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

15 April 2010
MARKET DATELINE

Market Technical Reading

More Consolidation If Sentiment Fails To Improve Today...

Chart 1: KLCI Daily Chart 2: KLCI Intraday

Local Market Leads:

♦ Taking cues from the US Intel’s bullish earnings and sales forecast, Asian markets including Bursa Malaysia ended
higher on Wednesday.

♦ The FTSTI rallied the most on a steep upgrade on the country’s 2010 GDP growth forecast, surging 1.62% to
3,019.74. But most of its regional peers pared down their gains due to the afternoon profit-taking activities.

♦ Besides the regional factor, a stronger ringgit also helped to improve bargain-hunting supports on the local
market. The local unit appreciated to 3.1990 vis-a-vis the US dollar from 3.2210 after the Singapore central bank
unexpectedly moved to tighten policy by allowing a stronger Singapore dollar going forward.

♦ But as profit-taking activities increased in the afternoon, the FBM KLCI gave up most of its gains to end with 1.37
pts or 0.10% higher at 1,335.89.

♦ Turnover breached below 1.0bn shares mark for the first time in eight trading days to 845m shares from
Tuesday’s 1.03bn shares. Market breadth turned positive, with 375 counters up against 325 counters down.

Technical Interpretations:

♦ The FBM KLCI rebounded nearly 7-pts to a high of 1,341.48 in the early trading yesterday, before drifting lower
throughout the day to end at 1,335.89.

♦ It recorded a small positive candle and a marginal “buy” signal on the stochastic oscillators, signaling a possible
further rebound ahead. However, due to its failure to reclaim the key 10-day SMA of 1,337 and a weaker trading
volume of late, any recovery attempt in the coming sessions will meet with significant resistance, in our view.

♦ To reiterate, for the FBM KLCI to maintain the recent upbeat momentum, it must reclaim the 10-day SMA with a
daily turnover of above the 1.0bn shares mark.

♦ Supports are near the 2.6-pts technical gap of 1,305, the 40-day SMA of 1,306 and the key 1,300 level.

Please read important disclosures at the end of this report.

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 15 April 2010

Daily Trading Strategy:

♦ Despite yesterday’s mild rebound, the FBM KLCI has yet to recover to above the 10-day SMA near 1,337.

♦ Given the poorer turnover at below 1.0bn shares mark, the market’s short-term trading momentum may continue
to deteriorate if the index sustains at below the supportive SMA in the next few sessions.

♦ Therefore, a further consolidation may be underway in the near term, if the market lacks fresh leads in the near
term.

♦ This also means the T+3 and T+4 selling forces from recent high trading volume may continue to dampen
sentiment ahead.

♦ As a result, investors should anticipate a revisit to the 40-day SMA of 1,306, the 2.6-pts technical gap near 1,305
and the 1,300 psychological level soon, if there is no positive change on the lacklustre trading sentiment today.

Table 2 : Major Indices & Commodities

Table 1 : Daily Statistics Change Change
Scoreboard 8 Apr 9 Apr 12 Apr 13 Apr 14 Apr Local Key Indices Closing
(Pts) (%)
Gainers 239 470 374 238 375 FBM KLCI 1,335.89 1.37 0.1
Losers 476 266 367 494 325 FBM 100 8,813.72 13.70 0.2
Unchanged 292 268 265 260 282 FBM ACE 4,246.11 -8.20 -0.2
Untraded 351 353 351 366 375
Major Overseas
Market Cap Indices
Turnover Dow Jones 11,123.11 103.69 0.9
(mln shares) 1,279 1,254 1,106 1,028 845 Nasdaq 2,504.86 38.87 1.6
Value (RM S&P 500 1,210.65 13.35 1.1
mln) 1,737 1,582 1,658 1,413 1,364 FTSE 5,796.25 34.59 0.6
Hang Seng 22,121.43 17.90 0.1
Currency Jakarta Composite 2,885.02 0.32 0.0
MYR vs US Nikkei 225 11,204.90 43.67 0.4
Dollar 3.2050 3.1880 3.2060 3.2210 3.1990 Seoul Composite 1,735.33 24.74 1.4
Shanghai Composite 3,166.18 4.93 0.2
Source: RHBInvest & Bloomberg SET 760.90 Closed Closed
FT Straits Times 3,019.74 48.14 1.6
Taiwan Weighted 8,097.13 67.40 0.8
India Sensex 17,821.96 Closed Closed
Major Commodities
NYMEX Crude Oil
(US$/barrel) 85.84 1.79 2.1
MDEX CPO – Third
Month (RM/metric ton) 2,528.00 -3.00 -0.1
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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 15 April 2010

Chart 3: FKLI Daily Chart 4: FKLI Intraday

Technical Interpretations:

♦ In line with the regional recovery, traders returned to the KL futures market, lifted the FKLI higher on mild buying
support on Wednesday.

♦ The futures index traded positively in the morning session, and shot up to 1,346.00 high but trimmed down its
gains to end at 1,342.00 on mild selling activities in late session.

♦ For the day, the FKLI for Apr contract gained 8.00 pts or 0.60% to 1,342.00.

♦ The futures index finished marginally above the 10-day SMA of 1,341 with a tiny positive candle on the chart.

♦ Given both the short-term momentum indicators have ticked higher, the futures index stands a better chance for
an extended rebound in the near term.

♦ However, it must still sustain at above the 10-day SMA to engineer a sustainable recovery mode and lure in more
buying support for further upside ahead.

♦ If it succeeds, it will rechallenge the recent high of 1,350.50 before resuming its previous uptrend towards the
1,390 significant resistance.

♦ A loss of the SMA will mean a fall back into a consolidation mode, with a possible retest of a technical gap near
1,320.50 - 1,327.50 and a revisit of the 1,300 psychological support.

Daily Trading Strategy:

♦ The FKLI staged a timely rebound to above the 10-day SMA near 1,341 to suggest a further rebound today.

♦ But, technically, more challenges are to be expected in the near term, before it can confirm the resumption of the
recent uptrend.

♦ Meanwhile, the FKLI is likely to swing from 1,335 to 1,349 today, in our view.

Table 3: FKLI Closings

FKLI (Month)
Contracts Open High Low Close Chg (Pts) Settle Volume Open Interest
Apr 10 1341.50 1346.00 1340.00 1342.00 8.00 1342.00 5043 18666
May 10 1341.00 1345.50 1340.00 1342.00 8.00 1342.00 151 589
Jun 10 1340.50 1344.00 1340.00 1341.00 7.00 1341.00 96 512
Sep 10 1339.50 1343.00 1339.50 1340.50 7.50 1340.50 26 199

Source: Bursa Malaysia

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 15 April 2010

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

US Market Leads:

♦ Powered by strong earnings from Intel Corp and JPMorgan Chase, the major US gauges expanded their rally for a
fifth day on Wednesday.

♦ Intel Corp and JPMorgan Chase rose 3.3% and 4.0% respectively following their strong quarterly earnings that
buoyed expectations on the first quarter earnings reporting season.

♦ Also, sentiment was boosted further by upbeat retail sales and encouraging signs of economic improvement in
the Federal Reserve’s Beige Book.

♦ Retail sales grew 1.6% in Mar, posting its largest increase in 4 months, while Fed’s Beige Book showed overall
economic activity rose in 11 of 12 districts between end-Feb and April 5.

♦ After sliding for five consecutive days, the US light sweet crude oil futures finally staged a strong rebound on a
surprise decline on the weekly crude inventories. The May delivery shot up US$1.79 or 2.1% to US$85.84/barrel.

Technical Interpretations:

Dow Jones Industrial Average (DJIA)

♦ As bullish momentum accelerated, the US DJIA surged 103.69 pts or 0.94% to end at 11,123.11 yesterday.

♦ And with a huge bullish candle on the chart, this effectively overruled the previous “hangman-like” candle and
turned the short-term outlook more positive ahead.

♦ Given the further strengthening of the short-term momentum readings, the Dow is expected to rechallenge the
next upside target at 11,250 soon.

♦ The current upswing will be supported by the 10,850 level and the 21-day SMA near 10,868 in the near term.

Nasdaq Composite (Nasdaq)

♦ As sentiment turned more bullish, the Nasdaq Composite Index gapped up at above 2,470 by rallying 38.87 pts
or 1.58% to 2,504.86 on Wednesday.

♦ While the bullish breakout from 2,470 appears encouraging with a potential upside towards the next target at
2,630, we caution that the stochastic oscillators and 14-day RSI have reached the “extremely overbought” and
“very overbought” region. This suggests the overheating Nasdaq could take a setback at anytime soon.

♦ For that, we revised the immediate supports higher to 2,470 and the gap at 2,467.94 – 2,480.43 range.

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

Top Glove Corporation (7113)

The stock must sustain at above the 40-day SMA of RM12.57 to trigger a rebound…

♦ The share price of TopGlov has been trending along the Uptrend Line (UTL) since Jan 2009.

♦ But, in Nov 2009, the stock’s upward momentum accelerated when it surpassed the important level of RM8.60.

♦ It rallied steeply towards the resistance level of RM12.00, before settled down in a consolidation phase of
between RM10.60 and RM12.00.

♦ In early Mar 2010, the stock penetrated the RM12.00 level and blasted all the way to the RM14.02 fresh high
level, before giving ways to a profit-taking dip.

♦ It fell to below the 10-day SMA and closed yesterday at RM12.74, with a series of negative candles.

♦ However, sealed with a “morning star” candle just above the 40-day SMA of RM12.57, the stock has a slim
chance to launch a technical rebound soon.

♦ If it manages to record a positive candle today, it will register an uptick on the momentum indicators, which will
then help it to lure back the buying supports. Thus triggering a technical rebound after recent slumps.

♦ Nevertheless, a further fall from the 40-day SMA will trigger another bearish sign, amidst the current bearish tone
on the momentum readings.

♦ That, if it happens will drag the stock further south to retest the RM10.60 - RM12.00 support zone, nearby the
long-term supportive UTL.

Technical Readings:

♦ 10-day SMA: RM13.606

♦ 40-day SMA: RM12.573

♦ Support: IS = RM12.00 S1 = RM10.60 S2 = RM9.70

♦ Resistance: IR = RM14.00

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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
of persons who receive it. The securities discussed in this report may not be suitable for all investors. RHBRI recommends that investors independently evaluate
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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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