through midday but bids began to pick up in the last hour and November soybeans ended the day with double digit gains. Outside markets were steady to slightly positive for the commodity complex with stocks mixed on the day but the US Dollar was sharply lower. Soybean cash bids were mostly flat across the Midwest with harvest wrapping up in the west but substantial activity remains in the east. Some traders suggest that new farmer sales are slowing as some wait and hope for a $17.00 cash price. Additional support in futures came from consistent demand from China and in anticipation of a positive export sales report tomorrow. A fair amount of pressure was seen early on as traders took profits and on news that South American weather looks favorable this week and next with scattered showers expected to cover areas of Brazil in the next 5 days. Argentina will dry down this week before rainfall returns next week which should also be beneficial to row crop conditions."

FKLI- Further Advance Expected. 

The FBM KLCI gained for another round as investors confidence recover from local economy slow down. Malaysia might be shielded from external negative shock such as global slow down and unemployment issue due to its capability to sustain it own demand. For this month, market is expected to rise further as we have tons of earning results announcement on the U.S market, China and Hong Kong market are rising steadily and the European crisis is properly dealt with at the moment. Technically, the spot month Oct contract is poised to recover further based on higher low candle patter formed on daily chart. The combination of higher low and higher high price action are the basic requirement for the market to continue hovering higher. When a higher low is formed, it signifies that Buyers step in to take control over Sellers dominance usually after the market has hit its major support level or oversold area. Confirmation on uptrend is done when a higher high price action is created from a steady rally usually after the market survive from previous correction. For this instance, further upside confirmation will appear if the index futures manage to breach above previous high or higher high around 1,671 level.

Daily Pivot Point
R2= 1673
R1= 1669
S1= 1658

FCPO- Digesting Bad Fundamental On Palm Oil Stocks.

Palm oil futures finished a little changed yesterday as traders are digesting how bad the market would retrace if the demand and export figures does not grow substantially this year. At closed, the benchmark Dec went up about RM5 to 2,471 level, volume was recorded higher at 20,243. Palm oil sentiment is already at bad shape when stocks increased worse than expected this year, growing to 2.4 millions tons and market participants are expecting it to hit about 3 millions tons early Jan next year. This record high palm oil stocks and static demand will inevitably limit major market recovery for this end of fourth quarter.  Technically, the benchmark Dec is likely moving within the symmetrical triangle range shown on hourly chart above. A symmetrical triangle is generally regarded as a period of consolidation before the price moves beyond one of the identified trend lines. A break below the lower trend line is used by technical traders to signal a move lower, while a break above the upper trend line signals the beginning of a move upward. For a solid break out confirmation, traders use a sharp increase in volume or any other available technical indicator to confirm a breakout beyond one of the trend lines. But there was other meaning as well to this chart pattern. A symmetrical triangle also signifies trend continuation pattern. For this instances,  if we took the current short term recovery, market should continue to recover further but if we consider medium term price action, market is said to move lower eventually. Today, pivot support for the benchmark Dec is located around  2,505 while resistance is pegged at 2,439. 

Daily Pivot Point
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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