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

23 April 2010
MARKET DATELINE

Market Technical Reading

Investors To Stay Sidelined Ahead Of The Weekend...

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

Local Market Leads:

♦ Driven by the afternoon recovery in the regional markets, the local bourse turned around and ended positively on
Thursday, thanks to the last minute push-up on key heavyweight stocks.

♦ Earlier, Asian markets’ sentiment was depressed by a sharp decline in the overnight European markets amid
renewed concerns over Greece debt issue and fears of new financial regulations when US President Barack
Obama delivers a speech later on Thursday.

♦ Besides, investors also showed nervousness on the recent tightening trend by Asian central bankers. Hong Kong
government also proposed measures to avoid a housing bubble. These include a land auction to increase land
supply and a possible hike on the transaction tax on properties valued at or below HK$20m.

♦ But mild bargain-hunting resurfaced in the late session, boosted by a strong reversal in major regional markets
like FTSTI (+0.44%) and Sensex (+0.58%) after European markets rallied in their early session.

♦ This propelled the FBM KLCI into positive region, gaining 3.37 pts or 0.25% to 1,337.01 for the day. Turnover,
however, declined to 834m shares from 875m shares on Wednesday, with 333 advancers against 307 decliners.

Technical Interpretations:

♦ Earlier in the day, the FBM KLCI dipped to 1,331.48 low, but late buying supports managed to lift it back to above
the 10-day SMA of 1,335 with a “positive harami” candle on the chart at the end of the session.

♦ Underpinned further by positive short-term momentum readings, the index may possibly see further upside
potential today, to retest the recent high of 1,347.61.

♦ However, before confirming a positive twist on the short-term outlook, the index must chalk up another positive
candle at above the 10-day SMA today.

♦ Not only that, it must also remove the recent high of 1,347.61 to attract more buying momentum. For now, lower
support is seen near the 40-day SMA of 1,317.

Please read important disclosures at the end of this report.

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 23 April 2010

Daily Trading Strategy:

♦ As the bulls struggled on, the FBM KLCI staged a timely bounce to above the crucial 10-day SMA of 1,335
yesterday in a bid to restore a positive short-term view on its technical outlook.

♦ Based on the closing, the local benchmark certainly stands a better chance to push for more gains today.

♦ But the index still faces some challenges ahead. Not only must it acquire a positive candle at above the 10-day
SMA today, the market must also attract enough trading volume to sustain the improved trading sentiment going
forward.

♦ Moreover, the FBM KLCI must also remove the recent high of 1,347.61, before it can regenerate further upside
push to challenge the 1,390 medium-term resistance level.

♦ Failing to achieve the above criteria will draw back the recent selling pressure, hence dragging the index lower
towards the supports near the 40-day SMA of 1,317, a 2.6-pts technical gap near 1,305, and the 1,300
psychological level.

♦ Investors might opt to stay on the sidelines today ahead of the weekend, pending more clearances from the
technical layout, in our view.

Table 2 : Major Indices & Commodities

Table 1 : Daily Statistics Change Change
Scoreboard 16 Apr 19 Apr 20 Apr 21 Apr 22 Apr Local Key Indices Closing
(Pts) (%)
Gainers 201 134 456 399 333 FBM KLCI 1,337.01 3.37 0.3
Losers 495 622 230 288 307 FBM 100 8,810.11 21.98 0.3
Unchanged 305 219 293 300 324 FBM ACE 4,167.55 2.82 0.1
Untraded 359 388 384 376 398
Major Overseas
Market Cap Indices
Turnover Dow Jones 11,134.29 9.37 0.1
(mln shares) 784 813 797 875 834 Nasdaq 2,519.07 14.46 0.6
Value (RM S&P 500 1,208.67 2.73 0.2
mln) 1,207 1,210 1,218 1,293 1,190 FTSE 5,665.33 -58.10 -1.0
Hang Seng 21,454.94 -55.99 -0.3
Currency Jakarta Composite 2,926.53 13.70 0.5
MYR vs US Nikkei 225 10,949.09 -140.96 -1.3
Dollar 3.1880 3.2150 3.2045 3.1950 3.1955 Seoul Composite 1,739.52 -8.06 -0.5
Shanghai Composite 2,999.48 -33.80 -1.1
Source: RHBInvest & Bloomberg SET 761.18 3.33 0.4
FT Straits Times 2,980.69 13.04 0.4
Taiwan Weighted 7,978.69 -11.84 -0.1
India Sensex 17,573.99 101.43 0.6
Major Commodities
NYMEX Crude Oil
(US$/barrel) 83.70 0.02 0.0
MDEX CPO – Third
Month (RM/metric ton) 2,490.00 19.00 0.8
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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 23 April 2010

Chart 3: FKLI Daily Chart 4: FKLI Intraday

Technical Interpretations:

♦ As bargain hunters returned amid the improved regional recovery pace, the local futures index managed to chart
a surprise comeback in the afternoon session.

♦ Though it started the day on a negative note, and lost as much as 6.50 pts to a low of 1,327.50, the FKLI for Apr
contract worked its way up in the afternoon and closed impressively up by 8.00 pts or 0.60% to 1,342.00.

♦ This translated to a “bullish engulfing” candle, indicating more upside potential today.

♦ The futures index managed to reclaim the important 10-day SMA of 1,337, and both the 14-day RSI and the
stochastic oscillators have also turned higher to point to a stronger rebound ahead.

♦ Given yesterday’s reading, this could extend its recovery and head towards the previous high of 1,350.50 soon, if
it receives an uninterrupted buying support today.

♦ Cautiously, traders should also beware that sellers will reappear instantly if the buying momentum is not
consistent. That will drag the futures index back to below the 10-day SMA again and to close the strong 6-pt
premium against the cash index soon. Thus, renewing the short-term negative threat.

♦ The next lower support is at the 1-pt technical gap near 1,326, followed by the 40-day SMA of 1,320.

Daily Trading Strategy:

♦ The surprised move to reclaim the 10-day SMA yesterday by the FKLI has renewed hope to trigger a potential
technical rebound soon.

♦ But a positive confirmation candle at above the SMA today is still needed to confirm the rebound. Failing so will
reinduce the selling activities.

♦ For today, the FKLI is likely to swing from 1,334 to 1,345, in our view.

Table 3: FKLI Closings

FKLI (Month)
Contracts Open High Low Close Chg (Pts) Settle Volume Open Interest
Apr 10 1328.50 1342.00 1327.50 1342.00 8.00 1342.00 4802 18895
May 10 1326.50 1341.00 1326.50 1341.00 7.00 1341.00 820 1234
Jun 10 1330.50 1340.00 1326.50 1340.00 7.00 1340.00 101 533
Sep 10 1328.00 1339.00 1327.50 1339.00 6.50 1340.00 28 245

Source: Bursa Malaysia

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 23 April 2010

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

US Market Leads:

♦ US markets staged a strong reversal in the afternoon on Thursday, as sentiment was boosted by easing concerns
over tighter regulations in the financial sector as well as some upbeat earnings.

♦ Earlier, the markets were hampered by renewed worries over Greece which triggered a sharp correction in
European markets. The European Union (EU) said Greece’s deficit last year was 13.6% of GDP, higher than the
early Apr forecast of 12.9%. This forced Moody’s Investors Service to cut Greece’s bond ratings to A3 from A2,
and warned it may downgrade its rating further.

♦ However, bargain-hunting supports took shape after banking stocks started to rebound as US President Barack
Obama in his speech mentioned no new financial regulations. Also, investors welcomed strong earnings from
Starbucks (+7.3%) and ScanDisk (+12.3%).

♦ US light sweet crude oil futures for June delivery inched up 2 cents to US$83.70/barrel on strong equity markets.

♦ After the close, Amazon and Microsoft fell 6% and 5% each after reporting earnings that missed forecasts.

Technical Interpretations:

Dow Jones Industrial Average (DJIA)

♦ After taking a more than 100-pts pullback, the US DJIA gradually turned around and finished 9.37 pts or 0.08%
higher to 11,134.29 on Thursday.

♦ Still, it recorded a potential “hangman-like” candle, suggesting the downside risk is still persists.

♦ As such, we see an urgent need for it to quickly overcome the recent high of 11,154.55 in a bid to extend its
uptrend towards the next resistance barrier of 11,250.

♦ Otherwise, a retreat to the 21-day SMA of 10,978 is still possible. The next lower support is at 10,850.

Nasdaq Composite (Nasdaq)

♦ After an early retest of the key 2,470 technical level, the Nasdaq Composite staged a sharp recovery, bouncing
from 2,468.26 low to end up by 14.46 pts or 0.58% to 2,519.07, its highest since early June 2008.

♦ With that, it has overtaken the recent high of 2,517.82 with a “bullish engulfing” candle, implying higher odds of
expanding its rally towards the next upside target at 2,630 soon.

♦ On the downside, we still see 2,470 and the 21-day SMA of 2,446 to underpin the current upswing.

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

Gamuda (5398)

Must sustain at above RM3.06 to protect the recent bullish technical breakthrough…

♦ After breaching below the key technical support of RM3.06 in late-Nov 2009, the share price of Gamuda was
hammered down by strong selling pressure to a multi-month low of RM2.61.

♦ The stock then drifted lower to hit the RM2.58 low, near the chart support at RM2.59 in Dec 2009, before staging
a technical rebound. Thereafter, the stock trended within the RM2.59 – RM3.06 region.

♦ After a rangebound trading for nearly five months, the stock finally broke out from the tough support-turned-
resistance barrier of RM3.06 on Wednesday, reinitiating a fresh technical breakout call on the chart.

♦ But as it ended unchanged at RM3.08 with a “doji” candle yesterday, this suggests uncertainties on the
immediate-term outlook.

♦ Going forward, it must sustain its gains at above the RM3.06 key level in order to protect the recent bullish
technical breakthrough momentum.

♦ Only then, will it pave the way to rechallenge the Aug 2009 high of RM3.44, before heading towards the next
tough medium-term hurdle at RM3.64.

♦ On a negative note, losing the RM3.06 could threaten its outlook and trigger a pullback on the chart, where the
stock could retreat towards the immediate support at the 10-day SMA near RM3.00.

Technical Readings:

♦ 10-day SMA: RM3.004

♦ 40-day SMA: RM2.871

♦ Support: IS = RM3.06 S1 = RM2.59 S2 = RM2.20

♦ Resistance: IR = RM3.64 R1 = RM4.10

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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
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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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