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

12 April 2010
MARKET DATELINE

Market Technical Reading

Further Rebound Likely Today...

Chart 1: KLCI Daily Chart 2: KLCI Intraday

Local Market Leads:

♦ Buoyed by a rally in Chinese markets amid the Wall Street’s overnight rebound as well as expectations of a
possible revaluation of the Chinese yuan, the local market resumed its uptrend by climbing higher on Friday.

♦ In the overseas markets, talks of a possible 3% revaluation in the Chinese yuan sent Hang Seng (+1.56%) and
Shanghai Composite (+0.85%) sharply higher.

♦ This in turn, shored up the ringgit to a nearly 2-year high at 3.1880 vis-a-vis the US dollar, up from Thursday’s
3.2050.

♦ However, the overall gain was capped by the pre-weekend profit-taking activities, as investors decided to lock in
profit and trim trading positions.

♦ Due to last-minute selling on selective blue chips, the FBM KLCI pared down its gains to only 1.05 pts or 0.08%
to 1,333.98 on Friday.

♦ But, overall sentiment stayed positive as turnover hit 1.25bn shares for the day. Market breadth turned to
positive, with 470 gainers topped 266 losers.

Technical Interpretations:

♦ With the return of bargain-hunting supports on Friday, the FBM KLCI staged a timely bounce from the crucial 10-
day SMA near 1,332, as we expected earlier.

♦ This resulted in a formation of a “inverted hammer-like” candle, suggesting a possible further rebound ahead.

♦ But as the short-term momentum indicators turned mix, any rebound attempt could see immediate hurdle near
the recent high of 1,347.61.

♦ In other words, only by overcoming 1,347.61 will it refresh its bullish momentum to cover the entire technical
gap at 1,344.46 – 1,354.79.

♦ In the meantime, solid supports are near the 10-day SMA, the 2.6-pts technical gap at 1,305.03 and 1,300.

Please read important disclosures at the end of this report. Page 1 of 6

A comprehensive range of market research reports by award-winning economists and analysts are exclusively
available for download from www.rhbinvest.com
 12 April 2010

Daily Trading Strategy:

♦ Underpinned by timely return of the bargain-hunting supports, the FBM KLCI initiated a mild rebound from the
crucial 10-day SMA of 1,332.

♦ Although the index narrowed its gains to only 1-pt from the nearly 6-pts gain earlier on late selling on Friday, the
closing with a “inverted hammer-like” candle is enough to suggest a further rebound today, in our view.

♦ In addition, the solid gains in Wall Street on late Friday with the DJIA testing the 11,000 psychological barrier for
the first time in 19 months, the local market’s sentiment is expected to turn more positive today.

♦ As a result, we expect the FBM KLCI to remain at above the 10-day SMA with a daily turnover of 1.0bn – 1.2bn
shares, and foresee a renewed chance to retest the recent high of 1,347.61.

♦ A removal of 1,347.61 means a likely push to cover the entire gap of 1,344.46 – 1,354.79 and to march higher
towards the medium-term target at 1,390, in our view.

♦ The medium-term stronghold is at the 10-day SMA, followed by a technical gap at 1,305 and the solid
psychological level of 1,300.

♦ Going forward, the upcoming first-quarter earnings season from the US which starts from Monday will likely
provide a fresh lead to the local and overseas markets.

Table 2 : Major Indices & Commodities

Table 1 : Daily Statistics Change Change
Scoreboard 5 Apr 6 Apr 7 Apr 8 Apr 9 Apr Local Key Indices Closing
(Pts) (%)
Gainers 403 406 396 239 470 FBM KLCI 1,333.98 1.05 0.1
Losers 322 369 366 476 266 FBM 100 8,802.25 12.47 0.1
Unchanged 289 288 289 292 268 FBM ACE 4,295.13 40.88 1.0
Untraded 339 295 312 351 353
Major Overseas
Market Cap Indices
Turnover Dow Jones 10,997.35 70.28 0.6
(mln shares) 1,053 1,122 1,134 1,279 1,254 Nasdaq 2,454.05 17.24 0.7
Value (RM S&P 500 1,194.37 7.93 0.7
mln) 1,308 1,545 1,648 1,737 1,582 FTSE 5,770.98 58.28 1.0
Hang Seng 22,208.50 341.46 1.6
Currency Jakarta Composite 2,845.01 -5.82 -0.2
MYR vs US Nikkei 225 11,204.34 36.14 0.3
Dollar 3.2285 3.2130 3.2100 3.2050 3.1880 Seoul Composite 1,724.47 -9.31 -0.5
Shanghai Composite 3,145.35 26.64 0.9
Source: RHBInvest & Bloomberg SET 789.66 5.73 0.7
FT Straits Times 2,971.97 8.78 0.3
Taiwan Weighted 8,092.03 34.43 0.4
India Sensex 17,933.14 218.74 1.2
Major Commodities
NYMEX Crude Oil
(US$/barrel) 84.92 -0.47 -0.6
MDEX CPO – Third
Month (RM/metric ton) 2,553.00 53.00 2.1
US Interest Rate Current Last Updated
Overnight Fed Fund 16 Mar
0-0.25% Unch
Rate 2010
Next FOMC meeting 27-28 Apr 2010

Page 2 of 6

A comprehensive range of market research reports by award-winning economists and analysts are exclusively
available for download from www.rhbinvest.com
 12 April 2010

Chart 3: FKLI Daily Chart 4: FKLI Intraday

Technical Interpretations:

♦ Lifted by a rally in Hong Kong market on the back of a possible Chinese yuan revaluation, the FKLI launched a
powerful technical rebound from the critical support at the 10-day SMA on Friday.

♦ From the intraday low of 1,332.50, the bulls drove the futures index steadily higher amid favourable overseas
market’ sentiment.

♦ The FKLI surged as much as 12.50-pts to 1,344.50, before narrowing its gains to 8.00 pts or 0.60% to 1,340.00.

♦ And with the rebound from the 10-day SMA of 1,335, the futures index has acquired a positive candle. This
suggests further rebound could be underway today.

♦ But just like the cash market, the short-term momentum readings still flashed mixed signals, where the
stochastic oscillators continued to head downward.

♦ This means the futures index could still be capped by the recent high of 1,350.50 in the near term.

♦ Only by removing the 1,350 level, the FKLI can resume its bullish momentum and head towards 1,390, our
medium-term upside target.

♦ On the downside, the technical gap near 1,320.50 - 1,327.50 will likely cap selling pressure, apart from the
important 10-day SMA.

Daily Trading Strategy:

♦ The solid rebound from the 10-day SMA of 1,335 points to a further rebound today.

♦ Cautious traders can resume their “long” position when the FKLI removes 1,350.5.

♦ For today, it is likely to trade from 1,338 to 1,351.

Table 3: FKLI Closings

FKLI (Month)
Contracts Open High Low Close Chg (Pts) Settle Volume Open Interest
Apr 10 1335.00 1344.50 1332.50 1340.00 8.00 1340.00 4906 18724
May 10 1335.00 1344.00 1333.00 1344.00 16.00 1340.00 421 481
Jun 10 1334.00 1342.00 1332.00 1337.00 6.00 1338.00 90 493
Sep 10 1332.00 1340.00 1331.00 1337.00 8.00 1337.00 49 185

Source: Bursa Malaysia

Page 3 of 6

A comprehensive range of market research reports by award-winning economists and analysts are exclusively
available for download from www.rhbinvest.com
 12 April 2010

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

US Market Leads:

♦ Led by the advance in the energy stocks as well as upbeat US wholesale inventories data, the US markets
extended its gains with the DJIA briefly touched the 11,000 psychological threshold on Friday.

♦ Energy heavyweight, Chevron rose 2.4%, after saying that its refining and marketing would return to profit in the
first quarter. Also, Atlas Energy rallied 20% on news that Indian energy company Reliance Industries would buy a
stake on its project to provide natural gas for US$1.7bn.

♦ Technology stocks, Cisco Systems (+1.2%) and Microsoft (+1.3%) climbed higher after wholesale inventories
rose for the first time in three months in Feb with a rise of 0.6%, versus expectations of a 0.4% increase.

♦ The rally intensified further after European officials said they were ready to bail out Greece if needed.

♦ Meanwhile, the US light sweet crude oil futures for May delivery dropped for a third day, losing US$0.47 or 0.6%
to US$84.92/barrel.

Technical Interpretations:

Dow Jones Industrial Average (DJIA)

♦ US DJIA advanced to a high of 11,000.98 before easing to settle at 10,997.35 with a gain of 70.28 pts or 0.64%.

♦ Ended with a second solid bullish candle, plus its ability to take out the recent high of 10,988.06, the Dow is
primed for a breakout of the 11,000 psychological level soon.

♦ The next upside target is pegged at 11,250.

♦ Meanwhile, we continue to see solid supports near 10,850 and the 21-day SMA of 10,825.

Nasdaq Composite (Nasdaq)

♦ The Nasdaq Composite Index rose another 17.24 pts or 0.71% to end at its highest level since Jun 2008 at
2,454.05 on Friday.

♦ Apart from forming another positive candle, plus the strengthening short-term momentum readings, the chart is
pointing to an extension of its gain towards the next upside target at 2,470.

♦ Clearing the multi-year resistance of 2,470 will give a further lift to the current bullish momentum, as the next
upside target is seen only at 2,630.

♦ The supportive 21-day SMA of 2,402 will continue to underpin the current bulish uptrend.

Page 4 of 6

A comprehensive range of market research reports by award-winning economists and analysts are exclusively
available for download from www.rhbinvest.com
Daily Technical Watch:
Chart 7: KUB Daily Chart 8: KUB Intraday

KUB Malaysia (6874)

A likely removal of RM0.535 soon…

♦ After hitting a high of RM0.66 in Jun 2009, the share price of KUB corrected sharply, back to the RM0.43 low,
near a support of RM0.44.

♦ The stock tried to stabilise near the RM0.535 resistance level from Jul to Nov 2009, but later drifted lower
towards the RM0.44 level in Dec 2009.

♦ Thereafter, the stock has been fluctuating between RM0.44 and RM0.535.

♦ In Mar 2010, the stock created a 2-sen technical gap before clustering near the RM0.535 resistance level.

♦ The stock briefly breached RM0.535 on Friday to RM0.545, before closing at RM0.53 with a positive candle on the
chart. As the candlestick pattern suggests more upside today, it could penetrate the hurdle successfully soon.

♦ Further upside will lead to the strengthening of the momentum readings, and trigger more “buy” signals as the
stock has rebounded to above the 10-day SMA of RM0.521 last Friday.

♦ The next resistance is at RM0.65.

♦ Support can be found near the technical gap of RM0.49 to RM0.51 region, followed by the RM0.44 stronghold.

Technical Readings:

♦ 10-day SMA: RM0.521

♦ 40-day SMA: RM0.4899

♦ Support: IS = RM0.49 S1 = RM0.44 S2 = RM0.37

♦ Resistance: IR = RM0.535 R1 = RM0.65 R2 = RM0.80

Page 5 of 6

A comprehensive range of market research reports by award-winning economists and analysts are exclusively
available for download from www.rhbinvest.com
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
construed as an offer, invitation or solicitation to buy or sell the securities covered herein. RHBRI does not warrant the accuracy of anything stated herein in any
manner whatsoever and no reliance upon such statement by anyone shall give rise to any claim whatsoever against RHBRI. RHBRI and/or its associated persons
may from time to time have an interest in the securities mentioned by this report.

This report does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives
of persons who receive it. The securities discussed in this report may not be suitable for all investors. RHBRI recommends that investors independently evaluate
particular investments and strategies, and encourages investors to seek the advice of a financial adviser. The appropriateness of a particular investment or
strategy will depend on an investor’s individual circumstances and objectives. Neither RHBRI, RHB Group nor any of its affiliates, employees or agents accepts
any liability for any loss or damage arising out of the use of all or any part of this report.

RHBRI and the Connected Persons (the “RHB Group”) are engaged in securities trading, securities brokerage, banking and financing activities as well as providing
investment banking and financial advisory services. In the ordinary course of its trading, brokerage, banking and financing activities, any member of the RHB
Group may at any time hold positions, and may trade or otherwise effect transactions, for its own account or the accounts of customers, in debt or equity
securities or loans of any company that may be involved in this transaction.

“Connected Persons” means any holding company of RHBRI, the subsidiaries and subsidiary undertaking of such a holding company and the respective directors,
officers, employees and agents of each of them. Investors should assume that the “Connected Persons” are seeking or will seek investment banking or other
services from the companies in which the securities have been discussed/covered by RHBRI in this report or in RHBRI’s previous reports.

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
information known to, professionals in other business areas of the “Connected Persons,” including investment banking personnel.

The research analysts, economists or research associates principally responsible for the preparation of this research report have received compensation based
upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues.

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.

This report may not be reproduced or redistributed, in whole or in part, without the written permission of RHBRI and RHBRI accepts no liability whatsoever for the
actions of third parties in this respect.

Page 6 of 6

A comprehensive range of market research reports by award-winning economists and analysts are exclusively
available for download from www.rhbinvest.com