Market Overview 3rd Feb 2012

Friday, 3rd Feb 2012. The FBM KLCI surge above it's upper range signalling further promising recovery  while regional index ended the session in positive note. Other news to follow.

"-U.S. stocks tallied limited gains for two of three benchmark indexes Thursday as Wall Street looked to the next day’s employment report as the next indicator of the economic recovery. Alternating between small gains and losses for much of the session, the Dow Jones Industrial AverageDJIA -0.09%  closed down 11 points, or 0.1%, at 12,705. The S&P 500 Index SPX +0.11%  rose 1.45 points, or 0.1%, to 1,325.54, with energy faring best and natural-resource firms hardest hit among its 10 major industry sectors.The Nasdaq Composite COMP +0.40%  climbed 11.41 points, or 0.4%, to 2,859.68."

"- Asian markets were powered on Thursday by commodity and financial stocks after an improvement in manufacturing data buoyed global equities, with Australian stocks snapping out of a three-day losing streak. Hong Kong’s Hang Seng Index HK:HSI +2.00%  added 2% to 20,739.45, while the Shanghai Composite Index CN:000001 +1.96% ended at 2,312.56, also jumping 2%. Australia’s S&P/ASX 200 index AU:XJO +1.00%  finished the day with a 1% advance to 4,267.80 and Japan’s Nikkei Stock Average JP:100000018 +0.76% added 0.8% to 8,876.82. South Korea’s Kospi KR:0100 +1.28%  gained 1.3% to 1,984.30, while Taiwan’s TaiexXX:Y9999 +1.37% rose 1.4% to 7,652.46."

"-Crude-oil futures ended at their lowest since mid December on the continued reverberations of a higher-than-expected crude supply increase and lower product demand. Oil for March delivery CL2H +0.27% declined $1.25, or 1.3%, to $96.36 a barrel on the New York Mercantile Exchange. "

"-US soybean futures ended modestly higher, trading in tandem with movement in the US dollar. Prices traded in both negative and positive territory, with USD fluctuations in focus as uncertainty about South American output offset fundamental pressure from sluggish export demand, analysts say. Without a fundamental event to direct prices, traders eyed outside markets, playing more of a waiting game in the absence of directives to break futures out of their recent trading range, analysts add. CBOT March soybeans ended up 1 3/4c to $12.17/bushel. Soy product futures edge higher, mimicking the up and down price movements of soybeans. The markets lacked fresh fundamental directives to push prices, leaving traders focused on outside markets for guidance, analysts say. Two-sided price action in the US dollar index produced mixed action in soymeal and soyoil. CBOT March soymeal ended up $1.10 to $323.40/short ton; March soyoil finished up 0.01c to 51.19c/pound."

FKLI- Stock Index Lead The Gain

Stock index finally chartered a new high yesterday amid positive news on global manufacturing activities which start to show progression. As a result, the FBM KLCI surge 1.04% or 15.80 points to 1,537.09, closing just three points off the high. The ripple effect on the news was also felt by other regional indices whereby most Asia major benchmark manage to closed higher. Technically, the FBM KLCI has break out from its weekly range when it breach above 1,530 level, prompting more recovery for the index futures as well. Trailing behind the stock index, the index futures Feb contract gained about 10 points to 1,523.50 level, ending about 14 points discount against stock index. Even though the index futures happen to lagged behind (discount to composite index), we are looking more headroom for it to move upwards if the cash market continue to sustain it's gain today. Conclusively, with re-new positive momentum that took the stock index up closing to previous high, index futures is likely trailing behind and rallies as well. For today, support is located around 1,516 while resistance is pegged around 1,537.

P/s: Bank Negara kept it's overnight rate policy unchanged at 3.00.

Daily Pivot Point
R2= 1537
R1= 1530
S1= 1516
S2= 1509

FCPO- Short Lived Rallies

To many relieve CPO futures does open much higher, giving room for informed trader to exit their Long positions due to soya oil overnight recovery which took the March contract to 51.72 cents on previous Wednesday. Unfortunately, palm oil futures succumb to long term Bearish cue on weak palm oil demand and record high stocks level. Soya oil also slide substantially during the Asian trading session yesterday, the March contract dipped 0.225 cents to 50.95 cents per pound on 7.30pm +8GMT. The technical outlook on the benchmark Apr remain Bearish as market continue to head down after gaining to 3,110 level in the morning session, just about to touch the 34 period EMA tunnel on hourly char tshown above (which mentioned as resistance area in my previous post). With stocks level are likely to remain above two millions tons, palm oil prices are poised to continue trending downward judging on another lower high and lower lows formed yesterday. For today, support is located around 2,993 while resistance is pegged at 3,098.


Daily Pivot Point
R2= 3141
R1= 3098
S1= 3024
S2= 2993

 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.