PP 7767/09/2010(025354)

RHB Research

Malaysia
Technical Research Institute Sdn Bhd
A member of the
8 RHB Banking Group
Company No: 233327 -M

Dail y Trad ing St rat eg y

MARKET DATELINE
27 August 2010

Market Technical Reading

Further Confirmation Needed To Resume Upside Momentum…

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

Local Market Leads:

♦ The local bourse made a strong comeback by hitting a fresh year high on Thursday, aided by a strong recovery in
the overnight US markets as well as a rebound in the regional markets.

♦ And as investors continued to chase up the core heavyweights, like Sime (+12sen), Maybank (+9sen) and IOICorp
(+9sen), the FBM KLCI surged 11.03 pts or 0.79% to 1,408.00 for the day.

♦ But overall market sentiment appeared sluggish, as reflected in the lower daily trading volume and the lack of
trading leads for the broader market.

♦ Elsewhere, Asian markets took advantage on the overnight positive reversal in the US markets by kicking off a
mild recovery move. Also, due to the same reason, the European markets opened sharply higher yesterday.

♦ There were only 685m shares transacted throughout the day compared to 873m shares recorded a day earlier.
Market breadth turned positive for the first time in five trading days with 353 advancers against 333 decliners.

Technical Interpretations:

♦ Surprisingly, the FBM KLCI launched a timely rebound to above the 1,400 psychological level yesterday with a
bullish candle to imply a possible resumption of its bullish uptrend in the near term.

♦ But due to weaker daily trading volume and mixed momentum readings, further confirmation is needed to
determine the short-term direction of the FBM KLCI.

♦ In our view, it must acquire another positive candle today to restore its upswing momentum towards the next
upside target of 1,450.

♦ That if it occurs, will undo the potential of triggering a short-term correction on the previous uptrend.

♦ For now, the 10-day SMA near the 1,390 technical level will remain as the key support for the index.

Please read important disclosures at the end of this report.

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Daily Trading Strategy:

♦ Yesterday’s sudden reversal caught us by surprise as it has reduced the possibility of triggering a technical
correction on the short-term uptrend of the FBM KLCI.

♦ With the huge positive candle registered on the board plus a record of a fresh 30-month high for the index suggest
a possible resumption of its previous bullish momentum.

♦ However, given the mixed momentum readings and the poorer daily turnover (below 800m – 1.0bn shares mark),
we prefer to wait for more signs of confirmation signals today before jumping on the bandwagon for an extended
rally on the FBM KLCI in sessions ahead. The next upside target is at 1,450.

♦ Should the selling resume today, forcing the index to fall to below 1,400 again, it will restore the corrective mode
and press the index to the short-term correction trigger point near 1,390 and the 10-day SMA again.

♦ Further support is seen at 1,350, near the 40-day SMA of 1,354.

♦ In our view, investors are likely to wait for the second reading of the US 2Q GDP and a key speech by the Federal
Reserve chairman Ben Bernanke tonight, before deciding their next course of action next week.

Table 2 : Major Indices & Commodities

Table 1 : Daily Statistics Change Change
Scoreboard 20 Aug 23 Aug 24 Aug 25 Aug 26 Aug Local Key Indices Closing
(Pts) (%)
Gainers 316 291 206 186 353 FBM KLCI 1,408.00 11.03 0.8
Losers 394 465 585 585 333 FBM 100 9,198.88 61.62 0.7
Unchanged 327 270 241 268 294 FBM ACE 3,741.09 2.39 0.1
Untraded 334 345 335 328 385 Major Overseas
Indices
Market Cap Dow Jones 9,985.81 -74.25 -0.7
Turnover Nasdaq 2,118.69 -22.85 -1.1
(mln shares) 834 805 894 873 685 S&P 500 1,047.22 -8.11 -0.8
Value (RM FTSE 5,155.84 46.44 0.9
mln) 1,341 1,338 1,651 1,732 1,292 Hang Seng 20,612.06 -22.92 -0.1
Jakarta Composite 3,145.14 6.23 0.2
Currency Nikkei 225 8,906.48 61.09 0.7
MYR vs US Seoul Composite 1,729.76 -5.03 -0.3
Dollar 3.1360 3.1310 3.1435 3.1393 3.1410 Shanghai Composite 2,603.48 6.90 0.3
SET 886.1 1.59 0.2
Source: RHBInvest & Bloomberg Straits Times 2,925.87 -0.68 0.0
Taiwan Weighted 7,689.74 -47.24 -0.6
India Sensex 18,226.35 46.71 0.3
Major Commodities
NYMEX Crude Oil
(US$/barrel) 73.36 0.84 1.2
MDEX CPO – Third
Month (RM/metric ton) 2,530.00 44.00 1.8
US Interest Rate Current Last Updated
10 Aug
Overnight Fed Fund Rate 0-0.25% Unch
2010
Next FOMC meeting 21 Sep 2010

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Chart 3: FKLI Daily Chart 4: FKLI Intraday

Technical Interpretations:

♦ Boosted by the strong afternoon push-up in the cash market as well as the improved regional sentiment, the FKLI
unexpectedly resumed its bullish momentum and scaled to a fresh year high yesterday.

♦ The futures index reversed from a sluggish opening, and moved onto a recovery path after taking leads from the
cash market and a strong opening in the European markets.

♦ At day end, the FKLI for Aug contract soared 16.00 pts or 1.15% to settle at the day’s high of 1,409.50. The Sep
contract also rallied and chalked up 19.00 pts or 1.37% to 1,409.50.

♦ Sealed with a bullish candle at its highest point in 30 months, the chart is suggesting a potential resumption of the
recent bullish sentiment soon.

♦ However, due to the mixed signal in the short-term momentum readings, a further confirmation is needed before
we will turn to a bullish short-term view on the FKLI.

♦ The next upside target is pegged at 1,450.

♦ Just like the cash market, the immediate support is now seen at 1,400, followed by the 1,390 support level and
the 10-day SMA of 1,388.

Daily Trading Strategy:

♦ The FKLI surprised the market with a strong recovery, pointing to a possible new rally ahead.

♦ Nevertheless, traders should wait for a further confirmation before turning bullish again.

♦ As such, the FKLI is projected to swing from 1,397 to 1,414 today.

Table 3: FKLI Closings

FKLI (Month)
Contracts Open High Low Close Chg (Pts) Settle Volume Open Interest
Aug 10 1394.00 1409.50 1392.00 1409.50 16.00 1409.50 10273 16740
Sep 10 1391.50 1409.50 1391.50 1409.50 19.00 1409.50 9430 5823
Dec 10 1392.00 1408.00 1391.50 1408.00 16.50 1408.00 176 405
Mar 11 1394.50 1407.50 1394.50 1407.50 15.00 1408.00 46 199

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:

♦ The US DJIA overturned the early gain by breaching below the 10,000 psychological level for the first time since
Jul 6, as investors turned cautious after a dismal manufacturing data, and ahead of the revised reading in the 2Q
GDP and a key speech by the Federal Reserve chairman Ben Bernanke on Friday.

♦ Initially, investors responded positively to the bigger-than-expected decline in the weekly jobless claims. The
Labor Department said claims for first-time unemployment benefits dropped by 31,000 to 473,000 last week.

♦ But the rebound stalled after Federal Reserve Bank of Kansas City said the index of manufacturing activity fell to
zero in Aug from 14 in Jul.

♦ Also, the release of the revised 2Q GDP number as well as an important speech on the US economic outlook by
Ben Bernanke in the Federal Reserve’s annual meeting on Friday prompted investors to turn cautious. Economists
are expecting the GDP to be revised downward to 1.4%, down from the previous estimate of 2.4%.

♦ US light sweet crude oil futures for Oct delivery gained another 84 cents or 1.2% to US$73.36/barrel.

Technical Interpretations:

Dow Jones Industrial Average (DJIA)

♦ Not only the US DJIA failed to extend its recovery, it even broke below the 10,000 psychological level last night
and tumbled another 74.25 pts or 0.74% to 9,985.81.

♦ On the chart, the index ended with a bearish candle to suggest a continuation pattern of the correction leg likely.

♦ In other words, if it stays below 10,000 it is vulnerable to further downside correction towards the next support
level at 9,700 and the Jul low of 9,614.32.

♦ Losing these levels will mark a major breakdown on the technical outlook. Resistance is at 10,000 and 10,150.

Nasdaq Composite (Nasdaq)

♦ In the absence of follow-through buying support, the Nasdaq Composite index reversed its early rebound and
ended down 22.85 pts or 1.07% to 2,118.69 on Thursday.

♦ Closed with a huge bearish candle, it appears that the risk of it correcting further towards the 2,100 level and
Jul’s low of 2,061.14 has returned.

♦ Meanwhile, its resistances are still seen at the recent technical gap near 2,159.44 and the 2,190 hurdle.

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Daily Technical Watch:

Chart 7: BjCorp Daily Chart 8: BjCorp Intraday

Berjaya Corporation (3395)

Selling pressure expected to continue in the near term…

♦ The share price of BjCorp kicked off a steep rally from RM0.50 region in Apr 2009 and surpassed RM0.75 level to
reach a consolidation region near RM0.88 from Jun – Oct 2009.

♦ The stock penetrated the RM1.06 level and climbed higher in Nov, and the upward momentum intensified when it
surpassed RM1.33 in Mar 2010.

♦ However, after tipping a high of RM1.80 in Apr, the stock succumbed to heavy profit-taking activities, and fell into
a bearish downtrend.

♦ The stock lost the important support level of RM1.33 in late Jun and continued to head lower on persistent selling
pressure. It closed yesterday at RM0.99 with another bearish candle.

♦ The negative candle pattern and the loss of the RM1.00 psychological level yesterday, plus a failure to garner the
RM1.06 level in recent rebound suggest that it is still on the downtrend.

♦ Although the momentum indicators dipped slightly into the “oversold” region, selling pressure is expected to
continue in the near term.

♦ In our view, if the stock fails to recapture the RM1.00 psychological level and RM1.06 in the immediate term, it
will spell more downside pressure towards the lower support level of RM0.75 – RM0.88 region.

♦ On the other hand, a surprise technical rebound upon the removal of RM1.06 and the 40-day SMA near RM1.10
will see the stock meeting a tough support-turn-resistance level at RM1.33.

Technical Readings:

♦ 10-day SMA: RM1.0265

♦ 40-day SMA: RM1.0964

♦ Support: IS = RM0.88 S1 = RM0.75 S2 = RM0.50

♦ Resistance: IR = RM1.06 R1 = RM1.20 R2 = RM1.33

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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
any liability for any loss or damage arising out of the use of all or any part of this report.

RHBRI and the Connected Persons (the “RHB Group”) are engaged in securities trading, securities brokerage, banking and financing activities as well as providing
investment banking and financial advisory services. In the ordinary course of its trading, brokerage, banking and financing activities, any member of the RHB
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
securities or loans of any company that may be involved in this transaction.

“Connected Persons” means any holding company of RHBRI, the subsidiaries and subsidiary undertaking of such a holding company and the respective directors,
officers, employees and agents of each of them. Investors should assume that the “Connected Persons” are seeking or will seek investment banking or other
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.

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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