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

22 April 2010
MARKET DATELINE

Market Technical Reading

The Short-term Trend On The FBM KLCI Remains Negative...

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

Local Market Leads:

♦ Bursa Malaysia bucked the regional uptrend and reversed its early gains to close lower late Wednesday amid
renewed profit-taking pressures on key heavyweights, like Tenaga and CIMB.

♦ Earlier, local sentiment was buoyed by the continuous recovery in the overnight Wall Street amid optimism on the
current quarterly reporting season.

♦ Investors snapped up stocks after an upbeat quarterly result from US Apple Inc, but played down the multiple
lawsuits against financial giant, Goldman Sachs. They also ignored the recent tightening news in China.

♦ As a result, the Shanghai Composite rose 1.8%, followed by gains in Nikkei 225 (+1.74%) and KOSPI (+1.72%).

♦ In contrast, the local FBM KLCI dropped 2.26 pts or 0.17% to close at its day low of 1,333.64 after gaining as
much as 3.15 pts to 1,339.05 high earlier. Turnover increased to 875m shares from 797m shares previously.
Market breadth was positive with 399 gainers leading 288 losers.

Technical Interpretations:

♦ After hitting a high of 1,339.05, profit-taking activities set in, forcing the FBM KLCI into negative territory, before
ending the day with a negative candle on the chart.

♦ As the FBM KLCI ended below the 10-day SMA of 1,334 again, it is due to resume the recent selling pressure.

♦ This was in line with our previous warning, a failure to reclaim the 10-day SMA will mean a false recovery signal
recently.

♦ The index is therefore, likely to head towards the 40-day SMA of 1,316, the 2.6-pts technical gap at 1,305 and
the 1,300 psychological level in the near term.

♦ Immediate resistance is at the 10-day SMA and the recent high of 1,347.61.

Please read important disclosures at the end of this report.

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 22 April 2010

Daily Trading Strategy:

♦ Although the increase on yesterday’s turnover and the improved rotational sentiment on selective sectors might
appear encouraging, it was clearly not enough to convince a technical rebound for the FBM KLCI.

♦ In fact, the failure to recapture the 10-day SMA of 1,334 yesterday has indicated a likely resumption of the recent
selling momentum, in our view.

♦ This means that the index has remained in a short-term negative trend.

♦ We expect the FBM KLCI to retreat further on follow-through selling pressure towards its short-term downside
targets at the 40-day SMA of 1,316, a 2.6-pts technical gap near 1,305, and the 1,300 psychological level soon.

♦ To reverse the current negative short-term trend, the index must again, rebound to above the 10-day SMA and to
surpass the previous high of 1,347.61.

Table 2 : Major Indices & Commodities

Table 1 : Daily Statistics Change Change
Scoreboard 15 Apr 16 Apr 19 Apr 20 Apr 21 Apr Local Key Indices Closing
(Pts) (%)
Gainers 293 201 134 456 399 FBM KLCI 1,333.64 -2.26 -0.2
Losers 406 495 622 230 288 FBM 100 8,788.13 2.57 0.0
Unchanged 298 305 219 293 300 FBM ACE 4,164.73 -0.36 0.0
Untraded 363 359 388 384 376
Major Overseas
Market Cap Indices
Turnover Dow Jones 11,124.92 7.86 0.1
(mln shares) 1,045 784 813 797 875 Nasdaq 2,504.61 4.30 0.2
Value (RM S&P 500 1,205.94 -1.23 -0.1
mln) 1,638 1,207 1,210 1,218 1,293 FTSE 5,723.43 -60.26 -1.0
Hang Seng 21,510.93 -112.45 -0.5
Currency Jakarta Composite 2,912.83 21.56 0.7
MYR vs US Nikkei 225 11,090.05 189.37 1.7
Dollar 3.1925 3.1880 3.2150 3.2045 3.1950 Seoul Composite 1,747.58 29.55 1.7
Shanghai Composite 3,033.28 53.75 1.8
Source: RHBInvest & Bloomberg SET 757.85 -7.91 -1.0
FT Straits Times 2,967.65 -13.72 -0.5
Taiwan Weighted 7,990.53 90.11 1.1
India Sensex 17,472.56 11.98 0.1
Major Commodities
NYMEX Crude Oil
(US$/barrel) 83.68 -0.17 -0.2
MDEX CPO – Third
Month (RM/metric ton) 2,471.00 -27.00 -1.1
US Interest Rate Current Last Updated
Overnight Fed Fund 16 Mar
0-0.25% Unch
Rate 2010
Next FOMC meeting 27-28 Apr 2010

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 22 April 2010

Chart 3: FKLI Daily Chart 4: FKLI Intraday

Technical Interpretations:

♦ Dragged down by the late afternoon selling activities, the FKLI gave up its early gains by turning lower on
Wednesday.

♦ For most of the day, the futures index had been trading in positive territory, but the late selling pressed it down
into the negative territory. It ended at 1,334.00 with a 2.50 pts or 0.19% decline.

♦ This resulted in a negative candle which implies fresh selling activities ahead in the local futures market.

♦ Not helping too, the breakdown to below the 10-day SMA of 1,336 yesterday strengtened the odds of more
weakness today and signalled a false recovery in recent trading.

♦ As such, we expect the futures index to head lower to cover a tiny technical gap near 1,326 soon, before easing
towards the 40-day SMA of 1,318.

♦ The next critical support is seen at the 1,300 psychological level.

♦ On the upside, the futures index is expected to meet a tough resistance at the 10-day SMA, if it tries to stage a
rebound again.

♦ Beyond that level, a tougher resistance is at the previous high of 1,350.50.

Daily Trading Strategy:

♦ As the FKLI fell back to below the 10-day SMA of 1,336, its short-term outlook remains negative.

♦ In fact, the sellers are expected to return with a further downside target near the 1-pt gap near 1,326 and the
40-day SMA near 1,318.

♦ We expect the FKLI to fluctuate within a range between 1,325 and 1,336 today.

Table 3: FKLI Closings

FKLI (Month)
Contracts Open High Low Close Chg (Pts) Settle Volume Open Interest
Apr 10 1341.00 1343.00 1333.00 1334.00 -2.50 1334.00 3763 18802
May 10 1341.50 1343.00 1333.00 1333.00 -3.50 1334.00 405 1076
Jun 10 1342.00 1342.50 1332.00 1333.00 -2.00 1333.00 60 525
Sep 10 1342.00 1342.00 1332.00 1332.00 -3.00 1332.50 12 242

Source: Bursa Malaysia

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 22 April 2010

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

US Market Leads:

♦ Wall Street finished mixed on Wednesday, as the guidance cut for healthcare-related stocks overwhelmed upbeat
earnings from Apple Inc and Morgan Stanley.

♦ Healthcare stocks led the selling after Abbott Laboratories (-2.4%) and Gilead Sciences Inc (-9.6%) lowered their
profit forecasts, citing the negative impact from the recent approved US healthcare reform.

♦ This effectively outweighed investors’ enthusiasm over the 1Q earnings reporting season as well as a set of
impressively strong quarterly results from Apple Inc (+6.0%) and Morgan Stanley (+4.0%).

♦ The new front contract, the US light sweet crude oil futures for June delivery eased US$0.17 or 0.2% to
US$83.68/barrel after US crude inventories increased 1.9m barrels last week.

♦ After the closing bell, technology-related companies, the share prices of Qualcomm and EBay fell 6.0% and 6.4%
respectively after issuing earnings forecasts that missed Wall Street’s expectations.

Technical Interpretations:

Dow Jones Industrial Average (DJIA)

♦ The US DJIA added another 7.86 pts or 0.07% to end at 11,124.92 yesterday, but off its day high of 11,153.72
on profit-taking pressure.

♦ As the index registered a “star-like” candle, coupled with the failure to take out the recent high of 11,154.55, this
could stir up follow-through selling activities today.

♦ In other words, it is underway to retreat towards the 21-day SMA of 10,961 soon, unless the recent high of
11,154.55 can be completely removed to pave way to rechallenge the immediate resistance barrier of 11,250.

♦ Below the 21-day SMA, the next support will be at the key breakout point of 10,850.

Nasdaq Composite (Nasdaq)

♦ Despite an early setback, the US Nasdaq managed to rise 4.30 pts or 0.17% to 2,504.61 yesterday.

♦ But, the closing with a “hangman-like” candle points to an imminent pullback towards 2,470 soon.

♦ On the upside, it will have to muscle the recent high of 2,517.82 to regain further upside strength towards the
next resistance hurdle at 2,630.

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

IJM Corporation (3336)

A false breakout signal, if it loses RM5.00 today…

♦ IJM’s share price rallied along the supportive 40-day SMA since late Dec 2008, and survived the choppy trading
period from May to Sep 2009 before reaching its multi-year high of RM5.04 in Oct last year.

♦ As it failed to maintain at above the RM5.00 psychological level, it fell into a consolidation trend and was once
again dragged to a low of RM4.28 in Dec.

♦ During the last few months, the stock was fluctuating within both sides of RM4.57 as the sideways consolidation
trend dragged on.

♦ However, it staged a sharp rally from late Mar 2010, and managed to pierce through the heavy resistance level of
RM5.00 yesterday, following congestion near the RM4.80 - RM4.90 region recently.

♦ If it manages to cross the RM5.00 level successfully, it will trigger a chart breakout that could push the stock
even higher to RM5.30 and RM5.76 resistance zone soon.

♦ Unfortunately, the stock closed yesterday with a “shooting star” candle on late profit-taking pressure, implying a
high probability of a sharp retreat today.

♦ As the momentum indicators have remained mixed, the stock might not see a strong support near RM5.00. This
means yesterday’s penetration will turn out to be a false breakout signal, if it eases to below RM5.00 today.

♦ Upon further pullback, it will seek support from the 10-day SMA of RM4.891 and the RM4.80 – RM4.90 congested
area in the near term, to realign its upside strategy.

Technical Readings:

♦ 10-day SMA: RM4.891

♦ 40-day SMA: RM4.702

♦ Support: IS = RM5.00 S1 = RM4.57 S2 = RM4.17

♦ Resistance: IR = RM5.30 R1 = RM5.76 R2 = RM6.16

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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.

This report does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives
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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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