Market Overview 23rd May 2012

Thursday, 23rd May 2012. Malaysia stock index recovered yesterday after vicious series of Sell-off since last week due to European debt worries. Other news to follow.

"-- U.S. stock gains evaporated Tuesday as investors looked to a gathering of European leaders the next day, with concern about Europe overriding cheer that came with upbeat housing data. After a 71-point rise, the Dow Jones Industrial Average DJIA -0.01%   relinquished nearly 2 points to end at 12,502.81. The S&P 500 Index SPX +0.05%   added nearly 1 point to 1,316.63, with natural-resource companies leading the losses among its 10 industry groups. The Nasdaq Composite COMP -0.29%   fell 8.13 points, or 0.3%, to 2,839.08."

"- Asia stocks rallied Tuesday, led by gains for resource and tech shares, as the region tracked overnight advances for U.S. stocks and commodity futures. South Korea’s Kospi KR:SEU +1.64%  rose 1.6%, while Japan’s Nikkei Stock AverageJP:100000018 +1.10%  and Australia’s S&P/ASX 200 index AU:XJO +1.16%  each added 1.1%. In China, Hong Kong’s Hang Seng Index HK:HSI +0.62%  climbed 1.2%, and the Shanghai Composite CN:000001 +1.06%  put on 0.7%. Asia’s gains came as Wall Street bounced back Monday after suffering its worst performance of the year last week. "

"-July Soybeans finished down 31 1/2 at 1381, 36 3/4 off the high and 6 up from the low. November Soybeans closed down 25 at 1281 1/4. This was 10 1/4 up from the low and 29 3/4 off the high. July Soybean Oil finished down 0.49 at 50.43, 0.85 off the high and 0.08 up from the low. July soybeans pushed sharply lower on the session and pushed to the lowest level since March 30th and was trading 32 cents lower on the day late in the trading session. Traders believed that the warm and dry weather for the Midwest into next week is already priced but that the ridge may break down and allow more widespread rains into next week. Mid-day weather models helped confirm this idea with rain events in the 6-10 day and the 11-15 day models for the central and southern Midwest and the eastern Corn Belt; areas which have been dry. This, along with a negative tilt to outside markets due to a strong US dollar and weakness in gold and crude may have helped spark the long liquidation selling seen from fund traders. The sharp drop in corn and wheat plus news of record fast soybean planting pace added to the negative tone early. As of May 20th, a record 76% of the soybean crop was planted. Some traders remain concerned with uneven emergence and crusting issues for parts of the Midwest which have not seen rain in the past week or more. The wetter forecast might reduce these concerns. December meal closed sharply lower on the session as well and pushed under last weeks lows to move to the lowest level since March 30th."

FKLI- Technical Rebound 

Regional indices closed higher yesterday as most market were recovering from previous week Sell-off but the main concern on the European debt crisis might limit major upside. The FBM KLCI rose about 7.93 level to 1,546.84 while the May contract retraced about 1.50 level to 1,535.50, closing about 11 points premium to the cash composite. Traders remain cautious in the Futures market as there was no promising sign for major recovery yet and market is susceptible for another round of Sell-off if the European debt crisis gets out of control. Technically, we are looking at temporary rebound from previous sell-off. Market should be recovering for the moment after as it was oversold since last week.  Current low or major support level is located around previous low at 1,517. Market is susceptible for further correction if this major support is breach. For today, pivot support is located around 1,531 while resistance I pegged at 1,549.


Daily Pivot Point
R2= 1549
R1= 1542
S1= 1531
S2= 1527

FCPO-Congestion At The Moment

CPO futures manage to closed steadier yesterday amid recent technical rebound on Soya oil during Asia trading session. The benchmark Aug ended RM12 higher to 3,110 level while the most active traded Soy oil was traded 0.10 cents higher to 51.02, 9.17PM +8GMT. Market is likely rebound due to previous Sell-off while traders remain cautious ahead of Euro zone debt crisis and the recent strengthening of Dollar. Sentiment on palm oil remain weak for this second quarter as demand does not grow fast enough compared to stocks level. Technically, the benchmark Aug is congesting between 3,138~3,080, market is bound to recover further if the upper range around 3,138 breach or correct further if the price manage to breach below 3,080 level. For today, market is poised to open at least 20 points lower and might dip below 3,000 level due to weaker than expected price outlook on Soya oil and Soya bean. 


Daily Pivot Point
R2= 3146
R1= 3128
S1= 3091
S2= 3072
 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.