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

24 June 2010
MARKET DATELINE

Market Technical Reading

Investors To Apply “Wait-and-see” Strategy...

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

Local Market Leads:

♦ Despite an overnight slump on the US DJIA, and the poor performance in the regional markets, the local bourse
bucked the general downtrend and closed higher on afternoon bargain-hunting activities on Wednesday.

♦ Th FBM KLCI opened softly in the early trading and struggled sideways for most of the day, before the afternoon
recovery and the last-minute push up. It rose 6.26 pts or 0.47% to end the day at 1,329.70.

♦ The index turned positive on the strength of selected bluechips like Sime (+13sen), Maxis (+5sen) and Tenaga
(+6sen), and some development-related issues like Gamuda (10sen), UEMLand (5sen) and MRCB (5sen).

♦ Meanwhile, the regional markets ended mixed as HSI gained 0.2, while Nikkei 225 and SHComp lost 1.9% and
0.7% respectively.

♦ Locally, turnover remained thin with only 685m shares changing hands compared to 673m shares on Tuesday.
Market breadth, however, swung back to positive as gainers led losers by 360 to 275.

Technical Interpretations:

♦ Technically, the FBM KLCI recorded a positive candle, denying Tuesday’s “negative harami” candle that had
suggested for a likelihood of stronger selling activities.

♦ However, the candlestick pattern lacks confirmation for a return to the positive sentiment prior to Tuesday’s fall.

♦ Coupled with the fresh “sell” signal on the stochastic oscillators, and a mixed reading on the 14-day RSI, the
index could trade within a potential tight trading range ahead.

♦ We maintain that for the index to trend up again, it must close the last technical gap of 1,341.23 to 1,344.27
prior to the mid-May reversal, and it must surpass the 1,350 level with a strong momentum.

♦ On the downside, the 10-day and 40-day SMAs near 1,310 and the critical psychological support level at 1,300
will likely limit its downside pressure.
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Daily Trading Strategy:

♦ Yet again, the local benchmark FBM KLCI showed its resiliency yesterday, with mild bargain-hunting activities on
selective bluechips and development-related stocks.

♦ This was despite the slumpy performance in the regional markets amid fears revisited on the Europe debt crisis
and the fading optimism on a more flexible yuan.

♦ However, the pathetic turnover on Tuesday and Wednesday of around 600m shares will limit the risk of T+3
selling pressure today, from Monday’s high volume of 921m shares, in our opinion.

♦ As a result, investors are likely to apply the “wait-and-see” strategy on the sidebench, before making their
additional investment calls going forward.

♦ Given the muted technical outcome from the recent volatilities, we are of the view that the FBM KLCI may be
stuck within 1,300 to 1,350 in the near term, pending a significant breakout signal.

Table 2 : Major Indices & Commodities

Table 1 : Daily Statistics Change Change
Scoreboard 17 June 18 June 21 June 22 June 23 June Local Key Indices Closing
(Pts) (%)
Gainers 295 416 591 226 360 FBM KLCI 1,329.70 6.26 0.5
Losers 277 193 161 434 275 FBM 100 8,747.41 48.81 0.6
Unchanged 294 278 208 255 271 FBM ACE 3,920.70 34.42 0.9
Untraded 502 481 401 446 456 Major Overseas
Indices
Market Cap Dow Jones 10,298.44 4.92 0.0
Turnover Nasdaq 2,254.23 -7.57 -0.3
(mln shares) 516 538 921 673 685 S&P 500 1,092.04 -3.27 -0.3
Value (RM FTSE 5,178.52 -68.46 -1.3
mln) 757 1,160 1,515 1,100 1,118 Hang Seng 20,856.61 37.53 0.2
Jakarta Composite 2,924.79 -9.80 -0.3
Currency Nikkei 225 9,923.70 -189.19 -1.9
MYR vs US Seoul Composite 1,725.82 -5.66 -0.3
Dollar 3.2640 3.2490 3.1965 3.1990 3.2335 Shanghai Composite 2,569.87 -18.83 -0.7
SET 806.52 2.39 0.3
Source: RHBInvest & Bloomberg FT Straits Times 2,871.05 -1.25 0.0
Taiwan Weighted 7,582.15 -30.53 -0.4
India Sensex 17,755.94 6.25 0.0
Major Commodities
NYMEX Crude Oil
(US$/barrel) 76.35 -0.86 -1.1
MDEX CPO – Third
Month (RM/metric ton) 2,384.00 7.00 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:

♦ Due to the overnight negative sentiment from the US market fall, the local futures market opened lower at
1,324.5 from the previous day’s close of 1,329, but it has managed to end the day higher at 1,332.0.

♦ At the close the futures index for Jun contract gained 2 pts or 0.5% on steady afternoon purchases.

♦ It recorded a positive candle for the day, voiding the previous day’s negative candle on the chart, which has
earlier suggested for a retreat.

♦ However, the positive closing lacks confirmation. The stochastic oscillators remained head-down with a fresh
“sell” signal in the “overbought” region and the 14-day RSI stayed weak. This suggests a weaker momentum in
the immediate term.

♦ As the futures index failed to cover the previous 10-pt technical gap from 1,320 to 1,330 created on Monday. It
may resume its downswing to cover the gap, if selling resumes in the immediate term.

♦ As a result, we see risks ahead for the futures index to turn lower again, should the upward momentum appear
weaker than expected.

♦ Immediate upside hurdle is seen near the recent high of 1,342, followed by the 1,350 psychological level, and the
early May high of 1,352.5.

♦ On the downside, it may seek support from the 10-day and 40-day SMAs near 1,314 and 1,310. Stronghold
support remains at 1,300.

Daily Trading Strategy:

♦ Although the buying support returned earlier than expected yesterday, its upside does not seem promising.

♦ Instead, the FKLI should continue its rangebound trading action today, in our view.

♦ We expect the Futures index to swing from 1,320 to 1,335 today.

Table 3: FKLI Closings

FKLI (Month)
Contracts Open High Low Close Chg (Pts) Settle Volume Open Interest
Jun 10 1324.50 1332.50 1322.00 1332.00 2.00 1332.00 4940 19890
Jul 10 1322.00 1333.00 1321.00 1333.00 3.00 1333.00 703 1055
Sep 10 1321.00 1332.00 1320.50 1330.50 2.00 1331.00 150 467
Dec 10 1323.50 1329.50 1321.50 1329.50 3.00 1330.00 53 185

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 stocks closed mixed on Wednesday after seesawing between positive and negative territories throughout the
day on Fed Reserve’s statement, weak housing market report and a selloff in commodity prices.

♦ After a two-day FOMC meeting, the Fed opted to keep rates flat, while saying the economic recovery was
proceeding and the labour market is “improving gradually” but blamed European debt crisis to potentially
hindered growth.

♦ The May new home sales dropped steeply to the worst level on record of 32.7% to the seasonally-adjusted
annual unit rate of 300,000.

♦ Commodity related stocks fell as the US light sweet crude oil futures for August delivery tumbled US$1.79 to
US$76.35/barrel in Nymex.

Technical Interpretations:

Dow Jones Industrial Average (DJIA)

♦ Despite the volatile intraday trading action, the US DJIA overnight added 4.92pts or 0.05% to 10,298.44 at the
end of Wednesday.

♦ The index registered a “doji-like” candle on the chart, indicating mild bargain-hunting support reappearing in the
near term. This was, however, in line with our earlier expectation that it would meet firm support at the 21-day
SMA of 10,183 near the 10,150 range support level.

♦ Although the weak momentum readings might threaten more selling pressure ahead, we believe these immediate
supports should be able to sustain the index within the range of 10,150 to 10,850 going forward.

Nasdaq Composite (Nasdaq)

♦ The Nasdaq Composite index, as expected, eased further on follow-through selling pressure yesterday, losing
7.57 pts or 0.34% to 2,254.23.

♦ But, as it rebounded off low and ended the day back to above the 21-day SMA of 2,248, it recorded a “hammer-
like” candle on the chart, indicating a resurfacing of buying support in the near term.

♦ We expect the 21-day SMA to buffer short-term downside, but foresee a firmer support only at 2,190 for now, we
are keeping our rangebound view on the Nasdaq, fluctuating from 2,190 to 2,330 likely in the near term.

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Daily Technical Watch:

Chart 7: MPHB Daily Chart 8: MPHB Intraday

Multi-Purpose Holdings (3859)

Extended upside to above RM2.20 if buying support continues…

♦ The share price of MPHB was stuck within a tight trading range of RM1.80 to RM1.97 from Sep 2009 to Mar 2010,
before a powerful breakout occurred in late Mar.

♦ The stock pierced through the RM1.97 resistance level and rose sharply to a multi-year high of RM2.48 in Apr
2010.

♦ But, after failing to sustain at above the RM2.43 level, it began a downward trend. It gave up more than what it
has gained from Mar’s breakout as it reached a low of RM1.90 in late May 2010.

♦ However, after stabilising at above RM1.97, the stock regained its attractiveness by jumping above the 10-day
SMA in early Jun. Since then, the SMA has been supporting the recovery leg.

♦ Yesterday, the stock rallied with a lofty 12 sen gain to RM2.16, surpassing the 40-day SMA of RM2.06 with a huge
bullish candle on the chart. This suggests renewed buying momentum ahead.

♦ With both the momentum indicators showing signs of recovery, the 10-day SMA is likely to cut above the 40-day
SMA soon, to trigger a medium-term bullish signal if yesterday’s buying support continues.

♦ In our view, the stock could extend its upside to above the RM2.20 immediate resistance level soon.

♦ That, if it happens, will bring the stock into a higher trading range from RM2.20 to RM2.43, with a potential fresh
year high at above Apr’s high of RM2.48.

Technical Readings:

♦ 10-day SMA: RM2.04

♦ 40-day SMA: RM2.062

♦ Support: IS = RM1.97 S1 = RM1.80 S2 = RM1.60

♦ Resistance: IR = RM2.20 R1 = RM2.43

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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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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
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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.

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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