Wednesday, February 20, 2013

Upside Likely Resume For Commodity Futures 20th Feb 2013

Wednesday, 20th Feb 2013. Palm oil futures is picking up positive momentum at the moment as trading participants are expecting local exporters to push their inventory out before the implementation of export tax next month. Other news to follow.

"- U.S. stocks ended higher on Tuesday, pushing the S&P 500 index to a five-year high, buoyed by a rise in deal activity and an improvement in German investor sentiment. The Dow Jones Industrial Average DJIA +0.39% climbed 53.91 points, or 0.4%, to 14,035.67 and the S&P 500SPX +0.73% gained 11.15 points, or 0.7%, to 1,530.94. The Nasdaq Composite indexCOMP +0.68% rose 21.56 points, or 0.7%, to 3,213.59"

"-Stocks in Hong Kong and Shanghai got slapped Tuesday after several local Chinese governments imposed further restrictions on home purchases, with the central bank’s move to curb liquidity in the money markets also weighing on sentiment.

Japanese shares retreated as the yen sprang higher after the nation’s finance minister denied Tokyo was considering allowing purchases of foreign bonds. The Hang Seng Index HK:HSI -1.02%  fell 1% in Hong Kong, while the Shanghai Composite Index CN:000001 -1.60%  skidded 1.6% for its worst percentage drop since a 1.8% decline on Jan. 11. Elsewhere in the region, Japan’s Nikkei Stock Average JP:100000018 +0.77% slipped 0.3%, giving back some of the gains made in the previous session, when the benchmark jumped 2.1%. South Korea’s Kospi KR:SEU +0.73%  gained 0.2%, Taiwan’s Taiex XX:Y9999 +0.22%  rose 0.2%, and Australia’s S&P/ASX 200 index AU:XJO +0.32% edged up 0.4% to end at its highest point since September 2008."
"- Oil futures settled above $96 a barrel on Tuesday, finding support from upbeat German economic-sentiment data, but failing to recoup all of their recent losses as traders awaited further hints on supply and demand this week. Crude oil for March delivery CLH3 +0.04%  settled at $96.66 a barrel, up 80 cents, or 0.8%, from Friday’s settlement on the New York Mercantile Exchange."
"-March Soybeans finished up 45 3/4 at 1470 1/4, 4 off the high and 38 up from the low. November Soybeans closed up 13 at 1274 3/4. This was 8 1/4 up from the low and 5 off the high.
March Soymeal closed up 15.9 at 425.3. This was 12.8 up from the low and 3.0 off the high. March Soybean Oil finished up 0.96 at 52.58, 0.06 off the high and 0.95 up from the low. March soybeans traded sharply higher on the day on reports that rainfall over the weekend in Argentina was less than anticipated and due to significant loading delays at Brazilian ports. Some traders suggested that the lineup to load soybeans was perhaps getting so long that fresh demand could be heading back to the US border. Additional support was seen after the USDA reported this morning that US exporters sold 120,000 tonnes of soybeans to China for the 2012/13 crop year. Export inspections were seen as a positive for market direction today after reporting shipments within the trade range at 40.4 million bushels, up from 30.2 the week prior. Shipments needed each week to hit the USDA forecast are now at 9.4 million bushels, up from 10.4 the week prior. The cumulative shipment pace is 80% of the total USDA export estimate vs. the 5 year average of 64%. The robust shipment pace was supportive to the trade and technical signals have improved which added to the upside momentum."

FKLI-Bears Are Going To Stir Up The Fight !!

Traders are still sceptic about any recovery that can be made to the Malaysia stock market at the moment due to uncertain political outlook. Words out that the government have to dissolve the parliament prior to the election by the end of this month. And this reason alone might caused most of the investors to take their cash out from the stock market as the risk for major correction is too high. Falling for the fifth session straight including today, index futures and stock index are set to retrace further today judging from its previous Bearish candle formation. Lower highs and lower lows are easily spotted on the hourly chart while new lower high is formed on daily chart on previous Thrusday when the market retrace right after it hit last resistance level around 1,640 level. Furthermore, there is no sign for the market to recover yet and this Bearish momentum is going to intensified if the major support around 1,586 level is breach. It could also get worse if there is any unexpected political event other than general election occur prior to the general election. For today, pivot point for Feb contract is located around 1,595.50 while resistance is pegged at 1,614 level.

Daily Pivot Point
 R2=1620
 R1=1614
 S1=1601.5
 S2= 1595.5

FCPO- Likely Gain On Improving Export Data.

Palm oil futures is building up steam to recover as trading participants are expecting Bullish export data soon today. The ITS and SGS cargo surveyors are expected to released their respective export figures later this morning. As mentioned on previous post, history is likely to repeat itself again when the benchmark May manage to recover from previous correction that took the benchmark month to the low of 2,476 level. For long term trader who holding their Long positions above 2,520 (Long on break away gap up) last week when this correction occur, it was a tough call to not cut their losses when the market go against them. Unfortunately, no one would know history will repeat itself unless it has happen, it is just too bad that the correction occur way below the expected support area around 2,511~2,500 last week. Some may agree that there was less volume to support palm oil futures to recover but whether the market is trading on low or it's usual volume, we cannot be biased about the direction due to volume alone. Technically, Bulls are likely return to resume control judging from the new higher low candle formation on hourly chart shown above. It qualified to be known as higher low as market has recovered more than 50% from where it retrace, calculating from 2,593 level to 2,576 level. Apart from that, following the recent breached above 2,566 level yesterday, Bullish outlook the benchmark May is likely extended today. If anything goes wrong, pivot point support for may contract is located around 2,538 while upside is capped around 2,588 level.


Daily Pivot Point
 R2=2588
 R1=2576
 S1=2551
 S2= 2538

 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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