PP 7767/09/2010(025354)

RHB Research
Malaysia Technical Research Institute Sdn Bhd
A member of the
RHB Banking Group
Company No: 233327 -M

Da ily T rad ing S trat egy

16 March 2010
MARKET DATELINE

Market Technical Reading

Must Stabilise Around 1,300 To Attract Bargain Hunters...

Chart 1: KLCI Daily Chart 2: KLCI Intraday

Local Market Leads:

♦ Dogged by further profit-taking pressures in the big caps as well as the poor regional sentiment, the FBM KLCI
experienced another strong selling day on Monday.

♦ Plantation heavyweights, like IOICorp (-13sen) and Sime (-13sen), and key banking stocks, CIMB (-16sen) and
PBBank (-16sen) ranked among the top draggers.

♦ This resulted in another 11.53 pts or 0.88% decline to 1,299.67 in the FBM KLCI, even as the key Asian markets
such as Hang Seng (-0.62%) managed to engineer a late recovery.

♦ Regionally, sentiment was dampened by speculation over potential monetary tightening moves in China and news
that Moody’s Investor Service warned that the UK could lose its top credit rating. Shanghai Composite and
Taiwan Weighted led the downside by sliding 1.21% and 1.46% respectively.

♦ Compared to last Friday’s 716m shares, turnover increased to 765m shares yesterday. Bears are still in control
with losers overwhelming gainers by a ratio of more than 2 to 1.

Technical Interpretations:

♦ As sellers expanded their selling activities, the FBM KLCI extended its selling momentum by ending at slightly
below the crucial 1,300 psychological level yesterday, after covering the previous lower technical gap at the
1,300.74 - 1,312.18 region.

♦ Losing the 10-day SMA of 1,306 with a third bearish candle points to a potential negative turn in the FBM KLCI’s
short-term outlook.

♦ Therefore, it must at least stabilise at around 1,300 today in order to fend off further selling pressre as well as to
protect the recent uptrend.

♦ Otherwise, a further pullback towards a lower technical gap near 1,287.78 as well as the 40-day SMA of 1,281
could be on the cards.
Please read important disclosures at the end of this report.

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 16 March 2010

Daily Trading Strategy:

♦ In the absence of strong bargain-hunting supports, the FBM KLCI dropped further to end at barely below the
important psychological support level of 1,300 yesterday.

♦ Judging from the current technical readings, the current consolidation could be prolonged with a possible
downside risk towards a lower technical gap near 1,287.78 and the 40-day SMA near 1,281.

♦ Nevertheless, we are not changing our positive view on the recent bullish breakout rally, unless the local
benchmark gives up the 1,300 level decisively.

♦ In fact, if the market can stabilise at around the 1,300 support region, this could encourage some mild bargain-
hunting activities.

♦ In the meantime, most investors are likely to stay sideline, pending the outcome of the US FOMC meeting on
Tuesday.

Table 2 : Major Indices & Commodities

Table 1 : Daily Statistics Change Change
Scoreboard 9 Mar 10 Mar 11 Mar 12 Mar 15 Mar Local Key Indices Closing
(Pts) (%)
Gainers 253 451 274 247 211 FBM KLCI 1,299.67 -11.53 -0.9
Losers 455 292 440 436 461 FBM 100 8,498.72 -78.60 -0.9
Unchanged 258 270 276 272 240 FBM ACE 4,205.59 -32.74 -0.8
Untraded 375 330 354 389 432 Major Overseas
Indices
Market Cap Dow Jones 10,642.15 17.46 0.2
Turnover Nasdaq 2,362.21 -5.45 -0.2
(mln shares) 798 934 792 716 765 S&P 500 1,150.51 0.52 0.0
Value (RM FTSE 5,593.85 -31.80 -0.6
mln) 1,453 1,619 1,347 1,336 1,098 Hang Seng 21,079.10 -130.64 -0.6
Jakarta Composite 2,669.61 3.10 0.1
Currency Nikkei 225 10,751.98 0.72 0.0
MYR vs US Seoul Composite 1,649.50 -13.24 -0.8
Dollar 3.3410 3.3180 3.3170 3.3055 3.3165 Shanghai Composite 2,976.94 -36.47 -1.2
SET 733.34 0.00 0.0
Source: RHBInvest & Bloomberg FT Straits Times 2,874.33 -7.03 -0.2
Taiwan Weighted 7,634.92 -113.41 -1.5
India Sensex 17,164.99 -1.63 0.0
Major Commodities
NYMEX Crude Oil
(US$/barrel) 79.80 -1.44 -1.8
MDEX CPO – Third
Month (RM/metric ton) 2,590.00 -59.00 -2.2
US Interest Rate Current Last Updated
Overnight Fed Fund 26-27 Jan
0-0.25% Unch
Rate 2010
Next FOMC meeting 16 Mar 2010

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 16 March 2010

Chart 3: FKLI Daily Chart 4: FKLI Intraday

Technical Interpretations:

♦ The KL futures market bowed to heavy selling pressure for a third day on Monday in reaction to the poor trading
sentiment in both local and overseas markets.

♦ With bears dominating the market, sellers pushed the FKLI down to below the supportive 10-day SMA of 1,308
yesterday.

♦ At the close, the FKLI for Mar contract shed another 13.00 pts or 0.99% to 1,303.00, closing near the resistance-
turn-support level of 1,300.

♦ Chart wise, by forming a “Three black crows” candle pattern amid the weakened short-term momentum readings,
we see further downside risk on the FKLI in the immediate term.

♦ This in turn, will put the 1,300 key level into a crucial test today.

♦ But until 1,300 is breached, we do not discount a possibility of the return of bargain-hunting supports nearer
1,300.

♦ The next downside supports are detected near a technical gap at 1,288 and the 40-day SMA near 1,280.

Daily Trading Strategy:

♦ Further downside risk can be expected today, but 1,300 could hold amid expectation of possible emergence of
bargain-hunting activities.

♦ In other words, stop loss order will be triggered only if it loses 1,300.

♦ For today, the trading band for the FKLI is likely to be around 1,293 to 1,307.

Table 3: FKLI Closings

FKLI (Month)
Contracts Open High Low Close Chg (Pts) Settle Volume Open Interest
Mar 10 1315.50 1315.50 1301.50 1303.00 -13.00 1303.00 5085 19174
Apr 10 1314.50 1315.00 1301.50 1302.00 -13.00 1302.00 356 751
Jun 10 1309.50 1309.50 1301.00 1302.50 -12.50 1302.50 149 561
Sep 10 1308.00 1308.00 1300.00 1300.00 -13.00 1301.50 42 160

Source: Bursa Malaysia

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 16 March 2010

Chart 5: US Dow Jones Industrial Average (DJIA) Daily Chart 6: US Nasdaq Composite Daily

US Market Leads:

♦ Thanks to a late rebound in financial stocks and a broker’s upgrade on Wal-Mart, the US markets trimmed down
its earlier losses by closing nearly flat on Monday.

♦ US stocks spent most of the day in the negative zone amid fears of an interest rate hike in China. However,
banking stocks led a late recovery after the US Senate Banking Committee Chairman Christopher Dodd
announced a proposal over financial regulation overhaul bill which contains no negative surprises for the financial
sector.

♦ Wal-Mart, a top gainer in the Dow, went up 2.8% after Citigroup upgraded the stock to “buy”.

♦ Still, most investors preferred to stay sideline ahead of the US FOMC meeting on Tuesday. The Fed is widely
expected to maintain its current ultra-low interest rate policy.

♦ On the NYMEX, the US light sweet crude oil for Apr delivery broke below the US$80 psychological level with a loss
of US$1.44 or 1.8% to US$79.80/barrel.

Technical Interpretations:

Dow Jones Industrial Average (DJIA)

♦ Despite the earlier setback, the US DJIA staged a recovery by gaining 17.46 pts or 0.16% to 10,642.15 with a
small positive candle yesterday.

♦ Technically, it could attempt to extend its gains on follow-through buying momentum.

♦ But a quick removal of the recent high of 10,644.95 is needed to lead it to rechallenge the Jan high of 10,729.89,
as well as the 10,850 hurdle.

♦ Meanwhile, the 21-day SMA near 10,426 will continue to offer firm support to the index.

Nasdaq Composite (Nasdaq)

♦ On the other hand, the Nasdaq Composite Index eased another 5.45 pts or 0.23% to end at 2,362.21 yesterday.

♦ Chart wise, it recorded a “doji” candle to point to uncertainties ahead.

♦ But due to weaker momentum in the short-term indicators, the risk of further profit-taking activities towards the
resistance-turn-support of 2,330 is rising.

♦ Nevertheless, its immediate downside risk will be capped at 2,330.

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Daily Technical Watch:
Chart 7: Genting Daily Chart 8: Genting Intraday

Genting (3182)

A rebound is possible, if it can sustain above the 10-day SMA…

♦ Following a successful breakout from the RM7.45 resistance level in Oct 2009, Genting’s share price advanced
further to a nearly 2-year high of RM7.87 in late-Oct.

♦ But with a “shooting star” candle on the chart, it retraced and slipped into a consolidation at between RM6.80 –
RM7.45 region.

♦ After enjoying a brief rebound to RM7.72 high in early Jan, the stock turned lower and hit a low of RM6.20 in
early Mar on renewed selling momentum.

♦ But from the low, it kicked off a strong comeback by bouncing up to RM6.91 high recently, before meeting stiff
profit-taking pressure near the RM6.80 resistance barrier.

♦ After a mild retreat, it acquired a “doji” candle yesterday to signal uncertainties ahead.

♦ But if it can sustain above the 10-day SMA, a rebound towards the RM6.80 resistance level and the 40-day SMA
nearby on fresh bargain-hunting supports is possible.

♦ On the other hand, a further loss of the SMA could end the recent technical rebound, and restore a fresh selling
leg towards the recent low of RM6.20 as well as the RM6.00 stronghold.

Technical Readings:

♦ 10-day SMA: RM6.572

♦ 40-day SMA: RM6.825

♦ Support: IS = RM6.00 S1 = RM5.15 S2 = RM4.60

♦ Resistance: IR = RM6.80 R1 = RM7.45 R2 = RM8.15

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IMPORTANT DISCLOSURES

This report has been prepared by RHB Research Institute Sdn Bhd (RHBRI) and is for private circulation only to clients of RHBRI and RHB Investment Bank Berhad
(previously known as RHB Sakura Merchant Bankers Berhad). It is for distribution only under such circumstances as may be permitted by applicable law. The
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be contrary to opinions expressed by other business units within the RHB Group as a result of using different assumptions and criteria. This report is not to be
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The research analysts, economists or research associates principally responsible for the preparation of this research report have received compensation based
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Technical recommendation framework for stocks and sectors are as follows: -

Technical Recommendation:
Trading Buy = Short-term positive opportunity spotted. It is an aggressive trading recommendation with a book to sellers’ price for short-term technical upside.
Bargain Buy = Short-term positive but technical signals have yet to trigger a rally. Traders can park and queue for their desired entry level within a small range.
Buy on Weakness = Short- to Medium-term positiveness anticipated, but technical readings are still negative. Traders can pick-up the stock for future rally.
Sell on Strength = Short-term momentum still positive, Traders are advice to lock in profit base on current strength.
Take Profit = Short-term target achieved. Traders are advice to exit before the technical readings turn bearish.
Avoid = Risky situation in the short-term and high volatility expected on the share price. Traders’ best strategy is staying away until it stabilises.

Technical Time Frame:

Immediate-term = short time frame within a contra period.
Short-term = moderate time frame within two to three contra periods. For tracking purposes, we refer to 10 trading days.
Medium-term = medium time frame usually refers to two to three weeks period. For tracking purposes, we refer to 20 trading days.

Technical recommendations are generally short-term in nature and may differ from RHBRI’s equity fundamental view and recommendation on the same company.

RHBRI is a participant of the CMDF-Bursa Research Scheme and will receive compensation for the participation. Additional information on recommended
securities, subject to the duties of confidentiality, will be made available upon request.

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actions of third parties in this respect.

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