Bets on inflation to be high in United States

Traders are betting that inflation will heighten due to FED's move to avoid deflation. United States government bonds had been sold at an effectively negative rate of return for the First Time.


*Commodities is preferred if the condition persist.

Stocks to look at (Home Depot, NYSE : HD)

The Home Depot, Inc, a home improvement retailer. Home Depot sells an assortment of building materials, home improvement and lawn and garden products and provide a number of services. As of January 31, 2010, it had 2,244 The Home Depot stores located throughout the United States, including the Commonwealth of Puerto Rico and the territories of the United States Virgin Islands and Guam (U.S.), Canada, China and Mexico.

The stock is recently form a support and currently challenging the 32.00 resistant level. A significant breakout above the 32.00 level would call for a buy on the stock. Support at 26.50 and resistant at 32.00.

FCPO made new high of the year

The above is the 15 minutes chart of active FCPO. A break and solid close above the previous high (2970) has brought signal that the FCPO still remain bullish. Speculation has been strong that prices will hit higher so do expectation of some researchers claiming that CPO supply will increase significantly next month which contradicts each other. We are not as concerned as those of the longer term players like hedgers of the upstream or even downstream users of CPO. Having long term view is not really our concern though. As for now, preferred position is to be hold long. Immediate resistant will be the key 3000 psychological resistance. Immediate support stood at 2940 for now.

The basics of Technical Analysis

FCPO dramatically closes up 170 points (approx 6%)

FCPO Active Month Daily Chart

The FCPO implies a breakout above 2800 where it gaps up on the last trading day with an approximate 140 points (5%) to open at 2903/mt. FCPO prices is expected to journey higher although Ringgit would be expected to remain strong. Any means of a weakening of RM would possibly trigger another hike in palm oil prices due to increase price competitiveness in the global market.

Index made new High after recent consolidation

FBM KLCI daily Chart

The above KLCI chart clearly shows that the FBM KLCI successfully closed above 1481 making a new year high after a recent week of consolidation. This is a strong sign that the market could be heading higher. Current immediate resistant would be at 1496 and 1500 correspondingly. Immediate support lies at 1450 and 1442.

Benchmark index being dragged by Digi(6947) causing lost of approx 7 points in the index.

The index futures and benchmark index has been on the positive territory throughout most of the day. However, a late sell down on Digi(6947) which is belief to be a mistake causes the respective stock to fall as much as 3.50 which contributes to a 14% lost in market cap. The fall in Digi also brought to a drop on the index of about 7 points in the index. However, overall build up on the futures suggest a pullback on a support. Overall market is still considered strong while breakdown at 1460 and below would potentially lead to more selling interest.

Immediate support is at 1460 and immediate resistant remain at 1480.