Bears Seem Very Relax! – FKLI 100608

FKLI Market Outlook:

A lot of investors started to believe that our market seem to re-enjoy the decoupling that we used to enjoy about a month ago as yesterday market rebounded from its day low of 1272, same went to cash as the FBMKLCI closed 8 points higher from its day low.

However, in our view, our market will only have mild support and will not have what we have before – decoupling from the world financial market. The mild support comes from the expectation of the announcement on the 10th Malaysia Plan two days after. To us, this is a very small piece of fundamental news and will not have much impact towards our market in this current strong world influences environment. We will strongly advise investors not to hold long position overnight, provided it reaches certain important and strong support.

We are firmly bias towards the downside in accordance with the technical and fundamental reasons stated in our weekly report yesterday. Overnight further dropped in the DJIA was pushing the index further below the MA 200 level, indicating the CONFIRMED bears market ahead.

We are not expecting the world bourses to recover within this week ahead of the start of the World Cup. Market will remain towards downside with thin trading volume. For today, the support is seen at 1270 – 1265 levels. Slightly stronger support only is seen at 1252 level. Investors need to be more cautious (especially those holding the long position) if the FKLI is not able to support above the MA 200 level – 1271. This round of break below this level will confirm the MA 200 being convincingly breakthrough and further major correction is expected.

US MARKET
Overnight US market closed another triple digit losses, resumed its downside momentum. From technical points of view, yesterday dropped is sending the DJIA further below the MA 200, more unlikely to regain its posture above the MA 200, strongly indicating the confirm bearish market for mid to long term. (Please refer to the page 2 on the attached report for the chart).


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The information herein was obtained or derived from the source that we believed are reliable.No liability can be accepted for any loss that may arise from the use of this report.All opinions and estimates included in this report constitutes our judgement as of this date and are subject to change without notice.

FKLI Bull is back? Or Bear Trap?

FKLI June futures contracts closed strong at closed yesterday in line with the higher cash and regional market. Spot month June gain 20.5 while July +19.5 points. Premium widen to 6 pts from 3 pts previous day. 

On the cash market, KLCI jumped 18.42, 1.44% across-the-board gains. The uptrend was largely due to the overnight gain in the US market, which received a boost from better housing and car sales. In addition, the strong regional market (STI +2.42%, N225 +3.25% and Kospi +1.93%) provides the much needed optimism. 

Among the top gainer sector is plantation +74.72, 1.41% and finance +152.91, and 1.41%.  Nevertheless, the volume traded not so convincing before any trend could be confirmed at this juncture.
 
Technically, the fkli managed to penetrate the psychological 1300 resistance level. Closing above the psychological 1300 level resistance, and with both FKLI and KLCI closed above the 200SMA could be one signal that the recent minor correction is over.  In another positive sign, the fkli MACD turned positive after turning bearish in mid-May. If the cash mange and stay above the 1300 player possibly will start feeling confident that the cash has bottomed out.  Fkli are set a cautious open today after US market offer little direction and fkli may open lower as basis will narrow unless the cash climb above the 1300 level. The next resistance level for cash will be psychological resistance and 1305 for fkli. Immediate support revise higher to 1290-1285 while resistance at 1310.
 US Market

U.S. stocks rose last night, led by a late-day surge in technology shares as investors geared up for a strong unemployment report today. Volume was light ahead of Friday's non-farm payrolls report, which is expected to show the economy added 513,000 jobs in May. The Dow Jones up 5.74 points, or 0.06%, to end at 10,255.28. The Nasdaq rose 21.96 points, or 0.96%, to 2,303.03  
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The information herein was obtained or derived from the source that we believed are reliable.No liability can be accepted for any loss that may arise from the use of this report.All opinions and estimates included in this report constitutes our judgement as of this date and are subject to change without notice.

FKLI Change From Bear to Bull or Just A Technical Rebound?

KLCI down 0.54% or 6.95pts to closed at 1276.02 with thin volume (585 million). On the fkli June closed at 1278 or up 6.5 pts. 0.51%. The basis fluctuates wildly; it's been trading at 10 points discount the previous day and closed at 3 points premium yesterday. Total volume transacted stood at 8913 from 9996 on Tuesday. Players on sidelines due to lack of fresh leads and we expect the fkli to be choppy today with basis fluctuate between premium and discount similar to last few day movement.
 
KLCI and FKLI display great effort determination by maintaining above the 200SMA line, 1270 for KLCI and 1268 for FKLI.  We continue to expect the fkli to be trapped in range today with positive bias. For now the fkli needs to overcome the huddle of resistances at 1288-1300 for the bulls to regain control. However. anticipated selling interest to emerge at higher level as  sharp premium seems attractive.  Market likely to confine in the 1275-1290 ranges for today.  For the record, the fkli stuck in the 1270-1285 ranges since beginning of this week. Support is seen at 1275, while resistance at 1293-1300.

 US Market
 U.S. stocks rallied last night as investors rushed back into beaten down stocks, led by energy, which bore the brunt of the sell off a day earlier. The Dow was up 225.52 points, or 2.25%, at 10,249.54. The Nasdaq was up 58.74 points, or 2.64%, at 2,281.07. Dow was also encourage by U.S data showing pending sales of previously owned homes increased to 6 months high in April.
  
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The information herein was obtained or derived from the source that we believed are reliable.No liability can be accepted for any loss that may arise from the use of this report.All opinions and estimates included in this report constitutes our judgement as of this date and are subject to change without notice.

FKLI Outlook by AmFuture - 02 Jun 2010

KLCI closed down 0.16% or -2.04 pts to settle 1282.97 in line with weaker regional market. Regional market fell (HSI index  –1.36%, STI –1.35% and Nikkei –0.58%) as lower Chinese manufacturing growth and the prospect of higher interest rates in India spurred concern that the global economic recovery may slow. Losses from properties (-1.48%) and technologies (-2.01%) sector contribute the major losses. On fkli, new month June plunge 15.5 pts or 1.2% to closed at 1274.5, 10 points discount from 3 points premium the day before.

Expect the fkli to be choppy today and increased in volatility with basis fluctuate between premium and discount. For the record, the 10 pts discount most widen in 13 months. Players should maintain a sell-into-strength strategy. With regional market still susceptible to negative news many players still have doubts about the strength of the global recovery.  We anticipated listless performance in fkli and likely to continue for the rest of this weeks.  Based on yesterday performance and Dow overnight, we believe many players have more doubts about the strength of the global recovery for now. We lower our support to 1260 while resistance lower to 1292.
 US Market

U.S. stocks fell last night as energy shares slid after the latest failed attempt to halt the oil spill in the Gulf of Mexico clouded future prospects for energy company profits. U.S. government said it would start a criminal probe into the oil spill in the Gulf of Mexico, where another bid to stem the leak failed. The Dow dropped 112.61 points, or 1.11%, to 10,024.02. The S & P 500 Index dropped 18.70 points, or 1.72%, to 1,070.71. The Nasdaq dropped 34.71 points, or 1.54%, to 2,222.33.

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The information herein was obtained or derived from the source that we believed are reliable.No liability can be accepted for any loss that may arise from the use of this report.All opinions and estimates included in this report constitutes our judgement as of this date and are subject to change without notice.

FKLI Outlook by AmFuture - 01 Jun 2010

KLCI closed 15.85 or 1.25% points to settle at 1,285.01 after opening 7.27 points firmer. The gained largely by Finance (+133.16, +1.17% and Plantation (+88.96, 1.49%). On the fkli, the May expired at 1284, while June settle at 1288, 3 points premium against cash. Total volume transacted total 19955 contracts as month end roll over contribute roughly 62% of the volume.

Despite yesterday and last Thursday gains we advise clients more cautious at current juncture.  The current jittery in the market likely to continue for a while and is susceptible to negative news. Moreover, we think the basis largely result from short cover in the fkli the past 2 days. Cash gains 37 pts in the last two trading days. We anticipated some selling interest to emerge at the higher level and premium seems attractive. We continue to expect the fkli to be choppy today and increased in volatility. 

Players should maintain a sell-into-strength strategy. We not convince on the uptrend unless the new spot month June fkli manage to stay above the 14SMA at 1,303 points level. We maintain our immediate resistance level at 1292-1303 while support at 1270-1260