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

30 April 2010
MARKET DATELINE

Market Technical Reading

Lack Of Positive Confirmation, Stay Cautious...

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

Local Market Leads:

♦ Bursa Malaysia kicked off a mild rebound early Thursday, after the US Federal Reserve pledged to maintain the
current easy money policy for an extended period.

♦ However, in line with most of the Asian markets, the local bourse turned lower in the mid-day amid concerns that
the sovereign-debt problem might spread to other Eurozone members after Standard & Poor’s downgraded the
credit rating on Spain, where the size of its GDP is about five times that of Greece and Portugal.

♦ Plus the ongoing worries of more potential tightening moves in China, investors switched back to cautious mode.
This resulted in a mixed closing in regional markets. The FTSTI rose 0.92%, but Shanghai Composite shed 1.10%.

♦ Locally, the FBM KLCI gained 2.69 pts or 0.20% to 1,335.86, off the day’s high of 1,336.89, led by selective
bargain-hunting support on Genting (+11sen) and Digi (+40sen).

♦ Daily turnover rose to 899m shares from Wednesday’s 831m shares. But market breadth stayed negative, with
363 decliners outpacing 347 advancers.

Technical Interpretations:

♦ A day after forming a “hammer” candle, the FBM KLCI bounced back mildly with a small positive candle on
Thursday, on the dot of the important 10-day SMA of 1,335.

♦ Technically, it has yet to confirm a crossover of the 10-day SMA. Moreover, yesterday’s gain has failed to cover
the gap at 1,337.07.

♦ This means the market remains doubtful on any potential technical rebound ahead.

♦ The index must earn more positive candles to convince a strong technical rebound in the near term, otherwise,
sellers will return swiftly to sink the index to the 40-day SMA near 1,324, a 2.6-pts technical gap near 1,305 as
well as the 1,300 psychological level soon.
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 30 April 2010

Daily Trading Strategy:

♦ Indeed, the FBM KLCI staged a mild recovery towards the 10-day SMA near 1,335 yesterday, as we had expected
earlier.

♦ However, as it merely closed on the dot of the 10-day SMA, the candlestick pattern lacks confirmation and is less
convincing for a strong follow-through buying momentum ahead.

♦ In our view, it must register more positive candles in order to jump-start the lacklustre trading sentiment, in view
of the slower daily turnover of late.

♦ Ideally, the daily market volume should be around 1.0bn – 1.2bn shares, with a positive market breadth to be
able to churn up enough trading activities to sustain a technical rebound.

♦ Or else, the sellers will more likely capitalise on the mild rebound to trim their positions further.

♦ As such, we stay cautious pending more technical points before revising our short-term expectation.

♦ Supports remain at the 40-day SMA of 1,324, a technical gap near 1,305 and the 1,300 psychological level.

Table 2 : Major Indices & Commodities

Table 1 : Daily Statistics Change Change
Scoreboard 23 Apr 26 Apr 27 Apr 28 Apr 29 Apr Local Key Indices Closing
(Pts) (%)
Gainers 305 362 178 236 347 FBM KLCI 1,335.86 2.69 0.2
Losers 352 306 502 472 363 FBM 100 8,778.16 16.69 0.2
Unchanged 333 306 308 276 279 FBM ACE 4,163.63 -13.59 -0.3
Untraded 369 384 377 385 378
Major Overseas
Market Cap Indices
Turnover Dow Jones 11,167.32 122.05 1.1
(mln shares) 818 800 975 831 899 Nasdaq 2,511.92 40.19 1.6
Value (RM S&P 500 1,206.78 15.42 1.3
mln) 943 936 1,195 1,118 988 FTSE 5,617.84 31.23 0.6
Hang Seng 20,778.92 -170.48 -0.8
Currency Jakarta Composite 2,926.86 23.54 0.8
MYR vs US Nikkei 225 10,924.79 Closed Closed
Dollar 3.1900 3.1810 3.1860 3.2160 3.1960 Seoul Composite 1,728.42 -5.49 -0.3
Shanghai Composite 2,868.43 -31.90 -1.1
Source: RHBInvest & Bloomberg SET 753.2 3.71 0.5
FT Straits Times 2,959.01 26.97 0.9
Taiwan Weighted 8,054.05 -27.50 -0.3
India Sensex 17,503.47 123.39 0.7
Major Commodities
NYMEX Crude Oil
(US$/barrel) 85.17 1.95 2.3
MDEX CPO – Third
Month (RM/metric ton) 2,531.00 -16.00 -0.6
US Interest Rate Current Last Updated
Overnight Fed Fund 27-28 Apr
0-0.25% Unch
Rate 2010
Next FOMC meeting 22-23 June 2010

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 30 April 2010

Chart 3: FKLI Daily Chart 4: FKLI Intraday

Technical Interpretations:

♦ Following a two-day sharp pullback, the FKLI bounced back yesterday on fresh bargain-hunting activities amid an
overnight rebound in the US markets and positive performance in the early European markets on Thursday.

♦ For the day, the FKLI for Apr contract added 5.50 pts or 0.41% to 1,333.50, while the May contract gained 6.00
pts or 0.45% to 1,334.50.

♦ Chart wise, the FKLI formed a small negative candle, indicating a possible pause on yesterday’s recovery.

♦ Plus the mixed short-term momentum signals and its inability to cross over the 10-day SMA of 1,335, the odds
are still high for the futures market to resume its selling activities today.

♦ Upon the reemergence of selling activities, a retest of the 40-day SMA near 1,326 is almost imminent.

♦ In fact, losing the 40-day SMA will trigger a sharper correction towards the next critical support at 1,300.

♦ To regain a positive short-term outlook from the current position, a swift and strong removal of the 10-day SMA
and a closure of a tiny technical gap near 1,337 is therefore, critical.

♦ Only then, can the futures index plot a convincing technical rebound to the previous high of 1,350.5, in our view.

Daily Trading Strategy:

♦ Despite a mild rebound, the FKLI remains shy of the 10-day SMA of 1,335 yesterday.

♦ Given the poor technical readings, the futures market stays on a downside bias.

♦ Immediate chart support is at the 40-day SMA of 1,326, while a lower level is at 1,300.

♦ Meantime, the futures index is expected to be rangebound between 1,329 and 1,335 today.

Table 3: FKLI Closings

FKLI (Month)
Contracts Open High Low Close Chg (Pts) Settle Volume Open Interest
Apr 10 1333.00 1334.50 1331.00 1333.50 5.50 1333.50 3130 10048
May 10 1335.00 1335.50 1331.50 1334.50 6.00 1334.50 3909 14647
Jun 10 1331.50 1334.50 1330.50 1333.00 6.00 1333.50 92 527
Sep 10 1331.00 1332.50 1331.00 1332.00 5.50 1333.00 8 244

Source: Bursa Malaysia

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 30 April 2010

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

US Market Leads:

♦ Wall Street extended its rebound momentum on Thursday, boosted by some upbeat quarterly earnings and
encouraging economic data.

♦ Motorola and Aetna Inc’s shares rose 3.5% and 2.4% respectively after their earnings exceeded market
expectations. On the economic front, data showed manufacturing activity in the Federal Reserve Bank of Kansas
City district expanded in Apr, while employment reading reached a more than 2-year high.

♦ Also, more certainty on Greece’s bailout story and the US financial reform passage reattracted follow-through
bargain-hunting support.

♦ Germany’s three main opposition leaders agreed to fast-track Euro8.4bn aid, lifting hopes that Greece is closer to
secure a bailout package. Separately, the US Senate opened debate on the financial overhaul legislation, with
possibility of amendments which could drastically alter bill if successful.

♦ Meanwhile, the US light sweet crude oil futures for June delivery jumped US$1.95 or 2.3% to US$85.17/barrel.

Technical Interpretations:

Dow Jones Industrial Average (DJIA)

♦ Led by follow-through buying momentum, the US DJIA extended its recovery leg from the 21-day SMA of 11,040,
soaring 122.05 pts or 1.10% to 11,167.32 on Thursday.

♦ By forming a huge bullish candle, we can expect further gains in sessions ahead.

♦ But until it can fully reclaim the 11,250 tough barrier and the recent high of 11,258.01, we believe it is likely to
consolidate within the current range of 10,850 to 11,250 in the near term.

♦ A firm immediate support can be expected at the 21-day SMA, next is 10,850.

Nasdaq Composite (Nasdaq)

♦ The Nasdaq Composite Index bounced back strongly by 40.19 pts or 1.63% to end at 2,511.92 yesterday.

♦ As it finished the day with a huge bullish candle, this could point to an extended rebound ahead.

♦ However, given the mixed momentum readings, recovery attempt is likely to be limited by the recent high of
2,535.28.

♦ The immediate support is at the 21-day SMA, which is near the support of 2,470.

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

Perisai Petroleum Teknologi (0047)

Poised for further retreat today…

♦ The share price of Perisai reversed its downtrend after congesting around RM0.465 level in Mar and Apr 2010.

♦ The stock launched a successful rally and penetrated the tough Downtrend Resistance Line (DRL) near RM0.55
level, before removing the RM0.57 technical hurdle to confirm breaking out from the major downtrend that
started since Jun 2009.

♦ The stock struggled around the RM0.61 region, prior to a final push to a high of RM0.69 on 22 Apr.

♦ However, after reaching the 10-month high, strong profit-taking activities stormed in and caused a steep plunge
on the share price.

♦ It lost the 10-day SMA near RM0.632 and fell below the RM0.61 level yesterday, with another huge bearish
candle on the chart, its fourth bearish candle in the last five trading days.

♦ Given the down-tick readings on the momentum indicators, plus the bearish candlestick pattern recently, the
stock is poised to retreat further today.

♦ Next support is seen at RM0.57, followed by the DRL resistance-turn-support level near RM0.54.

♦ Losing these levels will lead to a revisit of the RM0.52 level, also near the 40-day SMA. Further downside from
there will confirm that the stock has moved back into a major downtrend.

Technical Readings:

♦ 10-day SMA: RM0.632

♦ 40-day SMA: RM0.52

♦ Support: IS = RM0.57 S1 = RM0.52 S2 = RM0.465

♦ Resistance: IR = RM0.61 R1 = RM0.65

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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
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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
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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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