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 March 2010
MARKET DATELINE

Market Technical Reading

Trading Sentiment To Remain Upbeat...

Chart 1: KLCI Daily Chart 2: KLCI Intraday

Local Market Leads:

♦ Share prices in Bursa Malaysia closed broadly higher on Monday, as institutional investors snapped up timber
stocks, while retailers returned for a quick buck on the speculative lower liners.

♦ The benchmark FBM KLCI gained 4.07 pts or 0.31% to 1,319.21, amid optimism on the Invest Malaysia
conference today, especially when the Prime Minister Najib Razak is expected to unveil the country’s New
Economic Model (NEM).

♦ Amongst the top gainers, Lingui (+31sen), Subur (+22sen) and JTiasa (+19sen) gained on steady institutional
buying, while TimeCom (+1.5sen), Oilcorp (+5sen) and UEMLand (+6sen) attracted retailers on speculative
interests.

♦ Regional markets closed mildly positive, thanks to gains in last Friday’s US markets performances.

♦ Daily turnover eased slightly to 1.14bn shares, from Friday’s 1,25bn shares. Market breadth stayed positive, with
472 gainers versus 308 losers.

Technical Interpretations:

♦ The benchmark FBM KLCI registered another bullish candle yesterday, suggesting yet another day of follow-
through buying momentum ahead.

♦ As the 14-day RSI approached nearer to the “overbought” region, the stochastic oscillators have closed nearer to
the “extremely overbought” region. This indicates room for further upside towards 1,334.34.

♦ Moreover, the 10-day SMA has climbed higher to 1,305, from the recent low. This suggests a possible
acceleration of upside moemtnum in the near term.

♦ Its immediate- and medium-term outlook remains bullish with a medium-term upside target set at 1,390.

Please read important disclosures at the end of this report.

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 30 March 2010

Daily Trading Strategy:

♦ With the recent positive development on the technical layout, the FBM KLCI has confirmed its breakout of the
previous heavy resistance zone at 1,250 – 1,300 region.

♦ Technically, the breakout carries a medium-term target of 1,390.

♦ But, for a nearer-term chart outlook, the index may head towards the previous high of 1,334.34, before showing
additional signs of a potential follow-through rally.

♦ Given the improvement in sentiment due to today’s Invest Malaysia conference, to be officially open by PM Najib
Tun Razak, trading appetite is expected to stay buoyant in the near term.

♦ If the daily trading volume can be maintained at around 1.2bn shares, trading sentiment should remain upbeat.

♦ All said, the index must stay at above the 10-day SMA of 1,305 and the psychological support level of 1,300, to
avoid a sudden reversal in technical outlook.

Table 2 : Major Indices & Commodities

Table 1 : Daily Statistics Change Change
Scoreboard 23 Mar 24 Mar 25 Mar 26 Mar 29 Mar Local Key Indices Closing
(Pts) (%)
Gainers 447 453 461 517 472 FBM KLCI 1,319.21 4.07 0.3
Losers 253 255 303 238 308 FBM 100 8,675.13 30.49 0.4
Unchanged 278 295 247 261 239 FBM ACE 4,276.40 63.90 1.5
Untraded 371 346 336 330 327
Major Overseas
Market Cap Indices
Turnover Dow Jones 10,895.86 45.50 0.4
(mln shares) 908 1,136 1,244 1,251 1,139 Nasdaq 2,404.36 9.23 0.4
Value (RM S&P 500 1,173.22 6.63 0.6
mln) 1,488 1,689 1,846 1,706 1,499 FTSE 5,710.66 7.64 0.1
Hang Seng 21,237.43 184.32 0.9
Currency Jakarta Composite 2,794.77 -18.31 -0.7
MYR vs US Nikkei 225 10,986.47 -9.90 -0.1
Dollar 3.3170 3.3155 3.3180 3.3050 3.2700 Seoul Composite 1,691.99 -5.73 -0.3
Shanghai Composite 3,123.80 64.08 2.1
Source: RHBInvest & Bloomberg SET 771.4 -7.46 -1.0
FT Straits Times 2,929.14 22.86 0.8
Taiwan Weighted 7,947.45 70.59 0.9
India Sensex 17,711.35 66.59 0.4
Major Commodities
NYMEX Crude Oil
(US$/barrel) 82.17 2.17 2.7
MDEX CPO – Third
Month (RM/metric ton) 2,520.00 -14.00 -0.6
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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 30 March 2010

Chart 3: FKLI Daily Chart 4: FKLI Intraday

Technical Interpretations:

♦ Thanks to the follow-through buying momentum, the local futures index managed to climb higher in early
session, before settling sideways for the rest of the day, on cautious performance in the regional markets.

♦ The FKLI for Mar contract ended higher on Monday with 3.5pts gain or 0.26% to 1,324.5 with a 5-pt premium
over the cash index. The Apr contract gained 4.5pts or 0.34% to 1,327.00, with a larger premium over the cash
index.

♦ Despite the cautious trading throughout the day, the stochastic oscillators have trended deeper into the
“extremely overbought” region, indicating a stretched situation on the current uptrend.

♦ But, given the healthy volume participation and the positive candlestick pattern, the futures index is poised to
retest the recent high of 1,337 soon, in our view.

♦ Beyond that level is a huge technical gap near 1,314 – 1,348 to be covered by the futures index’s current rally.

♦ On the downside, a buffer can be expected near the 10-day SMA of 1,309 and the psychological level of 1,300.

♦ Lower support can be seen near the 40-day SMA of 1,283.

Daily Trading Strategy:

♦ Traders should keep their “long” position, for an immediate breakout of the 1,337 high. Further upside target is
at the gap near 1,348, and the solid chart target of 1,390.

♦ Cut loss only if the FKLI dips to below the 10-day SMA and 1,300.

♦ Today, we expect the FKLI to range from 1,320 to 1,337.

Table 3: FKLI Closings

FKLI (Month)
Contracts Open High Low Close Chg (Pts) Settle Volume Open Interest
Mar 10 1319.50 1326.00 1319.00 1324.50 3.50 1324.50 10335 18749
Apr 10 1321.50 1326.50 1320.50 1327.00 4.50 1327.00 9692 7659
Jun 10 1320.00 1324.00 1318.00 1324.00 3.50 1324.50 287 516
Sep 10 1319.00 1322.50 1318.50 1322.00 3.00 1323.00 46 196

Source: Bursa Malaysia

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 30 March 2010

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

US Market Leads:

♦ Wall Street finished higher for the third day on Tuesday, as manufacturing and commodity-related stocks were
boosted by positive US economic reports and a softer US dollar.

♦ The Federal Reserve Bank of Dallas said Texas factory activity expanded for the fifth month in Mar, while its
production index rose to its highest level in 2 years. This in turn, buoyed industrial stocks like Caterpillar (+1.7%)
and Alcoa (+1.2%).

♦ Separately, the US Commerce Department said personal spending was up 0.3% in Feb, its fifth month in a row.

♦ Other than that, commodity-related stocks, Exxon Mobil (+1.1%) and Chevron (+1.1%) climbed higher after a
strong rebound in crude oil prices amid a weaker US dollar. The US light sweet crude oil futures for May delivery
shot up US$2.17 or 2.7% to US$82.17/barrel.

Technical Interpretations:

Dow Jones Industrial Average (DJIA)

♦ On Monday, the US DJIA rose 45.50 pts or 0.42% to a fresh year closing high at 10,895.86, as it renewed its
bullish momentum to above the important technical level of 10,850.

♦ With a positive candle on the chart, further near-term gain can be expected after the recent struggle near the
10,850 region.

♦ But in our view, unless the Dow can penetrate the recent peak of 10,955.48 to extend its bullish momentum
towards the next resistance target at 11,250, the mixed momentum readings could still cap the index’s upside.

♦ On the downside, the immediate support has been revised to 10,850, followed by the 21-day SMA of 10,656.

Nasdaq Composite (Nasdaq)

♦ The Nasdaq Composite Index reversed last Friday’s decline and ended up by 9.23 pts or 0.39% to 2,404.36.

♦ Chart wise, the formation of a “doji” candle indicates uncertainty ahead.

♦ Plus the mixed readings on the short-term momentum indicators, a resumption of selling momentum towards the
21-day SMA near 2,358 and the resistance-turn-support level of 2,330 is still possible.

♦ To restore its bullish momentum and to head higher towards the technical hurdle at 2,470, in our view, the index
must remove last week’s high at 2,432.25 soon.

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

WTK Holdings (4243)

Fresh breakout of the 9-month old sideways trend…

♦ The share price of WTK recovered from its all-time low of RM0.70 in Dec 2008, but traded closely to the RM0.71
support level until Apr 2009, when the 10-day SMA cut above the 40-day SMA to trigger a medium-term bullish
signal.

♦ The stock rallied higher since then, along an uptrend and reached a high of RM1.53 in Jun 2009.

♦ However, as it failed to sustain at above the RM1.34 level, it retreated and trended sideways at between RM1.34
and RM1.09 region for many months.

♦ Only in Feb 2010, it regained its upward momentum and rebounded from the RM1.09 support region, before
eventually breaking out from the RM1.34 level yesterday.

♦ With a strong daily trading volume, the stock pierced through RM1.34 with a huge bullish candle on the chart
yesterday, indicating a fresh breakout of the 9-month old sideways trend.

♦ Although both the momentum indicators are trading in the “overbought” region, further upside is still possible if it
sustains at above the RM1.34 level.

♦ Overhead resistance is seen at RM1.53, followed by the tougher hurdle at RM1.71.

♦ Immediate support region can be seen near the 10-day and 40-day SMAs at RM1.16 and RM1.20, and a
stronghold is at RM1.09.

Technical Readings:

♦ 10-day SMA: RM1.204

♦ 40-day SMA: RM1.158

♦ Support: IS = RM1.34 S1 = RM1.09 S2 = RM0.71

♦ Resistance: IR = RM1.71 R1 = RM2.08 R2 = RM2.48

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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
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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
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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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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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