Market Overview 12th Jan 2012

Thursday, 12th Jan 2012. The FBM KLCI ended unchanged again yesterday prompting more indecisive trading session as investors digest the impact of regional economy data that show mixed picture on the United State and China. Other news to follow.

"-U.S. stocks largely erased Wednesday losses, with the S&P 500 Index stalled at five-month highs, on the ongoing tug between Europe’s debt troubles and an improving U.S. economy. After falling as much as 63 points, the Dow Jones Industrial Average DJIA -0.10%  finished off 13.02 points, or 0.1%, at 12,449.45. The S&P 500 SPX +0.03%  erased a mild deficit to close up 0.4 point at 1,292.48, with materials rising the most and energy ranking as the largest laggard among its 10 industry sectors. That was its highest close since July 28. The S&P 500 is facing a little trouble breaking through the 1,290 to 1,295 level, said Pavlik, who pegged the next resistance at 1,330 or 1,350."

 "- Most Asian markets ended higher on Wednesday, with resource- and financial-sector stocks underpinning the gains after a strong performance for global equities and commodities a day earlier. Chinese stocks declined for the first time in four trading days, as coal miners returned some of this week’s advances on profit-taking. Japan’s Nikkei Stock Average JP:NIK +0.30%  added 0.3% to 8,447.88, Australia’s S&P/ASX 200 index AU:XJO +0.85%  climbed 0.9% to 4,187.50, Hong Kong’s Hang Seng Index HK:HSI +0.78%  gained 0.8% to 19,151.94 and Taiwan’s Taiex XX:Y9999 +0.13%  inched up 0.1% to 7,188.21. China’s Shanghai Composite CN:000001 -0.42%  fell 0.4% to 2,276.05, paring this week’s gains to 5.2%, while South Korea’s Kospi KR:0100 -0.41% fell 0.4% to 1,845.55. HK:HSI +0.78%."

"- Crude-oil futures declined Wednesday, giving back some of the previous day’s gains, on a stronger dollar and a surprise jump in the nation’s crude inventories. Crude for February delivery CL2G +0.44%  declined $1.37, or 1.3%, to $100.87 a barrel on the New York Mercantile Exchange. A midday effort to turn higher fizzled, and the settlement was oil‘s lowest since Dec. 30. "

"-US soybean futures fell sharply as South American rains had traders reducing risk exposure before key government reports. Heavier-than-expected showers in Argentina overnight forced traders to reduce the weather premium placed in the market as fears of yield losses eased some. Otherwise, traders were aggressively evening positions before Thursday's USDA reports, taking profits in case government data produce a bearish surprise, analysts say. CBOT March soybeans ended down 2.4% at $12.03/bushel.  Soy-product futures slumped in unison with soybean futures, succumbing to pressure from improved crop outlooks for South America. Beneficial rains in Argentina, eased supply fears, allowing traders to even trades ahead of Thursday's USDA reports. CBOT March soymeal ended down $9.70 at $312.80/short ton and March soyoil dropped 0.61c to 51.89c/pound. "

FKLI- Consolidating At Top ?

Stock index ended slightly unchanged again for the third times consecutively this week marking indecision and less follow thru Buying activities towards its major resistance around 1,530 level. Equity market player might still hesitate to re-act on better U.S economy data and earnings reports because most of them thought that the recovery on the west may not be sustainable. What ever the reason is, we are here to take any advantage we can from any possible outcome on both stock index and index futures market. If there is substantial bad news on the floor which currently focusing on Euro debt crisis, we should expect some correction for most major indexes while further recovery is expected if the U.S or Asia major indexes continues to rallies. That was on the correlation and sentiment side, on technical perspective the index futures has been hovering at the top for second consecutive days where 1,532~1,535 previous high are acting as current resistance level. This may mean that there is not enough force to overtake the previous level as the index might has gone up too high, if less investors are not willing to Buy above this level it will prompt higher possibilities for retracement soon. But even if there is any break out above 1,535 level, I believe that traders could take this advantage and Short the market (short term fade break out) around 1,540 level as the index futures are likely to retrace for some profit taking right after it charter the new high this week. For today, support is located around 1,519 level while resistance is pegged at 1,535.   

Daily Pivot Point
R2= 1535
R1= 1529
S1= 1519
S2= 1515

 FCPO- Congesting Within A Range

CPO futures traded firmer yesterday amid concern over supplies and some recovery on the Soya oil help support market sentiment as well. At close, the benchmark Mar ended higher about RM18 to 3,233, closing at the high of the market. unfortunately volume and open interest did not accompanied when the palm oil futures rallied yesterday, prompting less promising force to push the price higher this week. For this near term, palm oil price is likely hovering within these range 3,245~3,178 prior to the USDA report that will be announced over U.S commodities market today. We might get more hint how will be the correlation like from palm oil rival products after the USDA reports. Technically, the benchmark Mar is likely traveling within the range shown above (white line) as market participants will be expected less active towards this coming Chinese New Year holidays on Jan, Federal state, Birthday of Prophet Muhammad and Thaipusam holidays on Feb. Nonetheless, overall upside remain intact with more susceptible correction due to less active volume in the market. For today, support is located around 3,207 while resistance is pegged around 3,246.

Daily Pivot Point
R2= 3259
R1= 3246
S1= 3207
S2= 3181
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.