Market Overview 30th May 2012

Wednesday, 30th May 2012. The FBM KLCI surged amid strong rebound from regional market as U.S stock index futures recover during Asia trading session. Other news to follow.

"- U.S. stocks rallied 1% Tuesday, getting a lift from Greek polls signaling a commitment to the euro currency and on hopes of more global stimulus. Oil and gold ended lower after the euro dropped below $1.25 on concerns over Spain’s solvency. The Dow Jones Industrial Average DJIA +1.01% gained 125.86 points, or 1.01%, to 12,580.69 after rising 156.78 points. Of 30 components, 28 traded higher, led by Bank of America Corp. BAC +4.06%  , up 4.1%. The Nasdaq Composite Index COMP +1.18%  advanced 33.46 points, or 1.2%, to 2,870.99. U.S. markets were closed Monday for the Memorial Day holiday. The S&P 500 Index SPX +1.11%  rose 14.60 points, or 1.1%, to 1,332.42. All 10 industry sectors were higher, led by materials and tech. Health care, utilities and consumer staples lagged behind. "


"- Asia markets extended their rally on Tuesday, with Chinese stocks jumping on hopes for a policy stimulus from Beijing, while Taiwanese shares soared after the government made some changes to a proposed capital gains tax. China’s Shanghai Composite CN:000001 +1.20%  climbed 1.2%, Taiwan’s TaiexXX:Y9999 +2.89%  jumped 2.9%, Australia’s S&P/ASX 200 Index AU:XJO +1.14%  advanced 1.1% and Japan’s Nikkei Stock Average JP:100000018 +0.74%  added 0.7%. Elsewhere in the region, South Korea’s Kospi KR:SEU +1.41% gained 1.4% as trading resumed after a three-day weekend, while Hong Kong’s Hang Seng Index HK:HSI +1.35%added 1.4%. Among other notable gainers in the region, the Philippine stock index climbed 1.4%, accompanied by gains for its currency, after Moody’s raised the nation’s rating outlook to positive."


"-July Soybeans finished up 3 1/2 at 1385 1/2, 16 1/2 off the high and 6 1/4 up from the low. November Soybeans closed up 3 3/4 at 1293. This was 8 up from the low and 14 3/4 off the high. July Soymeal closed up 3.5 at 412.8. This was 4.6 up from the low and 4.4 off the high. July Soybean Oil finished up 0.01 at 50.13, 0.61 off the high and 0.32 up from the low. July soybeans saw early gains and a run to 1402 before closing just slightly higher on the day. Outside market forces were consider more of a positive force than the short-term weather outlook which calls for cooler weather and 1/2 to 1 1/2 inches of rain for more than 70% of the Midwest over the next 3-4 days. The rain forecast in the US plus what appears to be better weather in the forecast for both Russia and China over the near-term is helping to pressure the other grains and this helped to limit the buying support and also helped spark a sharp set-back off of the morning highs into the close. Oil was trading near unchanged late in the session while the meal market remained strong. Private forecasters continue to see tightening old crop ending stocks as both crush and export demand has been better than expected. Weekly export inspections came in at 12.4 million bushels which was in line with trade expectations. Exports need to average 11.8 million bushels per week to reach the USDA projection for the year. Traders see the short-term weather as a negative force but a shift back to a warmer and drier than normal pattern for the 11-15 day forecast models has helped to provide some support."

FKLI- Rebound With Strong Note. 

Local stock index and index futures recover better than expected with the support from regional indices. Most market was traded in green zone along with the recovery from U.S stock index and European stock index during Asia trading session yesterday. Most blue chips companies climbed after some serious retracement occur last week. The FBM KLCI rose 10.38 points to 1,565.32 while index futures for May contract surge about 14.50 points to 1,567 level, ending around two points premium against cash composite. What we are looking here could be a initial stage for further rebound despite the financial problems on Euro zone. Investors might weighted more on U.S market data such as consumer confidence, job, inflation, home sales, etc as these data will help to boost up stock market recovery faster. Technically, May contract has breached above immediate resistance level around 1,560, signifying eager Buying activities for the past two sessions. Apart from that, market is poised to recover further based on higher high and higher low formations are visibly formed on hourly chart shown above. For today, pivot support is located around 1,552 while resistance is pegged at 1,575.

Daily Pivot Point
R2=1584
R1= 1575
S1= 1552
S2= 1538

FCPO- Still Got Gas To Recover

Defying most traders expectation that current commodities market recovery would not last for more than two sessions, commodities prices have staged three days rallied since previous Friday. CPO futures was one of the commodities that joined the league of price recovery. The benchmark Aug rose about RM34 to 3,178 in tandem with Soya oil recent recovery to 50.45 cents per pound (6.00PM +8GMT), the day high for Aug contract was 3,193. Technically, Buyers are still in control as they manage to push the price above the second resistance trend line shown on hourly chart above. For the Bullish price action, the benchmark Aug created more higher lows and higher highs formation on 15 minutes charts, while it appear straight rallies on hourly chart with a minor paused before creating a higher high again. Time will tell how well this temporary rebound would last. Market is poised to recover further as there is no visible sign for Bearish formation yet. For today, support is located around 3,144 while resistance is pegged at 3,226.


Daily Pivot Point
R2=3226
R1= 3202
S1= 3144
S2= 3110

 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.