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

28 June 2010
MARKET DATELINE

Market Technical Reading

Lukewarm Trading Sentiment To Prevail...

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

Local Market Leads:

♦ Share prices in Bursa Malaysia closed marginally positive despite poor regional market performance on Friday
following an overnight fall in Wall Street.

♦ The benchmark FBM KLCI inched up 0.58 pts or 0.04% to 1,326.45 on Friday. However, discounting the last
minute push-up on selective core heavyweights, the index was wondering aimlessly throughout the day in the
negative territory.

♦ With the absence of interesting trading leads, investors preferred to stay sideline ahead of the weekend.

♦ On the regional markets, Nikkei 225 fell 1.92% and HSI lost 0.21%, while neighbouring FTSTI ended similarly
with Bursa Malaysia, with a marginal gain of 0.04%.

♦ Overall turnover tumbled again to 568m shares from Thursday’s 749m shares. Market breadth stayed negative
with 370 losers against 251 gainers.

Technical Interpretations:

♦ Although the FBM KLCI opened lower on Friday, it managed to close with a small positive candle on the chart.

♦ Added with a fresh cut of the 10-day SMA to above the 40-day SMA near 1,312, the FBM KLCI may attract some
bargain-hunting activities in the short term.

♦ However, in view of the poor momentum readings, and with the poor market turnover of late, its upside potential
is likely to be limited, in our opinion.

♦ As such, the downside risk remains high, as the index could fall again to revisit the 10-day and 40-day SMAs near
1,316 and 1,310, should the selling resume. A crucial support is at the psychological level at 1,300.

Please read important disclosures at the end of this report.

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Daily Trading Strategy:

♦ Technically, although the FBM KLCI managed to record a positive candle on Friday and it suggests a possible
quick technical rebound today, we are keeping our cautious view on the market, due mainly to the poor
momentum readings and the pathetic trading volume in recent sessions.

♦ Any fresh selling momentum in the early part of this week will threaten the supportive 10-day and 40-day SMAs
near 1,316 and 1,310.

♦ That, if it happens, will put pressure on the key psychological support at 1,300, for it is a support that uphold the
short- to medium-term trading sentiment. Losing 1,300 will refresh the bearish sentiment on the market.

♦ Due to the lack of interesting trading leads regionally, investors are not expected to make any aggressive move
in the near term.

♦ As a result, we see the lukewarm trading sentiment to prevail this week.

Table 2 : Major Indices & Commodities

Table 1 : Daily Statistics Change Change
Scoreboard 21 June 22 June 23 June 24 June 25 June Local Key Indices Closing
(Pts) (%)
Gainers 591 226 360 318 251 FBM KLCI 1,326.45 0.58 0.0
Losers 161 434 275 332 370 FBM 100 8,727.76 -1.13 0.0
Unchanged 208 255 271 294 278 FBM ACE 3,866.90 -45.14 -1.2
Untraded 401 446 456 418 463 Major Overseas
Indices
Market Cap Dow Jones 10,143.81 -8.99 -0.1
Turnover Nasdaq 2,223.48 6.06 0.3
(mln shares) 921 673 685 749 568 S&P 500 1,076.76 3.07 0.3
Value (RM FTSE 5,046.47 -53.76 -1.1
mln) 1,515 1,100 1,118 1077 923 Hang Seng 20,690.79 -42.70 -0.2
Jakarta Composite 2,947.02 32.93 1.1
Currency Nikkei 225 9,737.48 -190.86 -1.9
MYR vs US Seoul Composite 1,729.84 -10.03 -0.6
Dollar 3.1965 3.1990 3.2335 3.2310 3.2430 Shanghai Composite 2,552.82 -13.92 -0.5
SET 793.67 0.48 0.1
Source: RHBInvest & Bloomberg FT Straits Times 2,851.64 4.03 0.1
Taiwan Weighted 7,474.71 -115.18 -1.5
India Sensex 17,574.53 -155.71 -0.9
Major Commodities
NYMEX Crude Oil
(US$/barrel) 78.62 2.11 2.8
MDEX CPO – Third
Month (RM/metric ton) 2,384.00 -6.00 -0.3
US Interest Rate Current Last Updated
22-23 Jun
Overnight Fed Fund Rate 0-0.25% Unch
2010
Next FOMC meeting 10 Aug 2010

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Chart 3: FKLI Daily Chart 4: FKLI Intraday

Technical Interpretations:

♦ The local futures market opened Friday’s trading with a dip, but steady bargain-hunting support lifted the futures
index higher towards the close.

♦ The FKLI for Jun contract ended 3.5 pts or 0.26% higher to 1,325.0, and recorded a positive candle on the chart.

♦ Chart wise, the FKLI has covered the technical gap created on last Monday, as it rebounded from the 10-day SMA
1,319.

♦ Potentially, the upward momentum may return on the back of the support level at the 10-day SMA.

♦ However, given the poor momentum readings on the indicators, upside, if any, would be limited, in our view.

♦ To regenerate the bullish sentiment, it must first remove the recent high of 1,342, before it can remove May’s
high of 1,352.5.

♦ On the other hand, should buying fail to return strongly, a further fall will lose the 10-day SMA and threaten the
40-day SMA of 1,309, and the psychological level of 1,300.

♦ Lower support is at 1,270, followed by May’s low of 1,240.5.

Daily Trading Strategy:

♦ The immediate-term outlook for the FKLI remains uncertain.

♦ Traders should remain cautious on the possibility of a return of selling momentum. Upside potential is expected to
be limited due to the poor short-term momentum readings.

♦ For today, we expect the futures index to trend within 1,310 to 1,328.

Table 3: FKLI Closings

FKLI (Month)
Contracts Open High Low Close Chg (Pts) Settle Volume Open Interest
Jun 10 1318.00 1326.50 1315.50 1325.00 3.50 1325.00 9490 16443
Jul 10 1317.50 1327.00 1316.50 1325.50 6.50 1325.50 5832 2483
Sep 10 1315.50 1326.50 1315.50 1325.50 4.00 1325.50 86 518
Dec 10 1315.00 1326.00 1315.00 1326.00 5.00 1325.50 35 196

Source: Bursa Malaysia

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

US Market Leads:

♦ US markets closed flat on Friday, ending the week with a marginally positive closing on Friday on its three major
indices, DJIA, Nasdaq and S&P 500.

♦ Earlier, investors stormed into financial stocks, as lawmakers in the House and Senate finalised negotiations on
the major reform bill for the financial industry proved to be less restrictive than earlier thought.

♦ However, as the session wore on, gains spread out as the markets turned mixed after it was announced that the
1Q GDP grew at a slower pace at 2.7% annualised rate versus the previously reported 3%. Wall Street had
expected a hold at 3%.

♦ Meanwhile, the University of Michigan’s final consumer sentiment index for Jun was revised up to 76 from 75.5,
as compared to the economists’ forecast of a flat figure.

♦ The US light sweet crude oil futures for August delivery rose US$2.11 to US$78.62/barrel in the Nymex.

Technical Interpretations:

Dow Jones Industrial Average (DJIA)

♦ The US DJIA recorded a “doji” candle, indicating indecisiveness on its next move, after closing marginally to
below the 10,150 critical support level on Friday.

♦ But, the index finished at below the supportive 21-day SMA of 10,196. A close at below the 21-day SMA generally
suggests a negative trend ahead.

♦ Technically, with a “doji” candle, it holds a very slim chance for a technical rebound. If the buyers fail to return
soon, it will head towards the psychological level at 10,000.

♦ That, if it occurs, will threaten a steeper fall towards the 9,200 – 9,700 lower support region.

Nasdaq Composite (Nasdaq)

♦ The Nasdaq Composite index ended last Friday at 2,223.48, added 6.06 pts or 0.27%, but registered a “doji”
candle on the chart.

♦ This candlestick pattern, added with a fall to below the 21-day SMA, is pointing to a negative trend ahead.

♦ If it fails to launch any technical rebound this week, it may lose the 2,190 key support level soon.

♦ Next key support is only seen at 2,000 and 2,100.

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Daily Technical Watch:

Chart 7: BJCorp Daily Chart 8: BJCorp Intraday

Berjaya Corporation (3395)

Losing RM1.33 will confirm an uptrend derailment…

♦ Since late Mar 2009, the share price of BjCorp has been trending along the Uptrend Line (UTL).

♦ After surviving at above the UTL for the second time in early Feb 2010, the stock launched a powerful rally from
the UTL near RM1.20 – RM1.33 level to a high of RM1.87 in Apr 2010.

♦ However, after hitting the high, the stock reversed its upward momentum and began a profit-taking downswing.

♦ It fell below to the RM1.78 key support level and triggered a bearish consolidation phase.

♦ The stock fell convincingly to below the RM1.55 level in May, and slipped off the supportive UTL near RM1.42 in
early early Jun.

♦ Thereafter, it has been trading near to the UTL and has failed to cross over the hurdle successfully.

♦ Following a “shooting star” candle registered on last Thursday at the high of RM1.51, on the dot of the 40-day
SMA, the stock recorded a bearish candle on the chart on Friday.

♦ The candle pattern suggests a bearish trend ahead. Not only that, the close at RM1.41 was below the 10-day SMA
of RM1.42. This points to a short-term negative trend ahead.

♦ Coupled with the weak momentum readings, we expect it to retest the RM1.33 level soon. Losing RM1.33 will
confirm the uptrend derailment and mark the beginning of a bearish trend.

Technical Readings:

♦ 10-day SMA: RM1.421

♦ 40-day SMA: RM1.504

♦ Support: IS = RM1.33 S1 = RM1.20 S2 = RM1.06

♦ Resistance: IR = RM1.55 R1 = RM1.78

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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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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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“Connected Persons” means any holding company of RHBRI, the subsidiaries and subsidiary undertaking of such a holding company and the respective directors,
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services from the companies in which the securities have been discussed/covered by RHBRI in this report or in RHBRI’s previous reports.

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.

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actions of third parties in this respect.

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