FKLI Daily Previews 18 Jan 2012

Preview
Expect futures to trade range bound today as US stocks on the whole recorded slight gains. The Street was buoyed on by better than expected GDP figures released from China despite growth slowing on a year-on year basis. 

However, no follow through buying was witnessed, as banking behemoth Citigroup contributed to limiting the gains as it lost 8 percent after reporting disappointing earnings. 

On the home front, FBMKLCI finished the day at 1519.36, up 0.68 percent. The index traded in a subdued fashion for the first half of the day as investors stayed cautious. Nevertheless, during the afternoon session, the index proceeded to trade higher following regional markets after a slew of encouraging economic data out of China lifted world markets. Market sentiment remained positive as futures trades at a 2.5 points premium to the underlying cash.

Overnight Leads
U.S. stocks advanced on Tuesday, pushing the S&P 500 to its highest since early August, but sharply pared gains late in the session as Citigroup's steep drop in profit gave investors a reason to unload bank shares.

Technicals
Futures settled at 1522.0, up 0.79 percent. Four consecutive days of black candles was snapped by the formation of a long white candle. The bulls controlled the market booking most of their gains in the afternoon session. Investors continued to stay sidelined evident by the light trading. MACD remains on a bearish divergence path and futures 3-week trading range still intact. As such, support and resistance levels pegged at 1510 and 1532 respectively.

Strategy

Aggressive trade may long with stop on below 1510.

HAPPY TRADING 

FKLI sentiment positive, prices to challenge resistance 11 Jan 2012

Preview
Expect futures to trade higher today as US stocks reached a 5-month high as investors took as bullish stance towards material stocks. Sentiment improved for those watching the debt crisis in Europe after influential ratings agency Fitch dismissed cutting France’s rating this year. However, key auctions of Italian and Spanish bonds later this week will give a much clearer indication of the state of Europe’s finances. 

Back home, FBMKLCI settled marginally higher at 1521.99, up 0.26 percent. The index traded within a tight range of circa 5 points in an uninspiring trading session. A lack of any significant leads and global economic uncertainties resulted in light trading as investors stayed sidelined. Market sentiment remained in positive territory as futures extended its premium over the underlying cash market to 5 points.


Overnight Leads
U.S. stocks climbed to a five-month high on Tuesday, led by materials stocks after an upbeat forecast by aluminum company Alcoa and strong gains in bank shares.



Technicals
Futures settled at 1527, up 0.16 percent after recording its 4th consecutive white candle to continue its bullish trend. The day’s trading was uneventful as futures traded within a tight range. MACD continues to diverge against its 9-day moving average. Look for futures to test the 1532 level, a sustained break above this level will lead futures to advance towards 1550 and fill the gapdown made in the first week of August last year. As such, support and resistance levels pegged at 1527 and 1550 respectively.

Strategy
Aggressive trade may long with stop on below 1527.

HAPPY TRADING