Market Overview 13th Feb 2012

Monday, 13th Feb 2012. The FBM KLCI took a step back on previous Friday and ended the day slightly lower along with regional index performance as well, mild retracement is expected soon. Other news to follow.

"-U.S. stocks made their biggest drop of the year Friday, quitting five weeks of gains for the S&P 500 and Nasdaq Composite, on worries that efforts to keep Greece from defaulting were falling apart. As stocks dove, the Chicago Board Options Exchange Volatility Index VIX +11.59% leapt above 20 for the first time in nearly two weeks, rising more than 11%. The Dow Jones Industrial Average DJIA -0.69%  trimmed some losses in the final minutes, falling 89.23 points, or 0.7%, to 12,801.23, tallying a loss of 0.5% for the week. The S&P 500 index SPX -0.69%  retreated 9.31 points, or 0.7%, to 1,342.64, for a loss of 0.2% for the week. Natural-resource companies were hardest hit while utilities lost the least ground among its 10 major industry sectors. All closed lower.

The Nasdaq Composite COMP -0.80%  declined 23.35 points, or 0.8%, to 2,903.88. For the week, it declined 0.1%."

"- Most Asia markets closed lowed Friday after Greece approved a long-awaited austerity agreement, but international backers called for ratification of the reforms before more bailout funds would be released. South Korea’s Kospi KR:0100 -1.04% fell 1% and Australia’s S&P/ASX 200 AU:XJO -0.88%  lost 0.8%, while Hong Kong’s Hang Seng Index HK:HSI -1.08%  fell 1.1%, and Japan’s Nikkei Stock Average JP:100000018 -0.46% shed 0.6%. China’s Shanghai Composite CN:000001 +0.10%  added 0.1% KR:0100 -1.04% Greece secured a long-awaited austerity agreement Thursday that was expected to lead to a new round of international aid. This, along with a dip in U.S. jobless claims, supported modest gains on Wall Street. But European finance ministers refused to sign off on a second aid package for Greece until the parliament approved the austerity undertakings and economic reforms."

"-Crude-oil futures declined Friday after the International Energy Agency cut its outlook for global oil demand, and investors turned jittery yet again on Greece and its debt crisis.

Crude oil for March delivery CL2H -0.83%  fell $1.17, or 1.2%, to $98.67 a barrel on the New York Mercantile Exchange. That ended a three-session winning streak for oil, which was enough to secure weekly gains of 0.8%."

"-US soybean futures ended with modest gains, breaking a three-day string of losses. Market managed to rebound from declines that held for most of the day, with buying emerging near the close as traders covered shorts ahead of the weekend, analysts say. Lingering worries about crop potential in southern Brazil and unwinding of long corn/short soybean spreads aided the recovery, analysts add. Traders say soy prices must gain against corn to attract acreage this year. CBOT March soybeans ended up 1 1/2c to $12.29/bushel. Soy-product futures end mostly lower, succumbing to broader commodity weakness in the absence of fresh supportive news. Soyoil continued to before better versus soyoil as traders are optimistic about world vegoil demand. CBOT March soyoil fell 0.01c to 52.53c/pound while March soymeal dropped $1 to $320/short ton.

 FKLI- Healthy Retracement.

Stock index backed paddled on previous Friday but ended the week far above expectation. Last Friday, the FBM KLCI finished 0.23% lower to 1,561.66 while index futures dipped about 5.50 points to settled at 1,558.50. If the market continues to retrace today, we shall see the first series of correction after the market has recovered steadily since last two weeks. In the technical perspective, index futures is likely having mild correction right after surpassing the upper channel on the "rising wedge" chart pattern shown above. If there is no major correction regionally, this correction should be short live. Investors who have Longed are advise to booked part of their profits soon and trail their stop closely. This is crucial to not turn a profitable positions into a losses if the market does tumble for any reason. Overall, the medium term uptrend remain intact and traders should be able to take advantage of an oversold condition if the market retrace too swift. For today, support level to watch, 1,545 while resistance is pegged around 1,665.

Daily Pivot Point
R2= 1665
R1= 1559
S1= 1549
S2= 1545

 FCPO- Soya Oil Weakness Hurt Palm Oil Performance

Palm oil futures ended lower by tracking on it's rival oil performance on previous Friday plus negative sentiment on palm oil export also curb price from soaring. On Friday 10th Feb, cargo surveyor SGS reported Malaysia Feb. 1-10 Palm Oil Exports 337,618 Tons, Down 4.3% while ITS reported Palm Oil Exports 342,982 Tons, Down 7.7%. MPOB stated Malaysia’s January Palm Oil Exports 1.38 Mln Tons, Down 13%. Record high palm oil stocks level concern is still valid as sluggish demand on this year first quarter will pressure price from recovering in the long term. Technically, judging from the first higher low formation on hourly chart, the benchmark Apr should be trending up currently. Nonetheless, investors are advised to keep their senses open as market direction could turn around real quick the benchmark Apr breach below the previous low level at 3,118. For today, immediate support is located at 3,118 followed by 3,106 while resistance is pegged at 3,154.

Daily Pivot Point
R2= 3154
R1= 3142
S1= 3118
S2= 3106
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.