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

27 April 2010
MARKET DATELINE

Market Technical Reading

Sustainability Of This Recovery Remains Questionable...

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

Local Market Leads:

♦ The local market staged a mild rebound on Monday, as bargain-hunting support picked up in the afternoon
session following Asian markets’ positive closing and a rally in European markets amid easing concerns on
Greece’s debt problem.

♦ Regional investors scooped up stocks on the view that Greece's activation of EU-IMF bailout plan on last Friday
would shrug off near-term worries of a possible serious debt default by the country. Also, another rally on the US
DJIA on last Friday, to a fresh 19-month high aided spice to the trading sentiment.

♦ Nikkei 225 rallied the most by soaring 2.31%, followed by Taiwan Weighted (+1.91%) and Hang Seng (+1.61%).
In fact, investors also ignored news that China might introduce an annual property tax to cool down surging
prices in the property sector.

♦ Upon closing, the FBM KLCI was up 3.29 pts or 0.25% to 1,340.07, closer to its day high of 1,340.37.

♦ Despite that, the overall sentiment appeared dull with 800m shares transacted. Market breadth turned positive
with 362 gainers leading 306 losers for the day.

Technical Interpretations:

♦ Despite the intermittent profit-taking activities, the FBM KLCI gradually recovered from the 1,336.49 low and
headed higher in late session to close near the day’s high.

♦ Closed with a positive candle, it has acquired the much-needed confirmation candle for a technical rebound going
forward.

♦ Plus the upbeat momentum readings, it could gear up its rally towards the recent high of 1,347.61 soon.

♦ But technically, it must remove 1,347.61 with a healthy daily volume of between 1.0 – 1.2bn shares mark to
secure a sizeable technical rebound ahead, in our view.

♦ Otherwise, sellers will likely return sooner to threaten the 10-day and 40-day SMAs near 1,335 and 1,320.

Please read important disclosures at the end of this report.

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 27April 2010

Daily Trading Strategy:

♦ Technically, yesterday’s recovery with a positive candle and upbeat short-term momentum readings has
reinforced the view of a potential technical rebound ahead.

♦ If the buying support continues, the index will be poised to revisit the recent high of 1,347.61 soon.

♦ But due to the prevailing slow turnover of late, the sustainability of this recovery leg remains questionable.

♦ Therefore, without a convincing breakout of 1,347.61 and a strong increment of daily turnover to 1.0-1.2bn
shares mark, we are maintaining our cautious view on the local market direction.

♦ Further resistance is seen at 1,390, but the immediate supports are at the 10-day and 40-day SMAs near 1,335
and 1,320.

♦ Moreover, with a 2-day US FOMC meeting and the pending Senate vote on the US financial reforms this week,
most investors are likely to stay sideway, pending more clue of the near-term market direction, in our view.

Table 2 : Major Indices & Commodities

Table 1 : Daily Statistics Change Change
Scoreboard 20 Apr 21 Apr 22 Apr 23 Apr 26 Apr Local Key Indices Closing
(Pts) (%)
Gainers 456 399 333 305 362 FBM KLCI 1,340.07 3.29 0.2
Losers 230 288 307 352 306 FBM 100 8,824.07 19.01 0.2
Unchanged 293 300 324 333 306 FBM ACE 4,213.81 39.46 0.9
Untraded 384 376 398 369 384
Major Overseas
Market Cap Indices
Turnover Dow Jones 11,205.03 0.75 0.0
(mln shares) 797 875 834 818 800 Nasdaq 2,522.95 -7.20 -0.3
Value (RM S&P 500 1,212.05 -5.23 -0.4
mln) 1,218 1,293 1,190 943 936 FTSE 5,753.85 30.20 0.5
Hang Seng 21,587.06 342.57 1.6
Currency Jakarta Composite 2,944.71 19.98 0.7
MYR vs US Nikkei 225 11,165.79 251.33 2.3
Dollar 3.2045 3.1950 3.1955 3.1900 3.1810 Seoul Composite 1,752.20 15.17 0.9
Shanghai Composite 2,969.50 -14.04 -0.5
Source: RHBInvest & Bloomberg SET 764.34 9.76 1.3
FT Straits Times 3,002.62 14.13 0.5
Taiwan Weighted 8,158.14 153.25 1.9
India Sensex 17,745.28 51.08 0.3
Major Commodities
NYMEX Crude Oil
(US$/barrel) 84.20 -0.92 -1.1
MDEX CPO – Third
Month (RM/metric ton) 2,560.00 20.00 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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 27April 2010

Chart 3: FKLI Daily Chart 4: FKLI Intraday

Technical Interpretations:

♦ Taking leads from the regional rebounds, the FKLI turned higher on Monday on the back of fresh bargain-hunting
support.

♦ In spite of that, the FKLI’s gains were limited due to the lukewarm trading sentiment in the local cash market.

♦ At the close, the FKLI for Apr contract rose 3.00 pts or 0.22% to 1,343.00. Meanwhile, the May contract gained
4.00 pts or 0.30% to 1,343.50.

♦ Though the FKLI recovered mildly from the 10-day SMA of 1,337 yesterday, the formation of a potential
“hangman-like” candle has thwarted the positive recovery view in the near term.

♦ In other words, unless the futures index manages to collect another positive candle today, the risk of a fall to
retest its immediate support at the 10-day SMA has increased.

♦ As such, any rebound from the current level will unlikely to be as strong as earlier thought. The fear is in fact on
whether the futures index would lose the 10-day SMA soon.

♦ Lower supports are only near the technical gap of 1,326 and the 40-day SMA of 1,323.

♦ And, until the recent peak of 1,350.50 is surpassed, the current cautious sentiment will persist, in our view.

Daily Trading Strategy:

♦ Despite yesterday’s mild rebound, the FKLI’s upside potential remains unclear.

♦ In fact, the “hangman-like” candle suggests a pullback risk ahead.

♦ Given the current uncertainties on the technical front, traders are expected to stay cautious.

♦ Meanwhile, we expect the FKLI to trade from 1,337 to 1,346 today.

Table 3: FKLI Closings

FKLI (Month)
Contracts Open High Low Close Chg (Pts) Settle Volume Open Interest
Apr 10 1344.50 1345.50 1339.00 1343.00 3.00 1343.00 5382 18751
May 10 1344.50 1345.00 1339.00 1343.50 4.00 1343.50 3194 1883
Jun 10 1343.00 1344.00 1337.00 1342.00 4.00 1342.00 69 505
Sep 10 1342.00 1344.00 1336.50 1342.50 4.50 1342.00 16 227

Source: Bursa Malaysia

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 27April 2010

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

US Market Leads:

♦ US stocks gave up their early gain on Monday, led by the selling in banks on fears that the proposed reforms in
the financial sector would hurt the sector’s profit.

♦ This overshadowed the upbeat quarterly earnings and the stronger 2010 outlook from Caterpillar (+4.2%).

♦ Banks, including JP Morgan (-2.3%) and Bank of America (-2.1%) took a hit as the proposed legislation from
Senate Democrats containing new rules for derivatives market which would hurt bank revenue. Separately,
Citigroup shed 5.1% after the US Treasury said it would begin to sell part of its 27% stake in the bank.

♦ Meanwhile, the US light sweet crude oil futures for June delivery fell US$0.92 or 1.1% to US$84.20/barrel.

♦ After the close, US Senate Republicans successfully blocked debate on the Democrats’ bank reforms bill by a vote
of 41 – 57, the Democratics need to secure 60 votes to start a debate.

Technical Interpretations:

Dow Jones Industrial Average (DJIA)

♦ As a result, the US DJIA ended flat by inching up only 0.75 pt or 0.01% to 11,205.03, after retesting its
immediate resistance target of 11,250 with an intraday high of 11,258.01.

♦ With the profit-taking activities, this resulted in a formation of a “doji” candle, implying uncertainties ahead.

♦ If it fails to extend its gains today to remove 11,250 or yesterday’s high of 11,258.01, the odds are high that it
could suffer mild setback towards the immediate support at the 21-day SMA of 11,010 soon.

♦ On the other hand, breaking from 11,250 will lead to a rechallenge of the next barrier at 11,750.

Nasdaq Composite (Nasdaq)

♦ The Nasdaq Composite Index snapped the recent winning streak by dropping 7.20 pts or 0.28% to 2,522.95
yesterday.

♦ Ended with a “negative harami” candle, this shows the recent bullish momentum is faltering.

♦ It, therefore, could slip into a technical pullback soon, should a swift removal of yesterday’s high of 2,535.28 fail
to take place for a further rally towards 2,630, in our view.

♦ Strong supports are still pegged at the breakout point of 2,470 and the 21-day SMA near 2,458.

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

Measat Global (3875)

Poised to stage further run-down in the near term…

♦ The share price of Measat broke out from the congestion of RM1.76 – RM2.15 region in mid-Mar 2010, and rallied
steeply across the resistance levels of RM2.40 and RM3.00 in less than two weeks.

♦ The stock hit its first bump after touching RM3,47 intraday high, and retreated to a resistance-turn-support level
of RM3.00.

♦ Swiftly, the stock turned around and blasted to a multi-year high of RM3.72.

♦ However, the push triggered a strong selling pressure and led to sustained profit-taking activities on the stock.

♦ It fell to below the RM3.00 level last week and collected a huge bearish candle on the chart yesterday, losing
17sen or 5.8% for the day.

♦ As the fall also broke the 40-day SMA near RM2.816, coupled with the muted momentum readings on the
indicators, the stock is poised to stage further run-down in the near term.

♦ We expect a solid support zone from RM2.15 to RM2.40. Lower support is at RM1.76.

♦ To return its positive chart outlook, the stock must surpass the RM3.00 key level and reclaim the 10-day SMA
near RM3.08 to reattract bargain hunters.

Technical Readings:

♦ 10-day SMA: RM3.082

♦ 40-day SMA: RM2.816

♦ Support: IS = RM2.40 S1 = RM2.15 S2 = RM1.76

♦ Resistance: IR = RM3.00 R1 = RM3.72

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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
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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
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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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