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

19 March 2010
MARKET DATELINE

Market Technical Reading

Must Stay Above 1,300 To Protect The Current Recovery...

Chart 1: KLCI Daily Chart 2: KLCI Intraday

Local Market Leads:

♦ Dragged down by the sluggish performance in the Asian bourses, the local market reversed its earlier gain and
closed flat on Thursday.

♦ Earlier, investors responded positively to Astro’s privatisation news and another overnight gain in US markets
amid rising appetite on riskier assets after the US Fed kept rates at a low level.

♦ Enthusiastic investors snapped up Malaysian tycoon Ananda Krishnan’s related stocks, such as Astro (+67sen)
and Tanjong (+28sen) following a proposal to take Astro private in a RM8.5bn deal.

♦ But just after hitting an intraday high of 1,307.24, profit-taking pressures reemerged alongside with the fresh
selling in Asian markets in the afternoon. It was reported that a senior Greek official said the country may seek
financial aid from the International Monetary Fund (IMF), rekindling fears of debt problems in the Eurozone.

♦ For the day, the FBM KLCI ended flat at 1,301.94, off its high of 1,307.24. Turnover slowed to 677m shares, with
364 losers leading 302 gainers.

Technical Interpretations:

♦ After opening at a high of 1,306.68 (+4.73 pts), the FBM KLCI worked its way down into the negative territory
throughout the day, before settling flat at the close.

♦ Registered with a negative candle, the index has refreshed a selling threat, though it still managed to hover at
above the 1,300 psychological support.

♦ Although it recorded a marginal “buy” signal on the stochastic oscillators, it could risk losing 1,300 today.

♦ We believe 1,300 is an important support to build a base for the FBM KLCI’s further recovery attempt. However, a
clear breakdown of this level will lead it lower to the recent low of 1,295.31 and a lower technical gap at 1,287.78.

♦ On the upside, it is expected to face immediate hurdle near the 10-day SMA of 1,311.

Please read important disclosures at the end of this report.

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 19 March 2010

Daily Trading Strategy:

♦ Clearly, the rotational selling pressure on the core blue chips, like AMMB (-11sen) has limited the FBM KLCI’s
ability to extend its technical rebound from the 1,300 support base, hence mitigating the positive impact from a
potential M&A deal due to the privatisation plan on Astro.

♦ In fact, the chart has formed another negative candle, indicating a higher risk of losing the 1,300 level on follow-
through selling pressure today.

♦ Technically, it must sustain at above 1,300 to protect the current recovery leg.

♦ A fall from this level will mean a dip back into the previous tough resistance zone of 1,250 – 1,300.

♦ It will also retest the recent low of 1,295.31, and a technical gap of 1,287.78.

♦ Therefore, investors should stay alert for any technical signal on the chart to determine the market’s near-term
direction.

♦ The FBM KLCI will only turn positive if it removes the 10-day SMA near 1,311.

Table 2 : Major Indices & Commodities

Table 1 : Daily Statistics Change Change
Scoreboard 12 Mar 15 Mar 16 Mar 17 Mar 18 Mar Local Key Indices Closing
(Pts) (%)
Gainers 247 211 290 405 302 FBM KLCI 1,301.94 -0.01 0.0
Losers 436 461 361 268 364 FBM 100 8,524.18 2.35 0.0
Unchanged 272 240 293 289 279 FBM ACE 4,179.55 -39.90 -0.9
Untraded 389 432 401 385 402 Major Overseas
Indices
Market Cap Dow Jones 10,779.17 45.50 0.4
Turnover Nasdaq 2,391.28 2.19 0.1
(mln shares) 716 765 679 742 677 S&P 500 1,165.83 -0.38 0.0
Value (RM FTSE 5,642.62 -2.01 0.0
mln) 1,336 1,098 1,060 1,218 1,218 Hang Seng 21,330.67 -53.82 -0.3
Jakarta Composite 2,737.24 -19.02 -0.7
Currency Nikkei 225 10,744.03 -102.95 -0.9
MYR vs US Seoul Composite 1,675.17 -7.69 -0.5
Dollar 3.3055 3.3165 3.3185 3.2980 3.3040 Shanghai Composite 3,046.09 -4.39 -0.1
SET 759.02 -6.52 -0.9
Source: RHBInvest & Bloomberg FT Straits Times 2,913.94 -5.36 -0.2
Taiwan Weighted 7,886.34 38.50 0.5
India Sensex 17,519.26 29.18 0.2
Major Commodities
NYMEX Crude Oil
(US$/barrel) 82.20 -0.73 -0.9
MDEX CPO – Third
Month (RM/metric ton) 2,535.00 -60.00 -2.3
US Interest Rate Current Last Updated
Overnight Fed Fund 16 Mar
0-0.25% Unch
Rate 2010
Next FOMC meeting 27-28 Apr 2010

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 19 March 2010

Chart 3: FKLI Daily Chart 4: FKLI Intraday

Technical Interpretations:

♦ The FKLI suffered a strong late selling session yesterday, as traders turned wary after overseas markets reversed
in the afternoon amid renewed fears over Greece’s debt problems.

♦ From an intraday high of 1,310.50, the FKLI turned lower before selling activities intensified in the late session.

♦ For the day, the March contract stumbled 10.00 pts or 0.77% to end at its day low of 1,297.00.

♦ On the chart, it registered a huge bearish candle and broke below the recent stronghold of 1,300, hence, violating
the recent recovery attempt.

♦ This indicates potential bearish technical fallout ahead.

♦ In our view, if it fails to engineer an immediate rebound to above 1,300 today, selling momentum could
accelerate going forward.

♦ The next downside target is seen near a lower technical gap at 1,288, followed by the 40-day SMA of 1,280 and
the key support level at 1,270.

♦ The immediate resistance is now revised lower to 1,300, followed by the tough 10-day SMA of 1,313.

Daily Trading Strategy:

♦ Yesterday’s unexpected breakdown from 1,300 repaints a bearish immediate outlook for the FKLI.

♦ It must immediately regain 1,300 today. Otherwise, traders should expect more downside ahead.

♦ We expect the futures index to fluctuate at around 1,288 to 1,303 today.

Table 3: FKLI Closings

FKLI (Month)
Contracts Open High Low Close Chg (Pts) Settle Volume Open Interest
Mar 10 1309.50 1310.50 1297.00 1297.00 -10.00 1297.00 4390 20288
Apr 10 1310.00 1310.00 1297.00 1297.00 -10.00 1297.00 313 1197
Jun 10 1310.00 1310.00 1299.00 1299.00 -9.00 1297.00 147 574
Sep 10 1307.00 1308.00 1299.00 1299.00 -9.50 1296.50 15 194

Source: Bursa Malaysia

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 19 March 2010

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

US Market Leads:

♦ Blue chips-laced DJIA rose for the eight day in a row on Thursday, led by gains in industrial stocks on the better-
than-expected manufacturing data.

♦ The Philadelphia Federal Reserve Bank said manufacturing activity in the Philadelphia region continued to improve
for a seventh consecutive month. This in turn, boosted industrial stocks, like 3M (+1.8%) and DuPont (+1.6%).

♦ Also, Boeing, the Dow’s top performing stock for the day, advanced 2.2% over a broker’s positive comment on its
787 plan.

♦ On the other hand, the US light sweet crude oil futures suffered a new setback on a rebound in the US dollar,
retreating US$0.73 or 0.9% to settle at US$82.20/barrel.

Technical Interpretations:

Dow Jones Industrial Average (DJIA)

♦ As the bulls charged forward, the US DJIA continued to expand further by gaining 45.50 pts or 0.42% to
10,779.17 on Thursday.

♦ By chalking up a fresh year high with a bullish candle, this shows the current uptrend still has a further upside
potential.

♦ As such, it is expected to rechallenge the next major resistance barrier at 10,850 soon on steady follow-through
buying support.

♦ Having said that, we still do not rule out a possibility of profit-taking soon, due to the overbought condition in the
short-term momentum indicators.

Nasdaq Composite (Nasdaq)

♦ Despite the previous “shooting star-like” candle, the Nasdaq Composite Index managed to reverse the early
decline by adding 2.19 pts or 0.09% to 2,391.28.

♦ It formed a small positive candle to suggest a potential resumption of its upward momentum.

♦ But first, a quick removal of the recent high of 2,400.09 is needed to regenerate a rally towards 2,470.

♦ Immediate support is seen at a lower technical gap of 2,378.84, followed by the resistance-turn-support at 2,330.

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

Magna Prima (7617)

Likelihood of a resumption of the uptrend…

♦ The share price of Magna kicked off a technical uptrend in late Sep 2009, when the 10-day SMA cut above the
40-day SMA to trigger a medium-term technical bullish sign on the chart.

♦ The stock confirmed its breakout of the RM0.74 tough level in Jan 2010, and surpassed another hurdle at RM0.87
on follow-through buying momentum.

♦ However, after testing a high of RM1.03, the stock reversed its upswing and went for a technical correction.

♦ At a support level of RM0.87, the stock managed to trend sideways and formed a support base nearer to the
uptrend line.

♦ It closed yesterday with a positive candle, rebounding from the uptrend line and indicated a likelihood of a
resumption of the upswing.

♦ Coupled with the uptick of the momentum indicators, and the surge in trading volume of late, the stock is due to
rechallenge the RM1.03 tough resistance level soon.

♦ Removing the tough hurdle of RM1.03 will boost its upside potential and lead it to RM1.15, followed by RM1.39.

♦ Supports can be found at the 10-day and 40-day SMAs near RM0.95 and RM0.93, while a stronghold is seen near
RM0.87.

Technical Readings:

♦ 10-day SMA: RM0.946

♦ 40-day SMA: RM0.9284

♦ Support: IS = RM0.87 S1 = RM0.74

♦ Resistance: IR = RM1.03 R1 = RM1.15 R2 = RM1.39

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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
opinions and information contained herein are based on generally available data believed to be reliable and are subject to change without notice, and may differ or
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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may from time to time have an interest in the securities mentioned by this report.

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This report has been prepared by the research personnel of RHBRI. Facts and views presented in this report have not been reviewed by, and may not reflect
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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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