Thursday, 4th April 2013. The index futures recorded unprecedented come back after it plunge about 60 points to 1621.50 from 1685 level in a single session yesterday due to parliament dissolution news. Other news to follow.
"-Japan’s stock market jumped 3%, clawing back almost all of the losses from the previous two days ahead of Thursday’s central bank meeting outcome, while shares in the rest of Asia slipped with weaker commodity prices weighing on Australia. Japan’s Nikkei Stock Average JP:NIK +2.99% rose to 12,632.20, the biggest rise in nearly two months, as investors eagerly awaited the results of the Bank of Japan’s two-day policy meeting that started Wednesday. In China, the Shanghai CompositeCN:000001 -0.11% ended down 0.1% at 2,225.30 in light trading before a holiday-extended four-day weekend and as investors remained cautious before the release of key Chinese economic data next week. A rise in both HSBC’s China services purchasing managers’ index to a six-month high of 54.3 in March and China’s official nonmanufacturing Purchasing Managers’ Index to 55.6 in March failed to boost sentiment in China. Hong Kong’s Hang Seng Index HK:HSI -0.14% fell 0.1% to 22,337.49. Banks dropped following the China Banking Regulatory Commission’s tighter rules on wealth management products, which are expected to restrain smaller banks’ earnings growth given their reliance on WMPs. China Minsheng Banking Corp. HK:1988 -2.11% fell 2.1% and China CITIC Banking Corp. HK:998 -3.65% dropped 3.7%."
FKLI- Extreme Volatility Reading
The stock index and index futures plunge about 2% before recovering back into positive teritory yesterday. It was the most active trading ever recorded this year with volume hitting over 20k lots in an outright month single day. Words out, the local fund was dumping out their stocks holding and foreign fund responsible to accumulate it. The second session swift recovery on the market has caused frantic Short covering when the price shoot up beyond 1,675 level, thus forcing the index futures to recover above 1,680 later on. There was two major psychological element occurred yesterday. The first element which occur on the morning session turn out to be extreme fear due to major announcement on parliament dissolution. Parliament dissolution would bring much uncertainties whether the current ruling government will re-elected. If not, much changes or worst, chaos could take place if the forming of new government / transfer of power is not smooth. All these factors explained why the market had to go down at the first place due to this "uncertainties." Another psychological element would be impulsive greed behavior induced by oversold condition yesterday. Collective Buying activities when the cash market manage to sustain above 1,670 level on the afternoon sessions, sparks much needed "grounds" for the Buyers to kept accumulating Long in the market as market is likely stabilizing after the parliament dissolution announcement has been made. Bottom line, Bulls emerged victorious when the market closed unexpectedly higher yesterday. There will be further confirming signs for the market to continue recover next week if the April contract continue to rally today.
Daily Pivot Point
R2=1732
R1=1709
S1=1643
S2=1599
FCPO- Double Bottom Does Have Its Power To Rally, At Least For Now.
Most of the Bullish sign was noticeably visible when the benchmark Jun starting to recover swiftly from its lower open value at 2,350 on morning session to 2,375 level yesterday. It was a unusual sight for commodity futures to be able to recover 0.1%~0.15% quickly from the low opening and when the moment it could done that, Bulls are attempting to make its presence in the market. Just when my initial assessment regarding possible market recovery based on recent double bottom candle pattern beginning to fade, yesterday Bullish price action suggested different perspective. It is a challenging scenario for the Bulls to recovered above previous Monday high around 2,391 level as overnight weakness on Soy oil would dampen the chances for any market recovery yesterday but the benchmark Jun prove otherwise. Technically, the first higher low has been detected around 2,350 when the benchmark Jun manage to rally from lower opening value to 2,396 level yesterday. Higher low level around 2,350 can also be used as immediate support if anything goes wrong from here. Additional, major support based on last Friday low located around 2,335 remain intact. For today, market is expected to open higher judging from Bullish Marubozu candle formed on daily chart yesterday. Revised pivot support for benchmark Jun is located around 2,365 while resistance is pegged at 2,428 level.
Daily Pivot Point
R2=2428
R1=2412
S1=2365
S2=2334
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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