Market Overview 28th May 2012

Monday, 28th May 2012. The FBM KLCI is showing some sign for further recovery after coming out from previous week Sell-off, regional stock market outlook remain gloomy. Other news to follow.

"- U.S. stocks fell Friday, yet still managed a first up week in four, as investors fretted troubles in Spain, where banks are under severe financial strain and government bond yields shot higher. The Dow Jones Industrial Average DJIA -0.60%   lost 74.92 points, or 0.6%, to 12,454.83, with the blue-chip index up 0.7% for the week. Posting a 1.7% rise from the week-ago close, the S&P 500 Index SPX -0.22%   retreated 2.86 points, or 0.02%, to 1,317.82, with industrials hardest hit among its industry groups and telecommunications and utilities the best performing. The Nasdaq Composite COMP -0.07%   fell 1.85 point, or 0.1%, to 2,837.53, leaving it 2.1% higher from last Friday’s close."

" Chinese stocks declined in Asia Friday amid concerns weak bank credit could hurt the nation’s growth, while Hong Kong stocks staged a late rebound, tracking gains in Europe after strong German economic data.The session was marked by choppy trading in regional markets amid lingering uncertainty over the European debt crisis. China’s Shanghai Composite Index CN:000001 -0.74%  and Australia’s S&P/ASX 200 IndexAU:XJO -0.66%  dropped 0.7% each, while Taiwan’s Taiex gave up 0.8%. The losses came worries that Chinese bank lending may also be slowing in another indication of cooling growth indicators. Bloomberg News reported Thursday that the nation’s biggest banks may fall short of loan targets this year. Elsewhere in the region, while Japan’s Nikkei Stock Average JP:100000018 +0.20% ended 0.2% higher, while South Korea’s Kospi KR:SEU +0.53%  climbed 0.5%. Hong Kong’s Hang Seng IndexHK:HSI +0.25% rose 0.3%, erasing losses as European stocks edged higher after better-than-expected confidence data out of Germany."

"-July Soybeans finished up 7 1/2 at 1383 1/2, 3 off the high and 12 up from the low. November Soybeans closed up 13 1/4 at 1289 1/2. This was 20 3/4 up from the low and 1/2 off the high. July Soymeal closed down 1.3 at 409.5. This was 1.9 up from the low and 2.8 off the high. July Soybean Oil finished up 0.78 at 50.2, 0.01 off the high and 1 up from the low. July soybeans traded moderately higher on the day into the mid-session but macro economic concerns for the weekend, weakness in the stock market and a turn from lower to higher for the US dollar helped to spark a set-back from the highs. Traders are a bit uncomfortable believing that rains late next week will completely ease dryness concerns. While some rain will ease crusting issues and will alleviate top soil deficiencies in most areas, a return to warmer and drier weather into early June is seen as a strong possibility at this point and any confirmation of a ridging pattern beyond next week on the weather maps Monday night could spark more buying next week. This has helped to support the market today but the upside is limited by fears that actual rain amounts next week will be more than expected. Cash basis levels are improving along the river system on talk of firm export demand and basis in Iowa was up as processor margins are favorable. This strong demand trend for exports and for crush has added to the positive tone today. Open interest was down 1,713 contracts yesterday. Outside market forces are slightly positive but there are still significant macro economic fears for the long weekend."

FKLI-Some Lights For Further Recovery.

The FBM KLCI and stock futures manage to end the week positively despite ill concern about the Euro zone debt crisis that might get out of control. At previous Friday close, FBM KLCI rose 2.87 to 1,551.12 while the May contract rose 7.50 points to 1,549. Investors are weighing over the possible outcome if Greece does leave out of European union. But for the mean time, local stock index is recovering steadily after terrible Sell-off from previous two weeks. Market is likely continue its recovery judging from last Friday price action. The index futures manage to beach above previous lower high area and close above it. On another perspective the lower high formation that formed on previous Thursday is invalid at the moment. For today, we are expecting weaker opening session for the index futures amid weaker closing value achieved by Dow Jones index on precious Friday. Pivot support is located around 1,541 while resistance is pegged at 1,557. 

Daily Pivot Point
R2= 1557
R1= 1553
S1= 1541
S2= 1534

FCPO-

CPO futures recovered for the second straight session last week as Soya oil manage to halt its losing steak. The benchmark Aug up RM61 to 3,130, day high and low was 3,149~3,040. Investors were relieve after the palm oil futures manage to stop plunging due to some supportive data from cargo surveyors and expectation on improve palm oil demand on the upcoming months. Technically, after massive Sell-off occur, market is still far from reaching Bullish price outlook. What we are looking at the moment was a temporary rebound from an extreme oversold condition happened since early April. Bears are likely strike again if there is Selloff on Soya oil futures. For today, market is poised to recover judging on last two Bullish candles shown on daily chart and promising recovery from overnight Soya oil futures. Pivot point for support is located around 3,063 while resistance is pegged at 3,215. 

Daily Pivot Point
R2= 3215
R1= 3172
S1= 3063
S2= 2997
 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.