Tuesday, March 5, 2013

FKLI Break Out, With Caution 5th March 2013

Tuesday 5th March 2013. Index futures suddenly break out above 1,640 level for the first time since 13th February 2013, market threaded with caution. Other news to follow.

"- U.S. stocks turned around early session losses to close higher Monday, after strength in defensive sectors shored up weak indusrtials and energy on China growth fears. The Dow Jones Industrial Average DJIA +0.27% closed up 38.16 points, or 0.3%, to 14,127.82, about 37 points shy of its record high close from October 2007. The S&P 500 Index SPX +0.46%rose 7 points, or 0.5%, to close at 1,525.20. The Nasdaq Composite Index COMP +0.39%advanced 12.29 points, or 0.4%, to close at 3,182.03."

"- Mainland Chinese stocks suffered their worst drop in several months on Monday as property and construction-related sectors got slammed after Beijing imposed fresh measures to cool home prices. The deep losses rubbed off on most other markets in the region, and on Hong Kong-listed Chinese developers in particular. The Japanese market was an exception, with real-estate shares extending their recent surge on an improved outlook amid sustained hopes for a policy boost to the economy. China’s Shanghai Composite Index CN:000001 -3.65%  sank 3.7% for its worst percentage drop since August 2011, while the Shenzhen Composite Index fell 3.5%, for its steepest fall since July."

"-- Oil futures settled with a loss on Monday, with worries about energy demand in China helping prices mark a fresh low for the year. April crudeCLJ3 +0.18% fell 56 cents, or 0.6%, to settle at $90.12 a barrel on the New York Mercantile Exchange. "

"-May Soybeans finished up 20 at 1463 1/2, 3/4 off the high and 29 1/4 up from the low. July Soybeans closed up 16 at 1443 1/4. This was 25 3/4 up from the low and 2 1/2 off the high.

May Soymeal closed up 5.2 at 434.5. This was 10.3 up from the low and equal to the high. May Soybean Oil finished up 0.63 at 50.3, 0.03 off the high and 0.82 up from the low. May soybeans traded lower early in the session but found buying support late in the day to lift the complex into positive territory at the closing bell. An active 2 week weather forecast for the US Midwest added early pressure to the new crop grain and oilseed contracts. Better than expected rainfall over the weekend in Argentina was seen as a negative force today but the strong demand data in the US market helped to add support. Export inspections were positive for market sentiment with inspections coming in at 40.3 million bushels, up from 27.3 the week prior. Shipments needed each week to reach the USDA export estimate are 7.5 million bushels, down from 8.7 the week prior. The cumulative shipment pace is 85.3% of the USDA forecast vs. the 5 year average of 69.5%."

FKLI- Upside Breakout From Weekly Range

Index futures and stock index went on creating a new weekly high today as election fear subsided for the moment. Institutional investors are putting money back to the market and starting to load up their holding mostly in blue chip stocks. The March contract went up about 9.50 points to 1,639.50, day high and low were 1,645 and 1,634.50 level respectively at the time writing. Meanwhile stock index also went above important resistance level above 1,640, the index clocked higher about 5.22 points to 1,641.20. Technically, this is a valid upside break out when the March contract breached above 1,640, signifying more upside potential this week. On contrary, I believe this sudden surge was possible mostly due to political development rather than looking at technical perspective alone. Investors are more willing to take more risk in the market prior to the general election, which is likely to happen on April. As mentioned in previous post, there is nothing wrong to be Bullish for the moment as general election is still months away. Volatility is the name of the game as market can fluctuate in extreme reading and return to trade in slower tune. For today, pivot support for March contract is located around 1,628 while resistance is pegged at 1,650.

Daily Pivot Point
R2= 1650
R1= 1640
S1= 1628
S2= 1605

FCPO- Technical Rebound, Not So Technical Today. 

I told you, I told you so !! Did I said it too many time ?? Palm oil futures manage to recover above yesterday short term resistance trend line as lower palm oil price spur bargain hunting. Most of the recovery was fuel by recent upside made by Soy oil. The most actively traded May Soy oil was up about 1.2% to 50.40 per pound at the time of writing. There is no doubt we are looking at impressive come back from Soy oil alone. For today, I expect no less from palm oil futures, the benchmark May is likely open gap up and continue to head north. Pay attention if it open RM35 points higher as some pull back may happen if it open gap up too high. Technically, yesterday recovery was a early hint for the market to recover further. The higher low and higher high formed on lower time frame will give faster market direction but the disadvantage by looking at smaller time frame would derive more fake outs than higher time frame. Nonetheless, depends on the candle formations, traders can get a valid early detection when the market turned by looking at smaller time frame. Bullish momentum is likely to sustain today as the benchmark May successfully breach above 2,405 resistance level yesterday. More Buyers will commit if the benchmark May could went up above 2,425 level and medium term Bearish outlook will become Neutral if the May contract went on and hit the second pivot resistance level at 2,440.

Daily Pivot Point
R2= 2440
R1= 2425
S1= 2385
S2= 2360

 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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