Market Commentary 3rd May 2012

Wednesday, 3rd May 2012. The FBM KLCI surged amid recent positive performance on regional index plus record high level on U.S stock index performance. Other news to follow.

"- U.S. stocks finished mostly lower Wednesday as investors second-guessed how much a disappointing jobs report from the private sector would be reflected in the nonfarm payrolls report in two days. The Dow Jones Industrial Average DJIA -0.08%   fell 10.75 points, or 0.1%, to 13,268.57. The S&P 500 Index SPX -0.25%   shed 3.51 points, or 0.3%, to 1,402.31, with energy falling hardest and consumer discretionary faring best among its 10 major sectors. The Nasdaq Composite COMP +0.31%   added 9.41 points, or 0.3%, to 3,059.85."


"- Asian stock markets broadly advanced Wednesday, as investors reacted to Chinese manufacturing data and a move to cut trading costs, while a weaker yen helped Japan’s market.

Investors returning from a one-day break in Hong Kong pushed the Hang Seng IndexHK:HSI +1.02%  up 1%, while the Shanghai Composite Index CN:000001 +1.76%  rose 1.8% as mainland Chinese bourses traded for the first time this week. Among other Asian stock markets back from a holiday Wednesday South Korea’s Kospi KR:SEU +0.86% rose 0.9%. Japanese and Australian markets were the only major Asian bourses open Tuesday, and Wednesday’s gains for both markets were less pronounced than elsewhere in the region. The Nikkei Stock Average JP:100000018 +0.31%  rose 0.3%, while the Australian S&P/ASX 200 indexAU:XJO +0.14%  rose 0.1%."

"-July soybean futures posted a key bearish reversal today, rallying to a new contract high and then promptly caving to sellers. Other contracts also faced heavy selling heading into the close and finished 17 3/4 to 29 1/2 cents lower. Nearby contracts’ rally to new highs triggered a round of profit taking. Also encouraging this was CME’s late announcement that it will alter its initial margin requirements as of May 7. "

 

FKLI- Recovery Is Coming

Stock index rose to weekly high yesterday as regional index manage to recovered from previous week losses which might due to U.S stock market performance recently. With both stronger economy recovery and promising manufacturing data that indicate sustainable employment on China and U.S, the concern over economy slow down on this near term will be gradually offset. Technically, the May contract have breach above the immediate resistance level after it went for corrections last week. With such ability for the index to surge with volume that recorded three times higher on usual trading day, it signifies that Buyers were eager accumulating Long positions when the index is rising yesterday. For this week, index futures is likely to continue recover as it might formed a base for support as the index is unable to create a new low after it formed lower high on hourly chart shown above. For today, support is located around 1,571 while resistance 1,590.

Daily Pivot Point
R2= 1596
R1= 1590
S1= 1571
S2= 1558


FCPO- Ended Weaker, Remain In The Cage

CPO futures tumble about RM19 to 3,452 due to overnight Soy oil weakness and concern over higher production build up due to current dry weather condition. Fortunately, the benchmark July did not breach below the horizontal support trend line yet (shown on hourly chart above) yesterday as Soy oil manage to recovered 0.33 cents to 55.30 cents per pound on 6.40pm during Asia trading session, +8GMT. Even though the price range for the benchmark July still stay within the cage, the support trend line in this case will be easily breach if there is no substantial recover from Soy oil futures soon. Medium term weakness is now become prominent as there are more lower high formation formed on daily and hourly chart currently. This market can just collapse if the July contract manage to breached below the support trend line at 3,440 level. For today, downside risk will be magnified if there was no promising recovery from Soy oil. Conclusively, yesterday market price action was just a tip of the iceberg, it could get really ugly if the support trend line get violated.


Daily Pivot Point
R2= 3483
R1= 3467
S1= 3438
S2= 3425
 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.