ZLBT Chats

Saturday, April 30, 2011

WALL STREET : DJIA Celebrates The Royal Wedding

Dow Gifted The Newly Weds A 12.8K Ring
Forget quantitative easing or Fibonacci retracement or earnings growth. When it comes to the market, only one set of information is worth trading on: Royal Weddings.

Well, maybe not quite. But as the new Princess Catherine does not promise at Westminster Abbey to obey Wills, and presumably vice-versa, the real question is, will your portfolio obey your command?

The major market indexes continued their relentless climb into multi-year high territory today, even though the bullish momentum was moderate, at best. Traders had a mixed bag of earnings and economic news to consider, with every upbeat report paired with a less impressive data point. Caterpillar (CAT) triumphed in the earnings spotlight, while Microsoft (MSFT) disappointed; meanwhile, the Chicago PMI fell short of expectations, but consumer spending statistics were stronger than anticipated. Stocks found fresh peaks fairly early in the session, but buying power waned as the morning turned to afternoon. Advancers topped decliners by almost a 2 to 1 basis on the New York Stock Exchange, where more than 975 million shares changing hands at the close of the trading session. Nevertheless, with "sell in May" season just around the corner, the bulls won the day, the week -- and the month of April.

The Dow Jones Industrial Average (DJIA – 12,810.54) ended on a gain of 47.2 points, or 0.4%, and collected its first daily finish north of 12,800 since May 20, 2008. The blue-chip barometer topped out at 12,832.83 in intraday action, not far from a three-year peak. Caterpillar paced the 18 advancing Dow components with a 2.5% gain, while Microsoft swallowed the steepest loss of the dozen decliners, off nearly 3% for the session. The Dow added 2.4% for the week, and nearly 4% for the month.

ANALYST QUOTE : “The Dow gave the royal wedding a token gift by finishing to the upside. But kudos should really go to [Federal Reserve Chairman] Ben Bernanke, as he vows to keep interest rates low forever, or at least for awhile.”

The S&P 500 Index (SPX – 1,363.61) tacked on just 3.1 points, or 0.2%, but found its own new high of 1,364.56 -- the index's best price since June 2008. The SPX ended the week about 2% higher, bringing its April gain to 2.9%. Finally, the Nasdaq Composite (COMP – 2,873.54) settled just a hair's breadth above breakeven, adding 1 point for the day. However, the COMP joined its peers by rising to a session peak of 2,876.83, in territory not explored since January 2001. For the week, the COMP climbed 1.9%, and the index racked up a healthy gain of 3.3% in April.

The U.S. unemployment rate is widely expected to stay put at 8.8% when the April labor report is released on Friday. Despite those broad expectations, investors are anxiously anticipating its release.

Economists are predicting the U.S. added just under 200,000 non-farm jobs in April, slightly less than the previous month. Nevertheless, the numbers appear to indicate that labor market continue to strengthen rather than weaken.

“We expect employment growth to ease to 185,000 in April from 216,000 in March. A slight uptick in initial unemployment insurance claims suggests that job creation has slowed slightly. We anticipate private job creation of 200,000, partly offset by a loss of 15,000 government jobs. We expect the unemployment rate to remain steady at 8.8%, after recent sharp declines,” IHS Global Insight economists Patrick Newport and Nigel Gault wrote in a report to clients.
Meanwhile, first-quarter earnings season continues in high gear with reports scheduled to arrive from bellwether companies in virtually every sector of the economy.

ANALYST QUOTE : "The market feels a little on the high side, but these good earnings figures are keeping stocks slowly moving higher,"

ZLBT Weekend Reviews >>> FBM KLCI Futures

FKLI : Skating On Thin Ice
For the week ended on the 29th of April, 2011, the FKLI Spot month contract gained a total of 9.5 points Friday-to-Friday. with a weekly high of 1539.5 (27/04/2011) and a weekly low of 1516 points recorded last Tuesday. Total market volume traded was 3168 (daily) or 39,792 weekly total contracts versus 31,485 the previous week.

Weekly Hi/Lo range 1539.5 - 1516.0 >>> 23.5 pts. Open / Close range points for the week >>> 1521.0 / 1532.0 = 11. Today Spot month contract April 2011 contract expired at 1532.0

Main Chart : Last week ended 29/04, the FKLI was struggling to stay above the 4, 9,18 EMA (Short-term). The bulls managed to survived but still get underpined by the 1537 Fibonacci Retracement 61.8% for year 2011, Failure to break away convincingly from the 4, 9, 18 EMA indicates the half strength of the FKLI at best. April Spot Month closed at 1532, below the Daily Mid BB.

Bollinger Bands : Basically, the daily Bollinger Bands is still contracting, and this suggests that the FKLI is likely to remain in a consolidation mood. Generally, when the Bollinger Bands is contracting, the direction of the FKLI is expected to remain unpredictive.

MACD : The daily MACD histogram Round Bottom is still uncompleted but with slight improvement nevertheless. Technically, when the MACD histogram is rising, it suggests that the FKLI is slowly gaining strength.

RSI : The daily RSI has risen slightly above neutral 50%, but it has not broken above 70%. If the RSI should climb above 70%, it would be a short term bullish signal for the FKLI. April expired with RSI at 53 >>> a nose above waterline neutral 50%.

Stochastic: Daily Stochastic improved somewhat to 53.90%, inching above the short term neutral territory. This suggests that the short term movement of the KLCI is likely to stay sideway with a tad of improvement bias If May 2011 were to continue where April left off.

Summarizing The Week
Daily Short term movement of the FKLI is noticed to be on the recovery side and since the FKLI has not formed any downtrend, a minimal advantage favours the buyers. Unless, the FKLI breaks below the 4, 9, 18 EMA and should begin to form lower-highs, then the possibility of the FKLI revisiting the 1486 low of the Fibonacci Retracement for this year. As per see over last week performance, the FKLI undertone is not as strong as one would wish it to be. With the major daily technicalities yet to display any potentials to form regular higher highs, a bullish mindset is questionable. Exuberance is an option not the norm.

Weekly mid-term movement is still unconvincing with the RSI 14-day closing the week at 56.1. Stochastic reads 54.3% but with the 14 below the 3 with a death cross flashing a sell signal. Mid-term FKLI traders would feel more confident if the 14-day recross the 3-day line and progress closer to the 70% territory. Weekly histogram remains below the MACD Zero triggerline indicating below par strength of the weekly FKLI. A histogram above and in Round Top formation means more upthrust for the FKLI.

Noticeably, the FKLI weekly candles are seen to be in a Bowl Formation it is stil uncomfortably close to the Bollinger Middle Band. Another green weekly candle will force the BB to expand and with prices above Mid BB during expansion, the sentiments may shift from neutral/bearish to neutral bullish.

The next downsider to monitor is the 30 SMA which is providing support together with the Mid BB. The double indemnity is not very supportive, technically speaking. All it takes is 2 or more negative sessions and the weekly FKLI will turn into a red candle below the mid BB. Once the 30 SMA has been violated, the bears will storm the bull's fort. Should the bears launch an all out attack after the weekly SMA 30 had been neutralised, selling into strength would be a fine option.

For the done week, the FKLI can best be sum up as "unsecured safety."


Friday, April 29, 2011

ZLBT Forward Views >>> MYR, Economy and all that jazz

Economic Revival & Corperate Earnings To Drive FBM KLCI
The KLCI is likely to open higher taking cues from the strong U.S. markets overnight, a local dealer says. "The sentiment remains positive, but we are still likely to continue to trade in a range in the near term in absence of any local leads," he says, adding that the market will look to Malaysia's monetary policy meeting on May 5 for cues on the local economy. He tips a 1530-1550 range after the KLCI ended 0.4% higher at 1535.30 Thursday. Axis-REIT may rise on strong 1Q results; Hong Leong Bank (5819) may rise after the Malaysian High Court dismisses a suit by private equity firm Primus Pacific Partners to declare illegal the planned takeover of EON Capital (5266) by Hong Leong Bank.

Ringgit Rocks On
The USD/MYR is higher at 2.9700 vs 2.9640 in late Asian trade Thursday, as the local currency takes a breather after its recent winning streak, hitting multi-year highs along the way. The pair touched a fresh 13.5-year low of 2.9610 Thursday. "There is some short covering which is supporting the pair at the moment," a local trader says. Still, he reckons the pair could turn lower later in the day and tips support at 2.9650.

The Malaysian economy likely grew at least 4.5% in the first quarter of 2011 compared with the same period last year, a senior cabinet minister was quoted by state news agency Bernama as saying Thursday.

"Based on the data compiled in the first two months, the growth is seen not to be less than 4.5%," Nor Mohamed Yakcop, minister in charge of economic planning, was quoted as saying.

He said the trade-driven country may grow faster in the second half of 2011, with gross domestic product likely expanding 5%-6% for the full year. The economy grew 7.2% in 2010.

The official numbers for first-quarter GDP are due out next month.


WALL STREET >>> Dow Closing In On 3-Year High

DJIA Defeats 12,700 on Bulls' Second Wind
Major Indexes All At Multi-Year High
Stocks spent the first half of the session loitering near the breakeven line, as unimpressive economic data initially rained on the bulls' parade. Most notably, the Commerce Department estimated first-quarter gross domestic product (GDP) growth at an annual rate of 1.8%, marking a notable slowdown from the 3.1% growth seen in the fourth quarter of 2010. In similar fashion, the Labor Department said first-time filings for unemployment benefits climbed to a three-month peak last week, exacerbating concerns about a still-sleepy job market. Nevertheless, the bulls got a second wind in afternoon trading, shrugging off the uninspiring data to extend Wednesday's Fed-induced rally. As investors opted for rose-colored glasses, the Dow Jones Industrial Average (DJIA) and its peers continued their journey into new-high territory, while the CBOE Market Volatility Index (VIX) -- otherwise known as the market's "fear gauge" -- ended near a fresh multi-year low.

The Dow Jones Industrial Average (DJIA – 12,763.31) picked up steam in the final hour of the session, adding 72.4 points, or 0.6%, by the bell. Earlier in the day, the blue-chip barometer soared as high as 12,776.14, marking its loftiest price since May 2008. Only seven of the Dow's 30 components bucked the trend, with Hewlett-Packard (HPQ) leading the black sheep with a loss of 1.2%. Boeing (BA), on the other hand, paced the bullish majority with a gain of nearly 3.2%.

The S&P 500 Index (SPX – 1,360.48) also benefited from an eleventh-hour surge of buyers, tacking on 4.8 points, or 0.4%, by the close. The broad-market index finished just a hair's breadth from its intraday acme of 1,361.71 -- in territory not explored since June 2008. Finally, the Nasdaq Composite (COMP – 2,872.53) reversed early losses to end with a gain of 2.7 points, or 0.1%, after topping out at 2,874.59 -- a 10-year peak -- just before the close.

Analyst Quote
“Overall it’s been a good period, earnings have come in better than expected and the market is just sort of dealing with that right now. We’re very overbought but may have more room to run,” 


Thursday, April 28, 2011

ZLBT Midday Views >>> CPO + Soybean Oil

CPO price competitive to Soybean Oil
Discount $170 per-ton cost effective demands
Crude palm oil futures on Malaysia’s derivatives exchange extended declines for a fourth session Wednesday, tumbling to their lowest level in a week as traders turned cautious amid weakness in other agricultural bourses.
The benchmark July contract on the Bursa Malaysia Derivatives ended MYR53, or 1.6%, lower at MYR3,277 a metric ton, its lowest close since April 19.

However, downside may be capped in the coming weeks as demand may pick up ahead of major festivals in the Middle East and Asia over the next few months.

Palm oil's wide discount–around $170/ton–to rival soyoil may also support buying interest. Palm oil and soyoil compete in similar export destinations.

"With improving price competitiveness versus soyoil, there is a rising likelihood that palm oil will gain market share," Citigroup said in a note.

Citigroup said it expects crude palm oil prices to average at $1,050/ton in 2011, as rising production in the second half will drag prices lower. That price level would be equivalent to MYR3,150/ton, according to Dow Jones Newswires calculations.

TECHNICAL ANALYSIS >>> Soybean Oil : 28/04/2011
The daily stochastics have crossed over down which is a bearish indication. Declining momentum studies in the neutral zone will tend to reinforce lower price action. The market's close above the 9-day exponential moving average suggests the short-term trend remains positive. It is a slightly negative indicator that the close was lower than the pivot swing number.
The next downside objective is 57.36. The next area of resistance is around 58.91 and 59.35, while 1st support hits today at 57.91 and below there at 57.36.

ZLBT Trade Strategy
Buy CPO 3260 > 3280 with a 3230 stoploss
Target >>> 3323 @SMA 15
Next Target >>> 3380 Technical Chart Resistance


ZLBT Morning Views : Bursa Malaysia + Wall Street

Bursa Malaysia May Continue Winning Streak Today
The Malaysian stock market has finished higher now in three straight sessions, adding just over 6 points or 0.4 percent along the way. The Kuala Lumpur Composite Index finished just below the 1,530-point plateau, and now analysts are expecting the market to extend those gains when it kicks off trade on Thursday.
The global forecast for the Asian markets remains optimistic following upbeat economic news from the United States and continued solid earnings reports. Gold miners and retail stocks figure to lead the markets higher, although oil companies may be dented by profit taking. The U.S. markets finished mostly higher and the European bourses were mostly so, and the Asian markets also figure to track to the upside.

The KLCI finished slightly higher on Wednesday as solid gains from the financial shares were offset by weakness from the property stocks and plantations.

The benchmark FBM KLCI is hovering around the key resistance of 1,530 and once it breaches this level, the next resistance would be at 1,550.

Meanwhile, the ringgit continued to chart a new 13-year high versus the US dollar, riding on the weakening greenback.

At 5pm, the local unit stood at 2.9780/9801 as investors awaited the outcome of the US Federal Reserve's decision on interest rates yesterday.

For the day, the index added 2.57 points or 0.17 percent to finish at 1529.91 after trading between 1,526.58 and 1,534.69. Volume was 1.114 billion shares worth 1.431 billion ringgit. There were 454 decliners and 320 gainers. Volume on the Main Market increased to 832.859 million shares worth RM1.365 billion from 793.167 million shares, worth RM1.221 billion recorded on Tuesday.Among the actives, Genting, AMMB, CIMB Holdings and Sime Darby all finished higher, while Tenaga Nasional, Digi.com and BAT ended lower.

Transperant Fed Propels DJIA North Of 12600
Wall Street offers a positive lead as stocks saw some further upside during trading on Wednesday after showing a strong upward move in the previous session. The markets benefited from a positive reaction to the Federal Reserve's latest monetary policy announcement and Chairman Ben Bernanke's accompanying news conference. While stocks showed a lack of direction in morning trading, buying interest emerged as traders digested the Fed's monetary policy announcement.

As expected, the Fed once again left interest rates unchanged at near-zero levels and indicated that it will continue its asset purchase program through the end of June. In the statement, the Fed noted that the economic recovery is proceeding at a moderate pace and said overall conditions in the labor market are improving gradually.
Stocks saw further upside as Bernanke held his news conference later in the afternoon, with the Fed Chief predicting that the economic recovery would continue at a moderate pace and reiterating that measures of underlying inflation remain stable despite recent increases in commodities prices. The Fed Chairman also noted that monetary policy actions must be taken with an eye toward future due to the delayed impact of policy changes.

The Dow Jones Industrial Average (DJIA – 12,690.96) settled on an impressive gain of 95.6 points, or 0.8%, as all but two of its 30 components powered higher. In the process, the Dow collected its first daily close above 12,600 since June 5, 2008, and its highest settlement price since May 20, 2008. On an intraday basis, the index tagged a new multi-year peak of 12,708.37. General Electric paced the 28 advancing blue chips, thanks to bullish comments from its CFO, while Cisco Systems was the lone Dow member to finish in the red. United Technologies finished flat.

The S&P 500 Index (SPX – 1,355.66) topped out at 1,357.49 in intraday action, before ending with a gain of 8.4 points, or 0.6%. Today marks the SPX's best daily finish since June 17, 2008. Finally, the Nasdaq Composite (COMP – 2,869.88) rounded out the rally by adding 22.3 points, or 0.8%. The COMP peaked at 2,870.80 today -- in territory the index hasn't explored since January 2001.

Earlier in the day, the Commerce Department released a report showing that new orders for manufactured durable goods increased by much more than anticipated in March. The report showed that durable goods orders surged up by 2.5 percent in March following a revised 0.7 percent increase in February. Economists had expected orders to increase by 1.9 percent compared to the 0.9 percent drop that had been reported for the previous month.

On the earnings front, aerospace giant Boeing closed up by 0.8 percent after reporting first quarter earnings of $0.78 per share on revenues of $14.9 billion. Analysts had expected earnings of $0.72 per share on revenues of $15.13 billion. The company also reaffirmed its 2011 guidance.

FBM KLCI Futures Closed In Discount To Cash Market

FKLI Closed Weaker Whilst FBM KLCI Closed Firmer
The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) futures on Bursa Malaysia Derivatives closed lower yesterday.
Spot month April 2011 traded within a Hi / Lo range of 17 points.
Open / Close traded with a -8.00 points range.
After opening 4 points higher, April 2011 shed 4.5 points to close lower at 1526.5. May 2011 also dipped 4.5 points lower at 1526.5 while June 2011 lost 3.5 points to 1,526.5 and September 2011 declined 2 points to 1,524.0.
Turnover for all months contract increased to 23,877 lots from 22,213 lots recorded on Wednesday with April recording a lower volume of 12756 against 13145 previous session. Open interest was higher at 31,743 contracts compared to 23,027 previously.

On the cash market, the FBM KLCI was up 2.57 points to 1,529.91.


Wednesday, April 27, 2011

ZLBT Views : Dow Futures Technicalities / Recommendations For Tonight


The Dow closed higher on Tuesday as it extends the rally off the 2009 low. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near-term.

If the Dow extends the aforementioned rally, monthly resistance crossing at 13,136 is the next upside target. Closes below last Monday's low crossing at 12,093 are needed to confirm that a short-term top has been posted.

First resistance is today's high crossing at 12,605. Second resistance is monthly resistance crossing at 13,136. First support is the 20-day moving average crossing at 12,368. Second support is last Monday's low crossing at 12,093.

FBM KLCI + FKLI >>> Volume much needed for a consistent trend

FKLI : The turn had been made
With the Harami as foundation Support

FBM KLCI is a different kettle of fish altogether
Equities and derivative futures are as similar as a crocodile and a shark. Both are awesome killers albeit each in it's own respective manner. One is an amphibian whilst the other is a fish. Crocs lay eggs while the shark doesn't.
The FBM KLCI (aka a CROC) is a lazy, stubborn and most likely immobile while waiting for it's chow. The FKLI (aka a SHARK) on the other hand goes hunting for preys. Crocs can float like a log for as long as needed. Knows now why they call your old stocks "deadwood?"
The Croc gotcha ..... hahaha!!!
Sharks are always active; on the hunt and whenever they get a whiff of "yum yum", they goes into a frenzy feeding mood. Their favourite food is Premiums & Discounts. LOL!!!! And today Sharkey have a +3.66 pts Premium over the Croc .... better take note of that before you end up as breakfast, lunch or on the dinner table.
Ah Croc is, as always, lazy & stubborn and since we have to be a cowboy to ride a bull then you need to be Tarzan to ride a croc :P
Stay cool >>> best option WAIT and don't blink.

Crocs Alive !
Have you been to a crocodile farm? ZL think feeding time will be on schedule. I can see Ah Croc out of the water now >>> basking in the sun and waiting for it's "yum yum."

Note : The FBM KLCI is still below the 14, 21, 31 EMA - no dinner bell ringing yet. Unfortunately, it looks like dinner will not be served until the EMAs are taken out or till the Stochastic touches the 70% margin. Hold on to your hat or would you rather be that showman who puts his head into the jaws of Mr Croc?
Keep me entertained, the market is boring.

As for the FKLI Shark, always on the move and ready for the kill. You becareful of this bugger >>> Be Very Very Careful indeed. With a little more caution & patience, we may even get some sharkfin soup in our  menu.

Buy On Weakness
(FKLI Only)


WALL STREET : Earnings, Consumer Confidence Fuel the Bulls' Fire

DJIA, S&P 500 Assail New Heights
Nasdaq approached 10-year-high territory
After kicking off the week on a timid note on Monday, stocks blazed a more defined -- and unarguably bullish -- path today. A round of well-received earnings reports got the buyers' ball rolling, with solid showings from 3M Company, Ford Motor, and UPS inspiring optimism about the fiscal health of U.S. big caps. In the same vein, a rosy report on consumer confidence, as well as a dividend hike from tech titan IBM Corp., only stoked the bullish flames. As the Street adopted a "carpe diem" attitude, the Federal Open Market Committee's (FOMC) looming policy decision was put on the proverbial backburner, with all three major market indexes tagging fresh multi-year peaks by the close.

The Dow Jones Industrial Average (DJIA – 12,595.37) skyrocketed right out of the gate, topping out at 12,613.16 -- its loftiest level since June 2008 -- before ending with a gain of 115.5 points, or 0.9%. Only six of the Dow's 30 components bucked the trend, with Bank of America leading the black sheep with a loss of 1.7%. Meanwhile, Caterpillar paced the bullish majority with a gain of 2.9%, while tech concerns Cisco Systems and Intel Corp. each tacked on a respectable 2.5%.

The S&P 500 Index (SPX – 1,347.24) rallied as high as 1,349.55 -- in territory not explored in nearly three years -- before settling on a gain of nearly 12 points, or 0.9%. Not to be outdone, the Nasdaq Composite (COMP – 2,847.54) soared to 2,856.61 -- its highest price since October 2007, and within striking distance of a 10-year acme -- before trimming its lead to 21.7 points, or 0.8%, by the close.

Dow Jones Industrial Average
The Dow closed higher on Tuesday as it extends the rally off the 2009 low. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near-term. If the Dow extends the aforementioned rally, monthly resistance crossing at 13,136 is the next upside target. Closes below last Monday's low crossing at 12,093 are needed to confirm that a short-term top has been posted.

First resistance is today's high crossing at 12,605. Second resistance is monthly resistance crossing at 13,136. First support is the 20-day moving average crossing at 12,368. Second support is last Monday's low crossing at 12,093.

Black Gold ended red in volatile session
Crude futures ended a volatile session in the red today, as traders exercised caution ahead of the FOMC's policy decision tomorrow. Earlier in the session, black gold explored positive territory thanks to an ailing greenback and news of refinery outages in Texas City. By the close, crude oil for June delivery gave up 7 cents, or 0.1%, to settle at $112.21 per barrel.

June crude oil closed slightly lower due to light profit taking on Tuesday as it consolidated some of last week's rally. The high-range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. If June renews the rally off March's low, the 75% retracement level of the 2008-2009-decline crossing at 121.09 is the next upside target. Closes below the reaction low crossing at 105.98 would confirm that a short-term top has been posted while opening the door for a larger-degree decline into early-May. First resistance is this month's high crossing at 114.05. Second resistance is the 75% retracement level of the 2008-2009-decline crossing at 121.09. First support is the 20-day moving average crossing at 109.29. Second support is the reaction low crossing at 105.98.

Tuesday, April 26, 2011

30 x Mid BB Breakout Stocks 4ur Perusal

*Note : To qualify in this list below, the first sorting criteria is stock price must have just climbed or stayed ABOVE the middle Bollinger Band, followed by a second criteria that trading volume for the day must be significantly strong. This is a good watch list for momentum traders looking for shortterm BUY ideas, as they are laggards with good upside potential towards the upper Bollinger band or higher to TAKE PROFIT/SELL.
Caveat : Some stocks may continue to stay range bound and trade sideways, hence traders should refer to their respective charts to spot accumulation (volume growth) or breakout patterns.

ZLBT Random Stock Picks >>> E&O + L&G

E&O (Code : 3417)
Technical Comments: While E&O shares close above the upper Bollinger band yesterday is encouraging, a confirmed breakout above the7/1/11 high of RM1.38 on strong volume is needed to trigger rally towards RM1.51 (1.236FP), RM1.59 (1.382FP) and RM1.65 (1.5FP), with good support at RM1.25 (76.4%FR).

L&G (Code :: 3174)
Technical Comments : L&G shares look set to recover towards 53sen (76.4%FR) on positive technical momentum, with further strength to meet resistance from the 2/11/10 high of 58.5sen. A breakout would target 64sen (1.236FP), 67sen (1.382FP) and 70sen (1.5FP), while support comes from the 50-day moving average (45sen). 


ZLBT morning Views : Bursa Malaysia + Wall Street

Malaysia Shares Draw Flat Lead
The Malaysian stock market picked up just a point on Monday - but that was enough to end the two-day losing streak in which it had declined nearly 10 points or 0.6 percent. The Kuala Lumpur Composite Index finished just shy of the 1,525-point plateau, and now analysts are expecting to see the market remain in that neighborhood when it opens on Tuesday.

The global forecast for the Asian markets is mixed with a hint of downside on caution ahead of a slew of economic and corporate data coming later this week. Gold and oil stocks may see consolidation, while airlines and technology stocks are expected to tick higher. The European and U.S. markets finished mixed but little changed, and the Asian markets are tipped to follow that lead.

The KLCI finished barely higher on Monday as gains from the financial shares and industrial issues were offset by softness from the plantation stocks.

For the day, the index added 1.30 points or 0.09 percent to finish at 1,524.05 after trading between 1,522.99 and 1,526.83. Volume was 1.043 billion shares worth 1.026 billion ringgit. There were 441 decliners and 313 gainers, with 320 stocks finishing unchanged.

Among the actives, Ramunia, Karambunai, CIMB Holdings and Petronas Chemicals all finished lower, while Iris and Maybank ended higher.

DJIA Dips on Pre-Fed Caution, Lackluster Earnings, and Light Volume
Wall Street offers little guidance as stocks showed a lack of direction on Monday, as traders seemed reluctant to make any significant moves ahead of some key economist events later in the week. The lackluster performance also came as some traders remained away from their desks following the long weekend.The choppy trading seen on Wall Street came as traders looked ahead to the Federal Reserve's latest monetary policy announcement on Wednesday as well as some key economic data. While the Fed is not expected to announce any major policy changes, traders have expressed some uncertainty about what Fed Chairman Ben Bernanke will say in his first accompanying news conference.

After touching a multi-year high of 12,506.22 right out of the gate, the Dow Jones Industrial Average (DJIA – 12,479.88) ended with a loss of 26.1 points, or 0.2%, snapping its three-session run higher. Intel Corp. (INTC) paced the 12 advancing equities with a gain of 2.2%, while DuPont (DD) led the bearish majority with a loss of 1.4%.
The S&P 500 Index (SPX – 1,335.25) pared its losses in afternoon trading, surrendering 2.1 points, or 0.2%, by the close. Nevertheless, the broad-market barometer maintained its perch atop the closely watched 1,333 level, which marks double its March 2009 low. Finally, the Nasdaq Composite (COMP – 2,825.88) fared the best of the three, tacking on 5.7 points, or 0.2%, by the time the dust settled.

Traders are also waiting on the release of the Commerce Department's first estimate on first quarter GDP growth on Thursday. The report is expected to show that GDP growth slowed to 2.0 percent in the first quarter from 3.1 percent in the fourth quarter.

Meanwhile, the markets did not show much reaction to a report from the Commerce Department showing that new home sales rebounded in the month of March. The report said new home sales rose 11.1 percent to an annual rate of 300,000 in March from the revised February rate of 270,000. Economists had expected new home sales to rise to 280,000 from the 250,000 originally reported for the previous month.


FKLI Keeps Traders On the Edge; Indicators confirm nothing, just yet.

Neither bulls nor bears can claim superiority
The selling pressure that is more than a week now is not over, though price is still within a longer term uptrend and possibly made a bottom last week. Again, the bias is likely up and an intermediate low of 1510 was made last week as:
1) Sign of strength as April high of 1562 retraced more than 62% of Jan-Mar decline;
2) Probably bottom last week should the 28 day cycle returns, with Mar 15 as the prior low. Up-cycle returning as price spent 17 days up, more than half of cycle;
3) False breakout below 1510 last Monday;
4) Global equity rebound last week, with both Jakarta and Korea recording all time highs; and
5) Continued strength in Ringgit (@13 years high versus USD)

If that is so, the first sign of strength is price closing above important level of 1524, which has to be followed by close above 1535, then closing January gap of 1564 and closing above 1580. Also, a rising US treasury yield would add further confirmation.

Nonetheless, the negative is not all erased. Daily RSI divergence suggests upward momentum is weak and not to mention the persistent futures discount to cash in the past month, pointing to downcast sentiment. If that is so price has to trade below 1520 and the closing below 1510. First target will be 1485. But again, downtrend is only confirmed on sustained close below 1470.

> Weak candles after touching the moving average. But need to close below last week's low to confirm weakness.

> Trend is weak, price is below21 day moving average but average lopes up.

> Price is still within 5 month trading range of 1470 - 1580. The level around 1525 is also important.

> RSI is falling with price. Looking for bottom?

> Stochastic in buying mode. Bottom made last week?

> If 28 day cycle still on-going, a prior bottom was 15 Mar, and the lastest last week? Positive cycle patter? New cycle just started?

> Intermediate support at Nov low of 1470

> Doji after long black candle, market undecided. Trend may reverse or continue. Price likely trend on direction of break of weekly range.

> Price is again below the moving average. The average stays flat, suggesting sideway market.

> Important bottom is still May 10 low of around 1280. RSI is now lower than Feb10, and given the rebound, Feb/Mar 11 1470 is now an important low.

> Resistance is now all time high of 1580.

> Longer term support likely be 1470, around 1445 and 1350. 1240
should be an intermediate support.
Based on the analysis in the 2 given charts. The following trade may be initiated >>>

Long Recommendation >>> Entry: Above 1524.
Stop: Below 1520.

Short Recommendation >>> Entry: Break of 1520 or near 1535.
Stop: Above 1524 or above 1530. A good short has to close below 1510.

Moving AverageTrade Recommendation (Position Traders)
Stay short>>> Trailing Stop: 21 day moving average level of 1534.


Monday, April 25, 2011

ZLBT Weekly Outlook >>> The FKLI

FKLI May Expire Higher This Week
THE FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) futures April contract on Bursa Malaysia Derivatives closed lower at 1,522.5 with an open interest of 19,667 contracts last week.

The forecast consolidation took place last week with the April contract testing the upper resistance line when it reached a high of 1,539. However, when the market closed last Friday, consolidation pressure re-emerged as the spot contract failed to end above the resistance line again.

Most of the daily technical indicators remain in the neutral region. The daily Relative Strength Index and the Commodity Channel Index indicators are in this territory after reflecting last week's pullback.

Over the shorter term, the consolidative trend remains with an upside bias despite the mild correction in the market. The primary trend is still broadly positive and the current development may continue given the defensiveness when price drop closer to the support at the 1,500 line.

Although there was countering pressure when the spot contract reaced the 1,540 resistance line, the spot contract's price momentum may re-test this level this week as it attempts a rebound from the weekly mid-Bollinger band. With the weekly indicators remaining in neutral territory there could be a revival of bullish trades in the middle-term perspective.

Tactically, the spot contract may continue with its consolidative trading with upside bias this week. Notwithstanding the volatility on the daily chart, the smoothened weekly chart looks more promising. With support intact at the 1,494 level the immediate resistance is located at 1,540.
Technical reports
The Moving Average Convergence Divergence indicator remains positive with the faster above the signal line. Both lines remain at the positive region.

The daily Relative Strength Index closed at the neutral.

The daily Commodity Channel Index finished at the neutral.


The Malaysian Bunny Hopped Souther Not Easter

Wither or Fly; Rebound or Die
The FBM KLCI finished slightly lower on Friday, nudged into the red by selling pressure from the industrials and plantation stocks. KL equity market has finished lower now in back-to-back sessions, retreating nearly 10 points or 0.6 percent in the process. The FTSE Kuala Lumpur Composite Index finished just above the 1,520-point plateau, although now investors are bracing for further if mild consolidation at the opening of trade on Monday. Last Friday, the index shed 3.58 points or 0.23 percent to finish at 1,522.75.

There is little in the way of a global forecast, as the European and U.S. markets were off on Friday. The lead for the Asian markets is cloudy with a slight downside bias, pitting continued optimism over strong earnings against some overdue profit taking on oversold bourses. Technology stocks are in line for consolidation, while the financials may pick up on bargain hunting as the Asian markets move sideways with a hint of negativity.

There is no lead from Wall Street, although the markets may be affected by news that Japan's cabinet on Friday announced 4 trillion yen extra budget for the reconstruction of the country's quake-hit regions. The budget is seen as the first in a series of funding packages to be announced to rebuild the economy, rattled by its strongest earthquake on record.

In economic news, Malaysia's international reserves rose during the period from end-March to April 15, central bank data showed on Friday. Gross international reserves of Bank Negara Malaysia were $122.205 billion on April 15, up from $113.838 billion on March 31. Foreign currency reserves grew to $110.8 billion from $102.3 billion. The IMF reserve position was unchanged at $0.7 billion and SDRs held steady at $2 billion. Gold reserves were also unchanged at $1.7 billion. Other reserve assets totaled $7 billion, down from $7.1 billion.

If an overdue rebound is not on then we'd be looking at 1500 or lower soon. However, ZLBT remains in LONG mindset.
Itu biasalah :D


Saturday, April 23, 2011

ZLBT Weekly Markets Round-up : DJIA, FBMKLCI + FKLI

FBMKLCI & FKLI Below Par Performance
Versus DJIA or Regional Markets

 Through the years, FBM KLCI had always risen and fallen in tandem with DJIA. Wall Street is enjoying newfound enthusiam even with so many variations and prognosis of how sustainable is the market for an ailing economy far less enthusiastic than many analysts would cordially agree to disagree.
As far as Bursa Malaysia is concern, our economy is "boleh tahan" >>> nothing much to shout about but still, surviveable?
Isn't the FBMKLCI suppose to be, if not on par then should NOT be in a reversal  mode since DJIA have already broken it's 33-month high?
BN already secured the Sarawak victory they so wishes.
Ada apa TENSION lagi?
Or am I missing something?
 The index futures (FKLI) is "on par" or rather a fraction of a point in discount to the underlying cash marketbut the technical signals are far from convincing something big may happen. If there is a big move around the corner, in all high probability it's gonna be in the shape and size of a grizzly.
Bottom line is >>> ZL still optimistic Malaysian "kerbau" still have more moos than boos
And if our market needs to deliver than it better be sooner rather than later. The DJIA Weekly Elliot Wave 5 is nearing completion .....
All the best to everyone