ZLBT Chats

Friday, August 16, 2013

FKLI Daily Preview 16082013

Expect futures to take a bearish turn today after US markets posted two consecutive days of steep decline. However, do expect the local market to be reasonable supported by Moody’s report which dictated Malaysia’s outlook to be stable. The vicissitude in US shares relates to disappointing results and outlooks from Wal-Mart and Cisco.

Additionally, reports showing that jobless claims fell to a six-year low and rising consumer prices generated further speculation that the Federal Reserve will soon trim its effort in supporting the economy. The Fed’s next policy meeting will be held on 17-18 September, whereby its outcome will be heavily anticipated for any changes in its quantitative easing programme.

Back in the local front, FBM KLCI descended marginally by 0.08 percent, closing at 1792.21. Gains were witnessed during the early trading session despite a steep fall in the US overnight market.

However, selling picked up towards the closing bell which reversed earlier gains. The energy and

banking industries were major losers for the day, Petronas Dagangan, Petronas Gas, Ambank, Maybank, and Hong Leong Bank to name a few.

Futures trade at a further premium of 6 points away from its underlying cash market.

Futures closed at a gain of 0.11 percent and settled at 1798. Trading activities wobbled between positive and negative territory as buyers remained hesitant of upward potential. Chart wise, a white candle was formed, whereby prices managed to close higher than overnight levels amid uncertainties. MACD indicator also journeys towards a buy signal.

However, expect prices to open gap down as the market takes cue of the fall from the US overnight market. Buyers may step in to take advantage of low prices during early trades. Nevertheless, downside risk remains eminent and selling activities will intensify upon breaching immediate
support at 1793. As such, support and resistance can be eyed at 1780 and 1810 respectively.

Trade may short with a stop on or above 1810.

Thursday, August 1, 2013

FCPO Preview Outlook 01 Aug 2013


The FCPO active month contract ended slightly higher due to good export reports released on Wednesday. ITS and SGS released the figures showed that Malaysia palm oil export up 4% and 5% respectively.  

Futures settled at 2236, up 21 points. Prices were caught in a tight range and hovered between losses and gains but remained steady above 2200 level. The formation of a small bodied white candle with longer upper shadow indicates buyers outweighed sellers for most part of the day and managed to lift prices from its day low. Higher high and higher low formed could add to confirmation of a bullish reversal despite a mild profit taking after the strong rebound yesterday. This could imply improved sentiment and MACD is seen approaching a bullish divergence where a cross above would provide more signs of price recovery. As such support and resistance can be pegged at 2200 and 2275 respectively.

Trade may long with a stop on or below 2200.

FKLI Preview Outlook 01 Aug 2013

FBM KLCI Futures Technicals
The FKLI spot month contract ended sharply lower on heavy selling pressure after Fitch, a global rating agency downgraded Malaysia’s sovereign credit rating. At the close, the FKLI Spot wiltered down 23 points to 1,774.5.

August futures prices cascaded 1.83 percent to close at 1766. Trading activities formed a long black candle, whereby selling activities intensified throughout the day. Prices were fragile as it violated major support levels to close below its 20 and 50 day moving averages.
Heavy sell-off triggered after the price broke below the two important support levels. As we can see in the chart, the trend is turning weak after it broke below the support line as drawn in the chart and this is also confirmed by the MACD indicator.
Moreover, MACD extended its selling signal for a third consecutive day, hinting more bearish potential. Thus, support and resistance for the day can be eyed at 1750 and 1775 respectively.
Intraday technical support & resistance for 1/8/2013
1st support 1,765; 2nd support 1,753-50
1st resistance 1,775-80, 2nd resistance 1,800

Trade may short with a stop on or above 1775.