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Thursday, November 18, 2010

ZLBT's Pre-Opening Markets Round-up

Malaysian Market May Surrender 1,500-Point Level
The Malaysian stock market has finished higher now in two straight sessions ahead of Wednesday's holiday for Hari Raya Aidiladha - collecting just 4 points or 0.3 percent along the way. The Kuala Lumpur Composite Index remained just above the 1,500-point plateau, although now investors are bracing a modest decline as the market catches up on some negative momentum.

The global forecast for the Asian markets is flat with a touch of upside following a couple of sessions of heavy selling. Telecoms are expected to provide support, as are oil companies, properties and retailers - although financials may remain under pressure. The European markets finished slightly higher and the U.S. bourses ended mixed but little changed - and the Asian markets are also expected to tick higher.

The KLCI finished barely higher on Tuesday as gains from the industrial issues were erased by selling among the financial shares and the plantation stocks.For the day, the index added 1.98 points or 0.14 percent to finish at 1,503.54 after trading between 1,491.76 and 1,504.42.
Volume was 1.325 billion shares worth 1.736 billion ringgit. There were 645 decliners and 203 gainers, with 253 stocks finishing unchanged. Among the actives, Timedotcom, Time Engineering, Maybank and CIMB all finished lower, while Genting was unchanged and Sime Darby ended higher.

WALL STREET : Stocks End Mixed as Bears Take 5
Stocks flirted with modest gains today, as traders considered some mildlsoothing economic data. First up, the Labor Department revealed that core consumer prices rose just 0.6% in October on a year-over-year basis, marking the smallest increase on record. This tame report effectively calmed some of the inflationary fears sparked by the Fed's latest round of quantitative easing -- and, in fact, the data seemed to lend support to the central bank's argument that deflation is a more pressing concern.

Meanwhile, investors also learned that representatives from the European Commission, the European Central Bank, and the International Monetary Fund will pay a visit to Ireland on Thursday. Ollie Rehn, the European Union's commissioner for economic affairs, said the group will collaborate with Ireland "to determine the best way to provide any necessary support to address market risks, especially as regards the banking sector."
With the storm cloud of uncertainty hanging over the market starting to clear up, bears took a bit of a break from their recent selling spree.

In fact, the Dow Jones Industrial Average (DJIA – 11,007.88) was the only one of the three major market indexes to close lower today.

After spending time on both sides of breakeven, the Dow settled for a modest loss of 15.6 points, or 0.1%. Only 11 of the Dow's 30 components closed higher, with McDonald's (MCD) leading the pack. Meanwhile, Home Depot (HD) and Bank of America (BAC) set the pace for the 19 decliners. Despite today's dip, the Dow remains above both the 11,000 level and its rising 50-day moving average.

The S&P 500 Index (SPX – 1,178.59) barely budged today, adding just 0.3 point by the close. The SPX is trading directly above reliable support at its rising 10-week moving average.

Finally, the Nasdaq Composite (COMP – 2,476.01) turned in the day's best performance by adding 6.2 points, or 0.3%. The looming 2,500 level could become a short-term point of contention for the COMP, as this round-number region marked the site of its bearish gap on Tuesday.

Crude futures extended their losing streak to a fourth straight session, as traders continued to fret over the prospect of a rate hike from China. The threat of slower economic growth from the key oil-consuming nation seems to be the primary catalyst for commodity traders right now -- today's decline came even as the U.S. dollar weakened, and the government reported that crude supplies unexpectedly plunged last week by a whopping 7.29 million barrels. By the close, crude oil for December delivery shed $1.90, or 2.3%, to finish at a new four-week low of $80.44 per barrel.

Technical Outlook
CRUDE OIL (JAN) 11/18/2010 >>> The close under the 60-day moving average indicates the longer-term trend could be turning down. Declining momentum studies in the neutral zone will tend to reinforce lower price action. The close below the 9-day moving average is a negative short-term indicator for trend. The close below the 1st swing support could weigh on the market. The next downside objective is 78.95. The next area of resistance is around 82.28 and 83.98, while 1st support hits today at 79.76 and below there at 78.95.

January Crude Oil closed down 1.80 at 81.04. This was 0.39 up from the low and 2.13 off the high.

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