Market Overview 8th Dec 2011

Thursday, 8th Dec. The FBM KLCI ended slightly yesterday ahead of European Union meeting to address their financial issues. Others news to follow.

"-U.S. stocks on Wednesday closed near to where they began, with the Dow industrials displaying the most strength, as investors crossed their fingers two days ahead of a European Union summit. After a two-day decline, the Dow Jones Industrial Average DJIA +0.38%  gained 46.24 points, or 0.4%, to end at 12,196.37, supported by a 2.3% rise in JPMorgan Chase & Co. JPM +0.74%   after the bank said it has the authority to buy back additional shares after spending less than regulators allowed on dividends. The S&P 500 Index SPX +0.20%  added 2.54 points, or 0.2%, to 1,261.01, while the Nasdaq Composite Index COMP -0.01%  declined fractionally to 2,649.21."

"- Asian shares rose on Wednesday, with optimism returning ahead of this week’s crucial European meetings, as a report said more funding may be available to help rescue the region. Hong Kong’s Hang Seng Index HK:HSI +1.58%  rose 0.9% while the Shanghai Composite Index CN:000001 +0.29%  climbed 0.2%. The Japanese Nikkei Stock Average JP:NIK +1.69% gained 1.5%, while the South Korean Kospi KR:0100 +0.87% rose 0.5%, and the Australian S&P/ASX 200 index AU:XJO +0.72%  climbed 0.7%."

"-Crude-oil futures settled lower on Wednesday, barely holding above $100 a barrel as investors turned more pessimistic on the euro zone and a weekly government supply report showed a surprise rise in crude inventories. Crude for January delivery CL2F -0.10%  retreated 79 cents, or 0.8%, to settle at $100.49 a barrel on the New York Mercantile Exchange."

"-US soy futures end slightly higher, bucking the downward trend in grains, as dry Argentina forecasts underpin prices. While the situation in South America is far from dire, traders say dry weather forecasts bear watching since the size of the crop there will have a big impact on demand for US soybeans. "It boils down to South American weather. If they have it, they ship it," says Dave Marshall, an independent commodity advisor. Soybean gains were limited Wednesday by the dollar's strength and worries about Europe. CBOT January soy ends up 1 1/2c at $11.31/bushel. Soy products following the soybean market higher, with December soymeal rising $1.50 to $283.70/short ton and soyoil adding 0.26c to 50.24c/pound. "

FKLI- Time To Recover After Previous Healthy Correction

 Even though the stock index just rose merely 2 points to 1,482.99 yesterday, it showed some indication that previous upside momentum is about to resume. On the other hand, the index futures manage to gained about 9.50 points or 0.64% to 1,484.50 yesterday, the high was 1,489.50 before the closing bell. For short term, market is expected to continue its positive momentum amid distinctive premium traded on index futures against stock index yesterday. Apart from that, the index futures recent support level has been identified based on previous Monday low this week, which is located at 1,473.50 level. Another major higher low formed when the index futures retrace on previous Tuesday to halfway from the peak to cover 50% of the gap happened on Thursday last week. For today, support is likely located around 1,477 while resistance is pegged at 1,490 level.

Daily Pivot Point
R2= 1496
R1= 1490
S1= 1477
S2= 1470

FCPO-  More Upside Eyed

CPO futures resume its recovery yesterday by raising up to 3,126 before settling at 3,119 on the closing bell. Palm oil prices are susceptible for further recovery after retrace substantially last two weeks as most traders are covering their Long position for profit taking plus significant weakness occur on Soya oil and broader commodities as well. Things about to change soon as palm oil futures is prep to recover judging on this week positive price action. After showing some sign of Bullish reversal on last Monday (when the benchmark Feb recover to 3,133 level), the benchmark Feb need to overcome the previous high at 3,133 level to acknowledge medium term price recovery. If this event materialize, market should form two major higher highs and higher lows and paving way for a strong upside momentum. Minor retracement or correction will be expected along the way but it should not last more than three sessions as we could be looking at different kind of correction if the downside gets out of hand. For today, immediate support is located around 3,100 while resistance is pegged at 3,144.      

Daily Pivot Point
R2= 3144
R1= 3131
S1=3100
S2= 3082

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.