Market Overview 9th Jan 2012

Monday, 9th Jan 2012. The FBM KLCI closed unchanged on previous Friday signalling possible paused on current weekly uptrend for the coming session. Other news to follow.

"- U.S. stocks mostly declined Friday, cutting into weekly gains, as investors measured further evidence of an improving labour market against Europe’s troubles, illustrated by the euro’s decline.The Dow Jones Industrial AverageDJIA -0.45%  closed down 55.78 points, or 0.5%, to 12,359.92. The blue-chip index rose 1.2% for the week, which was shortened by Monday’s New Year’s holiday. Up 1.6% from last Friday’s close, the S&P 500 Index SPX -0.25%  fell 3.25 points, or 0.3%, to 1,277.81 Friday, with telecommunications the heaviest weight and consumer discretionary companies rising the most among its 10 major sectors. The Nasdaq Composite COMP +0.16% bucked the trend, closing up 4.36 points, or 0.2%, to 2,674.22, for a 2.7% weekly gain. "


"- Most Asian stocks declined on Friday as fears that the European debt crisis was deepening outweighed positive U.S. economic indicators and hopes for strong U.S. jobs data later in the day. Japan’s Nikkei Stock Average JP:NIK -1.16%  closed 1.2% lower at 8,390.35, Hong Kong’s Hang Seng Index HK:HSI -1.17% dropped 1.2% at 18,593.06 and Australia’s S&P/ASX 200AU:XJO -0.83%  declined 0.8% to 4,108.50. South Korea’s Kospi KR:0100 -1.11%  dropped 1.1% to 1,843.14 and Taiwan’s Taiex gave up 0.2% to 7,120.51. The Shanghai CompositeCN:000001 +0.70%  gained 0.7% to 2,163.39, staging a rebound from its 34-month closing low a day earlier."


"-Crude-oil futures ended lower Friday as the glow from a positive U.S. employment report faded and a stronger dollar and lingering concerns about Europe retook the spotlight. Crude for February delivery CL2G +0.11%lost 25 cents, or 0.3%, to $101.56 a barrel on the New York Mercantile Exchange. "

"-US soybean futures end lower, hitting a 1-week low as the market lacked fundamental support to justify higher prices. The market doesn't have overtly bullish news to sustain advances, says ebottrading's John Kleist. He adds the market has no strong demand, dire crop consequences in South America or global supply tightness. Today's declines were accelerated by technical selling as traders viewed the market as overbought with rains due to move into Argentina next week. CBOT March soybeans end down 12 1/2c at $11.96 1/2 a bushel. Soy-product futures finished lower, retreating in unison with soybeans. Soyoil futures slid to a 2-week low, fueled by investment-fund selling amid the absence of fresh fundamental news to support prices, analysts say. Soymeal ended lower, but garnered mild support from traders liquidating long soyoil/short soymeal spreads. CBOT March soyoil dropped 0.94c to 51.12c/pound while March soymeal fell 80c to $312.40/short ton. "


FKLI- Upside May Paused 

Stock index was closed slightly unchanged on previous Friday after see-sawing within  between an intra-day high and low of 1,515.27 and 1,508.93 respectively yesterday. So far on weekly basis, the major index shed 16.60 points, or 1.1% to 1,514.13 yesterday, compared with 1,530.73 at the close on Dec 31.  Technically, the spot month contract has retrace swiftly on last Thursday, marking the first correction after it rallies since last two weeks. But the correction was quickly recovered on previous Friday when the spot month contract closed 7.50 points higher to 1,523.50, just half point off from the high. This signifies that Buyers literally came back on previous Friday, thus suggesting the current uptrend to continue. Nonetheless,  it is more practical for the index futures on this coming session to expect some sideways trading, ranging within the first support S1 level around 1,517 level and resistance is located around 1,529~1,531 area. Apart from that, a weaker opening session is also expected due to the overnight Dow Industrial slightly lower closing value on previous Friday. Overall positive momentum is likely to remain intact, maybe till Chinese new year. 


Daily Pivot Point
R2= 1529
R1=1526
S1=1517
S2= 1511

FCPO- Rallies Likely Continue On Production Concern

CPO futures recovered on previous Friday amid growing concern over weather condition that could result in heavier rain on east Malaysia. In a report by the Malaysian Meteorological Department Friday raised its heavy rain warning from yellow to a more severe orange for parts of Sarawak, a major palm oil producing state, sparking fears of a decline in production in January. Trading participants are expecting Malaysia’s December palm oil production to be 1.39 million tons, down 15% from a month earlier, due to harvesting delays caused by heavy rains. Apart from that, Soya bean commodities is expected to rally if severe hot and dry conditions persist in Argentina. Soya bean production could also drop by as much as 35% to 32 million metric tons in the marketing year ending Sept. 30. On close, the benchmark Mar ended RM21 higher to 3,211 level, just 4 points off the high. Technically, palm oil futures is expected to continue its positive momentum judging on previous Friday price action. Most of the losses on previous Thursday retracement has been recovered on the next day, which mean Buyers are likely still in control. Do not be surprise if the palm oil futures decouple from Soya oil price performance and continue to open higher and rally throughout the session even though Soya oil retraced about 0.94 cents on  previous  Friday overnight. For today, my assessment for support is located around 3,161 while resistance is situated around 3,239 level. 

Daily Pivot Point
R2= 3239
R1=3225
S1=3186
S2=3161
 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.