Market Overview 22th Aug 2012

Wedneday, 22nd Aug 2012. The FBM KLCI finished unchanged on previous Friday right before Malaysia stock and Derivative exchange closed for Hari Raya Aidilfitri holidays. Other news to follow.

"- U.S. stocks turned lower Tuesday, with the S&P 500 index retreating from a four-year high as Apple’s drop overshadowed optimism that Europe would move to contain its debt crisis. After climbing 59 points, the Dow Jones Industrial Average DJIA -0.51%  lost 68.06 points, or 0.5%, to 13,203.58. The S&P 500 Index SPX -0.35%  slid 4.96 points, or 0.4%, to 1,413.17, with telecommunications, utilities and technology pacing the losses among its 10 major industry groups.

Since its Oct. 9, 2007 high, the market is down 9.4% overall, but information technology is up 16.6%, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. “Take out Apple, and technology is down 4.1%,” he said. The Nasdaq Composite Index COMP -0.29%  fell 8.95 points, or 0.3%, at 3,067.26."

" Asian markets ended higher Tuesday, with gains in Woodside Petroleum Ltd. helping lift Australia’s main share index to a three-and-a-half month high, while mainland China stocks were helped by state media reports of policy plans to boost consumption spending.

Australia’s S&P/ASX 200 index AU:XJO +0.44%  rose 0.4% to 4,402.7, its highest closing level since May 4. The Shanghai Composite Index CN:000001 +0.54% advanced 0.5% and the Shenzhen Composite Index added 1.4%. South Korea’s Kospi KR:SEU -0.16%  slipped 0.2% and Japan’s Nikkei Stock AverageJP:100000018 -0.16%  lost 0.2%. Hong Kong’s Hang Seng Index HK:HSI -0.02%  ended little changed, shedding 4 points, dragged down by weakness in Cnooc. CEO +0.60% , HK:883 -2.96%  The oil giant’s shares fell 3%, as investors reacted to its sharper-than-expected drop in first-half profit."

"-November Soybeans finished up 49 at 1732 1/2, 1 1/2 off the high and 51 1/2 up from the low. January Soybeans closed up 46 3/4 at 1720 1/2. This was 48 1/4 up from the low and 1 1/2 off the high. December Soymeal closed up 11.7 at 524.5. This was 12.4 up from the low and 3.4 off the high. December Soybean Oil finished up 1.69 at 56.22, 0.08 off the high and 1.93 up from the low. November soybeans posted a new high for the move today and closed near the session highs. Soybean meal traded higher while December soybean oil traded to a new 3 month high. Reports of lower than average soybean pod counts by a highly respected crop tour sent soybeans futures to new highs and the gains held throughout the session. Demand remains robust in the short term, with China's soy imports gaining 9.5% in July. Spot basis bids for soybeans on barges were steady to higher today after country movement was reportedly very slow. The water levels along the Mississippi River have forced barges to be loaded lighter than normal, and transit times have slowed. This along with solid export demand for soybeans has kept Gulf of Mexico soybean values firm. The US Dollar traded sharply lower on the day, which offered additional support to soybeans."

FKLI- Some Mild Retracement Before The Rally

There was some retracement occur on previous Friday as Long holders prefer to take some profit ahead of long weekend and weekdays holiday. At closes, the FBM KLCI closed slightly unchanged while Aug contract derivative equity index slides down abut 5 points to 1,645.50 level. Volume for the spot month was traded thin at 2,901 lots before the market closed for long Hari Raya holiday next week. The FBM KLCI closed marginally lower on Friday, weighed down by profit taking in Petronas related counters and Tenaga, though gains by Axiata and Maybank managed to offset the declines. Market should be resuming with positive expectation based on steady performance on regional market during the long holiday. Technically, upside momentum is here to stay as there is yet any sight of major correction so far. The backbone of further index uptrend momentum is likely supported by robust export demand and progressive improvement on Q2 GDP figures. For today, pivot point for support level is locate around 1,642 while resistance is pegged at 1,657.50

Daily Pivot Point
R2= 1657.50
R1= 1651.50
S1= 1642
S2= 1638.50

FCPO- Temporary Rally In Progress

CPO futures manage to clinch on another gain amid steady price recover on edible oil. Another good news will be edible oil export or outward shipping figures is likely picked up on recent festive occasion, and demand for palm oil should be slightly improve heading into end of third quarter. These news were backed by recent announcement on 1-15th Aug SGS and ITS palm oil export which rose about 10% and 7.60% respectively.  On previous Friday closed, the benchmark Nov rose about  RM20 to 2,962, volume for this specific month was traded higher to 18,803. Market is poised to recover further based on recent positive performance from Soy oil which recovered for the past few sessions when our market is closed for Hari Raya holiday. For the record, the most actively traded Soy oil was traded at 53.88 cents per pound on 21st Aug, 2.41PM +8GMT. Technically, the benchmark Nov had a small upside break out based on the hourly chart above on previous Thursday when the market just open gap up. And whether this upside break out should continue to bring more gains, we will have to observe how does the market re-act when it open today. Again, for this recovery to sustain, price formation such as higher low and higher high is the early indication for the market to rise further. For today, pivot point support for the benchmark Nov is expected around 2,922 while resistance is pegged at 2,992.

Daily Pivot Point
R2= 2992
R1= 2977
S1= 2942
S2= 2922
 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.