Market Overview 26th March 2012

Monday 26th March 2012. The FBM KLCI closed higher for the week as regional index was closed in mixed note right after China indication on slowing economy growth. Other news to follow.

"- U.S. stocks ended a losing week on a more optimistic note Friday, helped by a rally in energy and cyclical shares as buyers bought into recent weakness and benefited from a falling dollar. The Dow Jones Industrial Average DJIA +0.27% rose 34.59 points, or 0.3%, to 13,080.73. It lost 1.2% for the week, its worst week since mid-December. The S&P 500 SPX +0.31% rose 4.33 points, or 0.3%, to 1,397.11. It lost 0.5% for the week, its worst week of the year and broke five straight weeks of gains. The Nasdaq Composite COMP +0.15% rose 4.60 points, or 0.2%, to 3,067.92, up 0.4% for the week."

"- Most Asia markets fell Friday amid renewed concerns about global growth, with losses for banks and property firms pushing Hong Kong into the red, while a stronger yen weighed on Japanese exporters. Japan’s Nikkei Stock Average JP:100000018 -1.14% , Hong Kong’s Hang Seng Index HK:HSI -1.11%  and the Shanghai Composite CN:000001 -1.10%  each fell 1.1%. Australia’s S&P/ASX 200 index AU:XJO -0.08%  edged down a more modest 0.1%, while South Korea’s Kospi KR:0100 +0.04%  shrugged off early weakness to finish fractionally higher. For the week, Hong Kong was trading down 3%, Japan was 1.2% lower, while South Korea was 0.4% weaker."

"-Crude futures closed higher Friday, buoyed by concerns about global supplies following a report of a drop in Iranian oil exports, as traders digested the week’s economic data, searching for hints on the prospects for demand. Oil for May delivery CLK2 +1.33%  rose $1.52, or 1.4%, to settle at $106.87 a barrel on the New York Mercantile Exchange."

"-May Soybeans finished up 16 1/4 at 1365 3/4, 3 3/4 off the high and 16 1/4 up from the low. July Soybeans closed up 15 at 1371 3/4. This was 15 up from the low and 4 1/2 off the high. May Soymeal closed up 2.9 at 373.0. This was 2.9 up from the low and 1.5 off the high. May Soybean Oil finished up 0.92 at 54.88, 0.02 off the high and 0.95 up from the low. May soybeans closed 16 1/4 cents higher on the session and just a few cents off of the early highs but this still left the market down 8 1/4 cents for the week. A strong cash market, concerns that US producers will not increase planted area enough to absorb the increased demand due to lower South America production, talk that China bought more US soybeans this week and a weak US dollar all contributed to the strong trade overnight."

FKLI- Still Moving Up Slowly.

Stock index closed firmer on previous Friday as the FBM KLCI rose about 2.59 points to 1,585.83 level while index futures for March contract went up about 4 points to 1,588 level. Most regional market were closed lower due to China's reports on impending economy slow down. Our local market have yet receive any negative impact from the China's news yet, for the moment. Technically, market is still hovering on positive momentum judging on higher lows formation with solid support trend line that is yet breach. Even though Bears may not be significantly presence in the market, this does not eliminate the possibilities for the market to correct in the future if anything does go wrong from here. Bear in mind that the equity market have recovered for the past six months and there was no major correction up until now. Major resistance still located at 1,600 level currently and even though it is just meters away from breaching this level, but it would not be easily breach. For today, support is located around 1,581 while resistance is pegged at 1,592.

Daily Pivot Point
R2= 1592
R1= 1590
S1= 1584
S2=1581

 FCPO-Rose Again To At Least 9- Months High.

CPO futures sudden reverse to the upside on previous Friday after most of the technical indications were pointed it should head down further for price adjustment. Market is resilient and there are so many causes for the price to move and therefore we cannot pin point the exact reason why it move that way. Even with perfect indication and trade set up, anything can go wrong with that particular trade as market environment is always evolving and changing every seconds. What happened on previous Thursday was a strong indication for the market to go down judging on lower high and lower low candles that formed in almost any time frame (with increased volume and open interest), but unfortunately market ignore most of the selling pressure previously and suddenly gap up on Friday. To many surprises, it stay positive throughout the morning session and gap up again when it resume on afternoon, prompting more Short holders to cover their positions. Short covering help the price to hike and attract more Buyers to step in and Buy due to self fulfill prophecy. Trader need to re-act swiftly to the changing environment in the market with no second thought when their plan suggest them to cover their position, turn the other way round and initiate position. At previous Friday close, the benchmark June rose RM84 or 2.51% to 3,426, this was 9-months high so far. Bulls were no doubt the winner for previous week as it manage to recovered all of the correction done in early week. For today, support is located around 3,378 while resistance is pegged at 3,484.

Daily Pivot Point
R2=3484
R1=3455
S1=3378
S2=3330

 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.