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

25 March 2010
MARKET DATELINE

Market Technical Reading

Short-term Volatility Likely To Persist...

Chart 1: KLCI Daily Chart 2: KLCI Intraday

Local Market Leads:

♦ The local bourse climbed higher for a second day on Wednesday, underpinned by a triple-digit rally on the
overnight US DJIA, and the confident comments by the Prime Minister in attracting foreign investment this year.

♦ The PM said affirmative action rules would be more market-friendly, transparent, merit-based to attract foreign
investment going forward. He is scheduled to announce the “New Economic Model” by the end of this month.

♦ Upon closing, the FBM KLCI rose another 4.60 pts or 0.35% to end at 1,309.45, with broad-based buying
supports on blue chips like CIMB (+26sen) and technology stocks like GTronic (+33sen).

♦ Underlying market sentiment improved despite strong profit-taking pressure in the afternoon session, on sluggish
performance in the regional markets.

♦ Regional markets gave up most of their early gains, as jitters increased ahead of an European Union’s special
summit to discuss Greek’s debt issues.

♦ Turnover in Bursa Malaysia rose to 1.14bn shares from Tuesday’s 908m shares. There were 453 gainers against
255 losers.

Technical Interpretations:

♦ After rising as much as 9.88 pts to 1,314.73 high, the FBM KLCI trimmed down its gains to 1,307.63 low before
ending the day at 1,309.45.

♦ On the chart, it acquired a “doji-like” candle to imply indecision on its immediate-term trend direction.

♦ If it loses the 1,300 breakout point and the 10-day SMA of 1,304 today, it will invite more selling activities, hence
indicating a likely resumption of the recent selling mode.

♦ Nevertheless, given the constant improvement on the momentum readings, the index should hover near the
1,300 level in the near term. This will keep the hope alive for a rechallenge of the recent high of 1,334.34.

Please read important disclosures at the end of this report.

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 25 March 2010

Daily Trading Strategy:

♦ Despite another positive closing yesterday, the FBM KLCI registered a “doji-like” candle. This suggests a possible
extension of yesterday’s profit-taking leg.

♦ Therefore, a clear immediate-term challenge to the index is to sustain at above the 10-day SMA near 1,304.
Otherwise, it will prove to be another false breakout signal on the chart.

♦ Nevertheless, we expect the index to linger near to the psychological level of 1,300 in the near term, on
sustained buying support on the index-linked counters.

♦ But, we maintain that short-term market volatility will persist, while stress that the medium-term outlook will
remain intact if the index stays at above the 1,250 – 1,300 major resistance zone.

Table 2 : Major Indices & Commodities

Table 1 : Daily Statistics Change Change
Scoreboard 18 Mar 19 Mar 22 Mar 23 Mar 24 Mar Local Key Indices Closing
(Pts) (%)
Gainers 302 278 301 447 453 FBM KLCI 1,309.45 4.60 0.4
Losers 364 357 364 253 255 FBM 100 8,578.45 37.08 0.4
Unchanged 279 286 280 278 295 FBM ACE 4,208.39 50.89 1.2
Untraded 402 427 403 371 346 Major Overseas
Indices
Market Cap Dow Jones 10,836.15 -52.68 -0.5
Turnover Nasdaq 2,398.76 -16.48 -0.7
(mln shares) 677 575 675 908 1,136 S&P 500 1,167.72 -6.45 -0.5
Value (RM FTSE 5,677.88 4.25 0.1
mln) 1,218 1,123 1,254 1,488 1,689 Hang Seng 21,008.62 20.84 0.1
Jakarta Composite 2,774.85 53.99 2.0
Currency Nikkei 225 10,815.03 40.88 0.4
MYR vs US Seoul Composite 1,681.01 -0.81 0.0
Dollar 3.3040 3.3020 3.3170 3.3170 3.3155 Shanghai Composite 3,056.81 3.68 0.1
SET 786.54 4.06 0.5
Source: RHBInvest & Bloomberg FT Straits Times 2,886.36 -19.30 -0.7
Taiwan Weighted 7,822.71 10.84 0.1
India Sensex 17,451.02 Closed Closed
Major Commodities
NYMEX Crude Oil
(US$/barrel) 80.61 -1.30 -1.6
MDEX CPO – Third
Month (RM/metric ton) 2,560.00 -31.00 -1.2
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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 25 March 2010

Chart 3: FKLI Daily Chart 4: FKLI Intraday

Technical Interpretations:

♦ The local futures market opened strongly yesterday, following a triple-digit rally on the US DJIA, but pared down
its gains after strong afternoon profit-taking pressure swept across the local and overseas markets.

♦ At the close, the FKLI for Mar contract inched up 1.0 pt or 0.08% to finish at 1,313.00, after fluctuating at
between 1,310.50 low and 1,318.00 high. The Apr contract added 1.50 pts or 0.11% to 1,313.50.

♦ As a result, the futures index formed a negative candle to indicate possible profit-taking dip today.

♦ Nevertheless, its downside risk appears limited as an expected support is seen near the 10-day SMA of 1,307 and
the 1,300 psychological level.

♦ Not only that, both short-term momentum readings have also stayed buoyant, suggesting the recent buying
momentum is likely to sustain.

♦ Therefore, profit-taking activities are likely to be shallow.

♦ Only if it gives up these key supports, the FKLI will fall back into a correction mode.

♦ Upside resistance stays firmly at the recent peak of 1,337.

Daily Trading Strategy:

♦ We expect profit-taking pressure to continue today, but its downside should be capped by the 10-day SMA of
1,307 and 1,300.

♦ Unless it can break out from yesterday’s high of 1,318.00, traders should wait for further confirmation before
turning bullish.

♦ We expect the FKLI to move from 1,304 to 1,315 today.

Table 3: FKLI Closings

FKLI (Month)
Contracts Open High Low Close Chg (Pts) Settle Volume Open Interest
Mar 10 1317.00 1318.00 1310.50 1313.00 1.00 1313.00 5578 19972
Apr 10 1317.00 1317.50 1311.50 1313.50 1.50 1313.50 1246 2344
Jun 10 1315.00 1317.00 1311.00 1312.00 2.50 1312.00 74 509
Sep 10 1314.00 1315.00 1311.50 1311.50 2.50 1312.00 18 206

Source: Bursa Malaysia

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 25 March 2010

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

US Market Leads:

♦ Overnight US stocks retreated from the 18-month high and closed lower on Wednesday, after Fitch Ratings cut
Portugal’s credit rating.

♦ Fitch Ratings lowered Portugal’s credit ratings to “AA-” from “AA,” due to the country’s deteriorating public
finances. Apart from that, a UBS AG economist also warned that Greece may default some of its debts.

♦ This rekindled fears over debt problems in the Eurozone, triggering capital outflows to the US dollar from the
riskier assets like equities and commodities.

♦ Compounded with a sharply higher-than-expected increase in US crude inventories last week, the US light sweet
crude oil futures for May delivery tanked US$1.30 or 1.6% to US$80.61/barrel.

Technical Interpretations:

Dow Jones Industrial Average (DJIA)

♦ With the resurfacing of profit-taking activities, the US DJIA lost the 10,850 important technical mark yesterday,
falling 52.68 pts or 0.48% to 10,836.15.

♦ Sealed with a “negative harami” candle, plus the failure to sustain at above 10,850, the index could see further
profit-taking activities today.

♦ In other words, unless it can quickly reclaim 10,850, the odds are higher that it is likely to retreat further in the
near term with strong immediate supports near a lower technical gap at 10,693.99 and the 21-day SMA of
10,581.

♦ To restore its bullish uptrend momentum, it must also reclaim the recent high of 10,893.89.

Nasdaq Composite (Nasdaq)

♦ After the recent strong run-up, the Nasdaq Composite Index fell 16.48 pts or 0.68% to 2,398.76 on Wednesday.

♦ Like the Dow, it recorded a “negative harami” candle, suggesting a slowdown in the recent bullish momentum.

♦ Coupled with the short-term momentum indicators turning mix, the chart is suggesting possible follow-through
profit-taking activities ahead.

♦ Having said that, we expect solid supports near the resistance-turn-support level of 2,330 and the 21-day SMA of
2,335. Immediate hurdle can be seen near the recent high of 2,416.51.

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

Time dotCom (5031)

Must sustain at above RM0.47 to avoid a sharp pullback…

♦ The share price of TimeCom began its sideways consolidation trend after touching a high of RM0.46 in May 2009.

♦ Since then, the stock has been constantly fighting to gain dominance over the RM0.41 critical support level.

♦ In early Mar 2010, the stock regenerated a renewed buying momentum and surpassed the RM0.41 level, before
encountering a mild pullback.

♦ Thanks to the supportive 10-day SMA, the stock resumed its upswing momentum and launched a sharp rally
yesterday, penetrating the key RM0.47 resistance level, with a huge bullish candle on the chart.

♦ Technically, the positive push on the share price has prompted the momentum indicators to turn upbeat.

♦ Expectedly, the stock could even retest a heavier resistance at RM0.54 in the near term should the buying
momentum continue.

♦ However, technically, the stock is now trading in the previous congestion area. This means a significant selling
pressure can be expected here.

♦ In fact, the immediate challenge for the stock now is to sustain at above RM0.47, to avoid an instant profit-taking
pressure.

♦ Upon losing the RM0.47 level will lead it to a sharp pullback to the RM0.41 support level.

Technical Readings:

♦ 10-day SMA: RM0.429

♦ 40-day SMA: RM0.3934

♦ Support: IS = RM0.47 S1 = RM0.41 S2 = RM0.345

♦ Resistance: IR = RM0.54 R1 = RM0.60

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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
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
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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
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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
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.

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