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

14 June 2010
MARKET DATELINE

Market Technical Reading

Trading Interest To Stay Dull...

Chart 1: FBM KLCI Daily Chart 2: FBM KLCI Intraday

Local Market Leads:

Inspired by a strong rally on the overnight Wall Street, the local market extended its recent winning streak for
four consecutive days on thin trading interest on Friday.

Overnight, the US markets rallied more than 2.8% amid the improvement in the euro debt markets condition as
well as solid economic data from major countries, like China.

In response, Asian markets, including Bursa Malaysia staged a further rebound. But gains were capped by the
pre-weekend profit-taking activities and a weak opening in the European markets.

Upon closing, the FBM KLCI gained only 3.36 pts or 0.26% to end at the days low of 1,294.67, after crossing
over the 1,300 psychological level at one stage.

Trading interest subsided with daily turnover declining sharply to 502m shares, down from Thursdays 733m
shares. There were 380 gainers versus 193 losers.

Technical Interpretations:

The FBM KLCI started the day on a strong note, as it soared as much as 10.76 pts to 1,302.07 high to cover the
previous technical gap near 1,300, before drifting lower on constant profit-taking activities.

By the end of the day, it acquired a small negative candle to suggest a possible weakness ahead.

This means it could turn lower to cover last Fridays new technical gap at 1,293.27 1,294.67 on follow-through
pofit-taking pressure, before revisiting the 10-day SMA of 1,288.

But with the recent fresh buy signal on the stochastic oscillators and the improved 14-day RSI, it should see an
immediate support near the 10-day SMA. The next lower supports are a technical gap at 1,269.42 - 1,271.55 and
the 1,250 critical level.

On the upside, the solid support-turned-resistance at 1,300 will continue to prevent it from turning positive.

Please read important disclosures at the end of this report.

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 14 June 2010

Daily Trading Strategy:

In line with our expectation, sellers returned near the 1,300 heavy psychological barrier after the FBM KLCI
covered a technical gap when it hit an intraday high of 1,302.07 on last Friday.

This resulted in a failure to take out the 1,300 level, and added with a negative candle, the benchmark is likely to
experience further profit-taking activities today, in our opinion.

In other words, we expect it to cover the lower technical gap at 1,293.27 1,294.67 soon, before retesting the
10-day SMA near 1,288.

Apart from that, trading interest is expected to stay dull in the near term, as most investors are likely to turn
away from the market for the FIFA 2010 World Cup and school holidays.

Therefore, until the FBM KLCI can decisively break out from the 1,300 major psychological hurdle with strong
daily turnover at between 800m 1.0bn shares, any rebound attempt will be short-lived and unsustainable, in
our view.

Table 2 : Major Indices & Commodities

Table 1 : Daily Statistics Change Change
Scoreboard 7 June 8 June 9 June 10 June 11 June Local Key Indices Closing
(Pts) (%)
Gainers 151 349 344 261 380 FBM KLCI 1,294.67 3.36 0.3
Losers 463 271 266 280 193 FBM 100 8,495.52 26.65 0.3
Unchanged 206 221 260 290 282 FBM ACE 3,796.45 25.63 0.7
Untraded 555 534 505 541 517 Major Overseas
Indices
Market Cap Dow Jones 10,211.07 38.54 0.4
Turnover Nasdaq 2,243.60 24.89 1.1
(mln shares) 492 521 630 733 502 S&P 500 1,091.60 4.76 0.4
Value (RM FTSE 5,163.68 31.18 0.6
mln) 844 768 795 743 840 Hang Seng 19,872.38 239.68 1.2
Jakarta Composite 2,801.90 31.11 1.1
Currency Nikkei 225 9,705.25 162.60 1.7
MYR vs US Seoul Composite 1,675.34 23.64 1.4
Dollar 3.3310 3.3240 3.3170 3.3000 3.2820 Shanghai Composite 2,569.94 7.36 0.3
SET 769.55 1.39 0.2
Source: RHBInvest & Bloomberg FT Straits Times 2,796.29 16.71 0.6
Taiwan Weighted 7,299.49 117.72 1.6
India Sensex 17,064.95 142.87 0.8
Major Commodities
NYMEX Crude Oil
(US$/barrel) 73.78 -1.70 -2.3
MDEX CPO Third
Month (RM/metric ton) 2,386.00 -24.00 -1.0
US Interest Rate Current Last Updated
27-28 Apr
Overnight Fed Fund Rate 0-0.25% Unch
2010
Next FOMC meeting 22-23 June 2010

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 14 June 2010

Chart 3: FKLI Daily Chart 4: FKLI Intraday

Technical Interpretations:

After a strong early run-up, the FKLI failed to sustain its gains at above the 1,300 psychological threshold on
renewed profit-taking pressure in the afternoon on Friday.

This is chiefly because some regional peers, like Hong Kong and India markets experienced profit-taking pressure
in the late afternoon.

As a result, the FKLI for June contract ended at 1,297.00, a merely 2.50 pts or 0.19% gain. Earlier in the day, it
scored as much as 13.5 pts gain.

Judging from its first negative candle in eight trading days, it is now at risk of facing more profit-taking pressure
in the coming days.

If profit-taking leg takes shape, we expect a further retreat towards the immediate support at the 10-day SMA
near 1,287 soon.

The next support is sighted at 1,270.

On the other hand, any fresh rebound attempt will continue to meet stiff resistance near the 1,300 major
psychological hurdle, followed by the 40-day SMA of 1,313.

And as long as 1,300 stays effective, we remain negative on the FKLIs near- to medium-term direction.

Daily Trading Strategy:

Clearly, the failure to remove the 1,300 psychological barrier shows that the bears are still in control.

Therefore, until 1,300 can be decisively cleared out, traders should watch out for possible fresh selling leg ahead.

Today, we expect the FKLI to trade at between 1,290 and 1,308.

Table 3: FKLI Closings

FKLI (Month)
Contracts Open High Low Close Chg (Pts) Settle Volume Open Interest
Jun 10 1303.00 1308.50 1296.00 1297.00 2.50 1297.00 5945 17626
Jul 10 1301.00 1306.00 1295.50 1295.50 2.50 1296.50 299 384
Sep 10 1299.50 1305.00 1293.00 1293.00 1.00 1295.00 67 465
Dec 10 1299.50 1303.00 1296.00 1296.00 4.00 1296.00 16 247

Source: Bursa Malaysia

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 14 June 2010

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

US Market Leads:

Thanks to an upbeat earnings forecast from National Semiconductor Corp as well as better-than-expected reading
in consumer sentiment, the US major gauges managed to overcome the earlier sell-off by closing higher for a
second day on Friday.

Earlier, the markets experienced selling activities after the US retail sales surprisingly dropped in May -- the first
time in eight months. Retail sales fell 1.2%, against market expectation of a 0.2% rise.

However, fresh buying support returned after National Semiconductor (+5.0%) forecast a stronger-than-expected
margin and revenues. Also, investors were further boosted by a rise in the University of Michigans preliminary
index of consumer sentiment. The index increased to 75.5, the highest level since Jan 2008.

On the other hand, the US light sweet crude oil futures for July delivery reversed the recent rebound by sliding
US$1.70 or 2.3% to US$73.78/barrel on the poor US retail sales data.

Technical Interpretations:

Dow Jones Industrial Average (DJIA)

After retreating to 10,082.71 low in the early session, the US DJIA turned around and added another 38.54 pts or
0.38% to 10,211.07 on Friday.

Technically, a closing at above the 21-day SMA of 10,201 spells more upside potential in the near term.

But a further confirmation signal is needed, as it recorded a hangman candle on Friday to imply a pullback
ahead.

In other words, the index is at risk of staging a technical pullback towards the 10,150 support level and the
10,000 psychological level soon, unless it can earn a positive confirmation candle at above the 21-day SMA today.

Nasdaq Composite (Nasdaq)

Backed by strong follow-through buying momentum, the Nasdaq Composite Index expanded its recent gain by
rising 24.89 pts or 1.12% to 2,243.60 on Friday.

Ended with a second bullish candle, a rechallenge of the 21-day SMA of 2,252 looks imminent.

But for the index to break out from the current consolidation phase, it must fully overcome the 21-day SMA and
2,330.

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

TopGlove (6238)

Longer-term heavy resistances stay solidly at RM14.00 and the all-time high of RM14.02

Profit-taking activities on TopGlov took place after it peaked at its all-time high of RM14.02 near the RM14.00
solid resistance barrier in early Apr 2010.

Selling pressure intensified in late-Apr, when it breached below the 10-day SMA, and as the 10-day SMA cut
below the 40-day SMA to trigger a negative medium-term outlook on the chart.

Subsequently, it lost the RM12.00 psychological support level in early May, but it managed to bounce back
immediately from the recent low of RM11.18 to above RM12.00.

Thereafter, it started to consolidate by fluctuating at between RM12.00 and RM12.70 range.

Of late, its recovery momentum gathered pace after crossing above the 40-day SMA. On Friday, it charged
further by surging 30sen to end at RM12.90 with a bullish candle.

Compounded with the upbeat momentum readings, and a potential golden coss between the 10-day and 40-day
SMAs, this should pave the way for it to expand its recovery strength towards Aprs high of RM13.18 soon.

Potentially, clearing of the Aprs high will mean more upside ahead.

But over the longer term, we continue to see solid resistance near the major resistance hurdle of RM14.00 and
the all-time high of RM14.02.

Technical Readings:

10-day SMA: RM12.396

40-day SMA: RM12.457

Support: IS = RM12.00 S1 = RM10.60 S2 = RM9.70

Resistance: IR = RM14.00

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IMPORTANT DISCLOSURES

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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 RHBRIs 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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