Wednesday, May 22, 2013

FKLI Trapped Within Range, FCPO Floating Above Support Level. 22th May 2013

22th May 2013. The stock index made some decent recovery yesterday, signalling possible rally this week. Other news to follow.

"- U.S. stocks rose on Tuesday, with the Dow industrials and S&P 500 finishing at record highs, after comments from two Federal Reserve officials suggested that the central bank is not close to tapering its bond-buying program. The Dow Jones Industrial Average DJIA +0.34%  gained 52.30 points, or 0.3%, to end at 15,387.58, notching its 19th consecutive Tuesday rise. The S&P 500 index SPX +0.17%  climbed 2.87 points, or 0.2%, to 1,669.16, with health care the biggest gainer and telecommunications the biggest laggard among the 10 major industry groups. The Nasdaq Composite COMP +0.16%  rose 5.69 points, or 0.2%, to 3,502.12."

"-  Australian stocks declined, and Hong Kong equities snapped a three-day winning run on Tuesday, weighed by overnight losses on Wall Street and uncertainty over U.S. monetary policy. Japanese and mainland Chinese shares overcame choppy trade to finish higher, meanwhile, with a weakened yen helping the Nikkei Stock Average set a fresh multiyear high. The S&P/ASX 200 AU:XJO +0.20%  dropped 0.6% in Sydney, the Hang Seng IndexHK:HSI -0.54%  gave up 0.5% in Hong Kong and the Kospi KR:SEU +0.36%  was off 0.1% in Seoul. Japan’s Nikkei JP:NIK +0.95%  changed direction a few times before rising 0.1% to 15,381.02, its highest finish since December 2007. The benchmark is now up 11% so far in May, and almost 48% higher from the level at last year’s end. The Shanghai Composite CN:000001 +0.22% inched up 0.2%."

"- Oil futures to log their first decline in five sessions. Traders awaited this week's updates on U.S. petroleum supplies and the June crude futures contract expired at the session's close. June crude CLM3 -0.93% fell 55 cents, or 0.6%, to settle at $96.16 a barrel on the New York Mercantile Exchange. July crude CLN3 -0.45% , which is now the front-month contract, ended at $96.18, down 75 cents, or 0.8%. "

"-July Soybeans finished up 13 3/4 at 1478 1/4, 1 off the high and 22 1/4 up from the low. November Soybeans closed down 4 1/4 at 1220 3/4. This was 6 1/2 up from the low and 7 1/4 off the high. July Soymeal closed up 3.4 at 438.7. This was 7.5 up from the low and 0.5 off the high. July Soybean Oil finished up 0.28 at 49.48, 0.22 off the high and 0.53 up from the low. The soybean market ended the day mixed with significant support showing up in the July contract while the rest of the complex traded lower to nearly unchanged. Cash basis in processor markets was on the defensive for most of the day as producer sales of old crop have picked up. The July vs. November spread setback in early trade but found support midday and managed to post a new contract high at +259 3/4. A well-followed oilseed analyst suggested overnight that US soybean imports could be reach just over 30 million bushels in the September/August period with most of the supply coming from Canada and South America. The supplies will likely hit the east coast which should ease the tight supply situation but very little product will have the ability to move west where market conditions remain relatively tight. Most traders are looking for crush to decline over the next couple of months. July meal traded higher today while the December contract was lower. Steady demand for old crop supply helped to support July meal. Soybean oil contracts ended the day in positive territory."


FKLI- Crawling Back Into Range


There was still no sign of major weakness yet for both index futures and stock index currently after the market retrace slightly from previous surge to 1,835, two weeks ago. Right now, the market is going into a range trading around 1,800 ~ 1,760 area with upside bias. More upside is expected if the May contract manage to breach above the upper range located at 1,800 level while market participants can expect more profit taking activities if the spot month retrace below 1,760 area. Short term market participants and traders are likely setting up to trim their positions earlier ahead for the long weekend. Bursa Derivatives will be closed on this Friday, 24th May 2013 for Wesak public holiday. Externally, more foreign fund and local fund are channelling back into the stock market gradually as you can see most of the blue chips stocks are making new weekly high and some multi months high. And the upside trend is not only concentrate on one or two sectors, but almost spread event to entire sectors, except plantation. For today, pivot point for spot month contract is located around 1,778 while resistance is pegged at 1,793.

Daily Pivot Point
R2= 1798
R1= 1793
S1= 1778
S2= 1768


FCPO- Support Identified

There was one major event created when the market start to recover on second session yesterday. It is a feat for the benchmark Aug to recover after it gap down on morning session and rally up to 2,348 level, a strong signal for the Bulls to stay in the game. From technical point of view, the benchmark Aug has created another higher low yesterday when it recover up to 2,348 level. Now, this higher low area or 2,321 will serve as immediate support level this level this week. Bullish candle formations such as higher low and higher high are part of the vital sign for the market to rally further. Without it, you might be swinging at the wind not the ball. But that is the whole story, right after the benchmark Aug hit the high, it quickly losses its momentum and closed at 2,335 level, just RM1 higher than previous Monday close this week. Overall, the benchmark Aug further upside is still pending currently judging from the closing value for the past two days this week. Market participants are yet made up their mind what they are going to do with weak demand and gradual reduction in stockpiles. Short term sideways trading strategy is likely enable you to benefit from intraday price swing. Daily ATR range is still bottoming at around 40 points. This week, pivot support for the Aug contract is located around 2,321 while resistance is pegged at 2,348.


Daily Pivot Point
R2= 2361
R1= 2348
S1= 2321
S2= 2307

 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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