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

15 June 2010
MARKET DATELINE

Market Technical Reading

Solid Obstacle of 1,300 To Stay...

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

Local Market Leads:

Bursa Malaysia edged higher for a fifth trading day on quiet trading on Monday, underpinned by the improved
overseas sentiment after the US markets scored a second day of gain on last Friday.

At the close, the FBM KLCI rose another 2.49 pts or 0.19% to 1,297.16, as selective blue chips, like PBB (+12sen)
and IOICorp (+3sen) attracted mild buying support.

Elsewhere, Asian markets headed higher, buoyed by strong gains in the US futures markets as well as strong
opening in the European markets.

Nevertheless, overall trading activities appeared tepid, as daily turnover was flat at 502m shares yesterday, due
to the FIFA 2010 World Cup fever and school holidays.

On the broader market, market breadth stayed positive with 302 gainers outpacing 241 losers.

Technical Interpretations:

Instead of heading lower, the FBM KLCI marched higher on follow-through buying momentum. It settled the day
with a positive harami candle to ease profit-taking momentum.

Aided by the continuous improvement in the short-term momentum, the benchmark stands a good chance to
extend the current rebound leg.

And therefore, we can expect another rechallenge of the heavy support-turned-resistance of 1,300 today.

Having said that, 1,300 should remain a key resistance to the FBM KLCI in its attempt to stage a meaningful
technical rebound, in our view.

Without a solid breakout from 1,300 with strong volume, profit-taking activities could still set in at anytime soon
with the immediate downside supports near a technical gap at 1,293.27 1,294.67 and the 10-day SMA of 1,290.

Please read important disclosures at the end of this report.

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 15 June 2010

Daily Trading Strategy:

Based on yesterdays closing, the FBM KLCI is poised to extend its recent technical rebound today.

Combined with other improved technical readings, another rechallenge of the key overhead resistance at 1,300 is
well underway.

But as far as we are concerned, 1,300 will continue to become a major obstacle on the upside. Plus the absence
of strong buying conviction lately, its ability to overcome 1,300 decisively is clearly in doubt.

And so long as there is no convincing breakthrough from 1,300 with average daily volume of 800m 1.0bn
shares, investors should be wary of a possible resumption of fresh selldown soon.

On the downside, its immediate support is at a technical gap at 1,293.27 1,294.67, followed by the 10-day SMA
of 1,290. Meanwhile, the next higher resistance is pegged at the 40-day SMA near 1,314.

Table 2 : Major Indices & Commodities

Table 1 : Daily Statistics Change Change
Scoreboard 8 June 9 June 10 June 11 June 14 June Local Key Indices Closing
(Pts) (%)
Gainers 349 344 261 380 302 FBM KLCI 1,297.16 2.49 0.2
Losers 271 266 280 193 242 FBM 100 8,516.12 20.60 0.2
Unchanged 221 260 290 282 269 FBM ACE 3,814.44 17.99 0.5
Untraded 534 505 541 517 556 Major Overseas
Indices
Market Cap Dow Jones 10,190.89 -20.18 -0.2
Turnover Nasdaq 2,243.96 0.36 0.0
(mln shares) 521 630 733 502 502 S&P 500 1,089.63 -1.97 -0.2
Value (RM FTSE 5,202.13 38.45 0.7
mln) 768 795 743 840 665 Hang Seng 20,051.91 179.53 0.9
Jakarta Composite 2,826.84 24.94 0.9
Currency Nikkei 225 9,879.85 174.60 1.8
MYR vs US Seoul Composite 1,690.60 15.26 0.9
Dollar 3.3240 3.3170 3.3000 3.2820 3.2600 Shanghai Composite 2,569.94 Closed Closed
SET 781.13 11.58 1.5
Source: RHBInvest & Bloomberg FT Straits Times 2,818.07 21.78 0.8
Taiwan Weighted 7,387.40 87.91 1.2
India Sensex 17,338.17 273.22 1.6
Major Commodities
NYMEX Crude Oil
(US$/barrel) 75.12 1.34 1.8
MDEX CPO Third
Month (RM/metric ton) 2,410.00 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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 15 June 2010

Chart 3: FKLI Daily Chart 4: FKLI Intraday

Technical Interpretations:

Taking the positive external leads, the local futures market finally pierced beyond the 1,300 key psychological
barrier for the first time since late-May on Monday.

After trading tightly for most of the day, buying momentum gathered pace in the late session, when the European
markets and the US futures markets spiked higher.

Upon closing, the FKLI for June contract jumped another 7.50 pts or 0.58% to 1,304.50 amid on thin trading.

From the technical angle, the clearance of 1,300 marks a positive turnaround in the near-term technical view.

Coupled with a double buy signal on the momentum indicators, this should repoint to a further run-up towards
the 40-day SMA near 1,313 soon.

But due to yesterdays hangman candle, we prefer to stay cautious and wait for further confirmation signal
today. Candlestick wise, a hangman candle means downside risk.

Therefore, the FKLI must earn a positive confirmation candle at above 1,300 today in order to kick off a
meaningful technical rebound.

But if it fails, sellers will return and this could potentially trigger profit-taking dips towards 1,300 and the 10-day
SMA near 1,289 soon.

Daily Trading Strategy:

Against our earlier expectation, the FKLI successfully reclaimed the 1,300 psychological hurdle yesterday to
suggest a positive turn in the near-term direction.

But with the hangman candle on the chart, traders should wait for a further confirmation signal before turning
positive on the FKLI.

The FKLI is expected to trade from 1,303 and 1,313 today.

Table 3: FKLI Closings

FKLI (Month)
Contracts Open High Low Close Chg (Pts) Settle Volume Open Interest
Jun 10 1303.00 1305.00 1299.50 1304.50 7.50 1304.50 3263 17054
Jul 10 1302.00 1304.50 1298.50 1304.50 8.00 1304.50 174 455
Sep 10 1301.00 1302.00 1298.00 1302.00 7.00 1302.00 60 463
Dec 10 1300.50 1301.50 1299.00 1301.00 5.00 1302.50 12 259

Source: Bursa Malaysia

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 15 June 2010

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

US Market Leads:

Wall Street snapped a 2-day rebound on Monday, with the DJIA giving up its more than 100-pts early rally after
Moody's Investors Service downgraded Greeks debt.

Initially, major gauges extended its recent rebound, as investor confidence was boosted by a sharp increase in
the eurozone industrial output in Apr.

Buying fenzy, however, fizzled out after Moodys Investors Service cut Greece's government-bond ratings by four
notches to Ba1, a junk-grade rating.

As a result, key Dow components, like DuPont Co (-2%) and JPMorgan Chase (-2%) finished lower.

On the NYMEX, the US light sweet crude oil futures for July delivery also trimmed its gains and ended up US$1.34
or 1.8% to US$75.12/barrel on news of a downgrade in Greeks debt.

Technical Interpretations:

Dow Jones Industrial Average (DJIA)

In line with the previous hangman candle, the US DJIA staged a sharp negative reversal from its days high of
10,328.67, falling 20.18 pts or 0.20% to end at 10,190.89 on Monday.

And by recording a shooting star candle on the chart, the risk of a near-term pullback is running high.

Once profit-taking activities set in, we expect it to revisit the immediate supports near the 10,150 support level
and the 10,000 psychological level soon.

Should these supports fail to curb selling pressure, this will signal the end of the recent technical rebound. The
next lower key support is at the recent low of 9,757.55.

Nasdaq Composite (Nasdaq)

After rising to 2,278.96 high, the Nasdaq Composite Index suffered fresh profit-taking pressure. By the end of the
day, it only inched up 0.36 pt or 0.02% to 2,243.96.

Technically, the failure to recapture the 21-day SMA of 2,244.76 and a formation of a negative candle spells a
renewed downside risk ahead.

In other words, it could stage a technical pullback towards the 2,190 support level and the recent low of 2,139.46
soon.

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

Affin Holdings (5185)

Decisive removal of RM3.08 still required to confirm bullish channel breakout

Following a strong run-up to a 10-year high at RM3.29 in early Apr 2010, Affins uptrend took a bearish reversal
by slipping to constant profit-taking pressure.

Since then, the stock trended lower within the Downtrend Channel (DTC).

But after a downtrend consolidation for nearly 2 months, it finally kick-started a steady technical recovery, as it
bounced back from the recent low of RM2.75, near the lower band of the DTC in late-May.

It then scaled higher and even regained above the 10-day and 40-day SMAs recently, before running into a
resistance near the upper band of the DTC on last Friday.

But backed by solid buying support, it managed to take out the upper band with a positive candle on Monday,
and charted a positive technical breakthrough on the share price. For the day, it was up 6sen to end on the dot of
the important technical level at RM3.08.

While the latest technical developments have been encouraging, a further decisive removal of the tough overhead
hurdle at RM3.08 with strong volume today is still required for it to confirm a potential bullish channel breakout.

Once a channel breakout rally set in, this will lead it to a further rally towards the upper resistance targets at
Aprs high of RM3.29 and the RM3.45 hurdle.

Failure to penetrate RM3.08, if it happens, could result in a resumption of a downtrend consolidation within the
DTC.

Technical Readings:

10-day SMA: RM2.977

40-day SMA: RM2.997

Support: IS = RM2.70 S1 = RM2.40 S2 = RM2.14

Resistance: IR = RM3.45 R1 = RM3.71

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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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