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

20 April 2010
MARKET DATELINE

Market Technical Reading

Any Rebound Would Likely Be Capped By The 10-day SMA...

Chart 1: KLCI Daily Chart 2: KLCI Intraday

Local Market Leads:

♦ In the face of strong global selloff amid US Goldman Sachs lawsuit and fear of more tightening measures
introduced by China, Bursa Malaysia extended its losing streaks for a second consecutive day on Monday.

♦ Wall Street was shocked by the US Securities and Exchange Commission’s (SEC) fraud charges against Goldman
Sachs on last Friday, triggering a sharp pullback in the US markets on worries of stricter regulations on the US
financial institutions going forward.

♦ It was also reported that UK, Germany and France would launch probes against Goldman Sachs soon.

♦ Regional sentiment worsen in the afternoon when the Shanghai Composite plummeted nearly 5% in response to
another series of new tightening measures to control China’s property market, such as requiring banks to deny
additional mortgages for home buyers who already own 2 or more properties.

♦ But with the return of mild bargain-hunting supports, the FBM KLCI slowly recovered from 1,321.40 low to end at
1,326.67, down by 6.10 pts or 0.46%. Turnover increased slightly to 813m shares, versus Friday’s 784m shares.
Market sentiment was very bearish, with decliners overwhelming advancers by a ratio of nearly 5 to 1.

Technical Interpretations:

♦ Due to overwhelming selling pressure, the FBM KLCI gapped down marginally and hit a more than 2-week low at
1,321.40, before a mild recovery led the index to end the day with a potential “hammer” candle.

♦ While a “hammer” candle could potentially point to a rebound today, we are doubtful of the ability of the rebound,
due to the weak short-term momentum readings and the breakdown of the 10-day SMA of 1,336 of late.

♦ In our view, as long as the FBM KLCI trades at below the 10-day SMA, it will remain in a technical “sell” mode.

♦ In fact, we are keeping the short-term downside targets at the 40-day SMA of 1,312, the 2.6-pts technical gap at
1,305 and the 1,300 psychological level for the FBM KLCI.

Please read important disclosures at the end of this report.

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 20 April 2010

Daily Trading Strategy:

♦ If not because of the mild afternoon recovery in some regional peers, like Hang Seng and a firm start in the early
European markets, the FBM KLCI would probably closed the day with another bearish candle that could press the
sentiment even more bearish today.

♦ However, with a potential “hammer” candle recorded yesterday, there is a chance of a technical recovery today.

♦ But, investors should be aware that the short-term technical outlook has turned negative after the index lost the
10-day SMA of 1,336 late last week.

♦ As a result, the rebound, if any, could be brief and a clear resistance can be expected near the key support-turn-
resistance level of the 10-day SMA.

♦ Surrounded with the probe on Goldman Sachs including the potential similar probes in Europe, China’s tightening
moves and fears of economic repercussions from the volcanic ash cloud in the European skies, trading sentiment
in the local bourse could remain lukewarm in the near term.

♦ Without reclaiming the 10-day SMA, the short-term target of the FBM KLCI should stay at the 40-day SMA of
1,312, a 2.6-pts technical gap near 1,305 and the 1,300 level.

Table 2 : Major Indices & Commodities

Table 1 : Daily Statistics Change Change
Scoreboard 13 Apr 14 Apr 15 Apr 16 Apr 19 Apr Local Key Indices Closing
(Pts) (%)
Gainers 238 375 293 201 134 FBM KLCI 1,326.67 -6.10 -0.5
Losers 494 325 406 495 622 FBM 100 8,724.64 -55.48 -0.6
Unchanged 260 282 298 305 219 FBM ACE 4,143.08 -64.24 -1.5
Untraded 366 375 363 359 388
Major Overseas
Market Cap Indices
Turnover Dow Jones 11,092.05 73.39 0.7
(mln shares) 1,028 845 1,045 784 813 Nasdaq 2,480.11 -1.15 0.0
Value (RM S&P 500 1,197.52 5.39 0.5
mln) 1,413 1,364 1,638 1,207 1,210 FTSE 5,727.91 -16.05 -0.3
Hang Seng 21,405.17 -460.09 -2.1
Currency Jakarta Composite 2,840.43 -38.24 -1.3
MYR vs US Nikkei 225 10,908.77 -193.41 -1.7
Dollar 3.2210 3.1990 3.1925 3.1880 3.2150 Seoul Composite 1,705.30 -29.19 -1.7
Shanghai Composite 2,980.30 -150.00 -4.8
Source: RHBInvest & Bloomberg SET 726.29 -9.87 -1.3
FT Straits Times 2,960.93 -46.26 -1.5
Taiwan Weighted 7,854.22 -257.35 -3.2
India Sensex 17,400.68 -190.50 -1.1
Major Commodities
NYMEX Crude Oil
(US$/barrel) 81.45 -1.79 -2.2
MDEX CPO – Third
Month (RM/metric ton) 2,470.00 -48.00 -1.9
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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 20 April 2010

Chart 3: FKLI Daily Chart 4: FKLI Intraday

Technical Interpretations:

♦ Knocked by the global rout amid a stream of bearish developments, the FKLI went through another challenging
day on Monday, falling more than 1% from Friday’s closing.

♦ Though it tried to recover in the afternoon session, the rebound leg was halted by another round of renewed
selling pressure in late trading.

♦ Upon closing, the FKLI for Apr contract skidded 14.00 pts or 1.05% to 1,322.00.

♦ In contrast to the cash market, the late selling forced the futures index to end with a third bearish candle,
suggesting an extension of selling activities today.

♦ Plus a “double sell” signal on the short-term indicators, there is a likelihood of a follow-through downswing
towards the 40-day SMA near 1,314, after a closure of a gap near the 1,320.50 - 1,327.50 yesterday.

♦ Beyond that, the major 1,300 psychological level will be put to test.

♦ Any surprise rebound will meet an immediate hurdle at the 10-day SMA of 1,338, in our view.

Daily Trading Strategy:

♦ Following the confirmation of the technical breakdown from the 10-day SMA of 1,338 on last Friday, traders
should turn “sell” for the short-term outlook.

♦ A mild rebound to the 10-day SMA will be viewed as an opportunity to “short” the index for a downside target at
the 40-day SMA near 1,314 and the 1,300 key psychological level.

♦ The futures index is expected to swing from 1,314 to 1,328 today.

Table 3: FKLI Closings

FKLI (Month)
Contracts Open High Low Close Chg (Pts) Settle Volume Open Interest
Apr 10 1325.50 1326.00 1319.00 1322.00 -14.00 1322.00 5808 19226
May 10 1325.00 1325.50 1319.00 1321.00 -14.50 1321.50 491 823
Jun 10 1324.00 1324.00 1318.00 1319.00 -16.00 1320.00 142 489
Sep 10 1322.00 1323.50 1317.00 1323.00 -12.50 1319.50 73 246

Source: Bursa Malaysia

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 20 April 2010

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

US Market Leads:

♦ Strong earnings from Citigroup and news that regulators were split on suing Goldman Sachs led to a recovery on
most of the US stocks on Monday.

♦ Citigroup’s share shot up 7.0% after posting a US$4.43bn quarterly profit, exceeding market expectations.

♦ Separately, Goldman Sachs (+1.6%) reversed its early retreat by turning higher in late session, ahead of the
quarterly earning results on Tuesday, and talks that offcials at the US Securities and Exchange Commission’s
(SEC) voted with a marginal win of 3-2 to sue Goldman Sachs for fraud.

♦ On the NYMEX, the US light sweet crude oil futures for May delivery extended its losing streak by falling US$1.79
or 2.2% to US$81.45/barrel as flying retrictions in Europe reduced demand on jet fuel.

♦ After the close, International Business Machines (IBM) fell 1.8% in after-hours trading even after it reported a
better-than-expected earnings and an increase in its earnings outlook for the full year.

Technical Interpretations:

Dow Jones Industrial Average (DJIA)

♦ After a steep fall on last Friday, the US DJIA rebounded on Monday, climbing 73.39 pts or 0.67% to 11,092.05.

♦ However, the index merely registered a “positive harami” candle, indicating a slight reduction on the previous
day’s selling pressure.

♦ In our view, for the index to resume its positive sentiment, it must remove the recent high of 11,154.55 and the
immediate-term resistance level of 11,250 quickly.

♦ Without so, the selling forces may restart to pound the index towards the 21-day SMA near 10,924, hence
threatening the key breakout support at 10,850. Further support range is from 10,150 to 10,850.

Nasdaq Composite (Nasdaq)

♦ The Nasdaq Composite Index plunged to a low of 2,451.72 on Monday, covering a technical gap near 2,463.17,
before recovered slightly to end the day flat at 2,480.11, losing a marginal 1.15pts or 0.05% for the day.

♦ With a record of a “hammer-like” candle, the index indicates a chance of a rebound from the recent selldown
momentum. But the overall chart picture remains sluggish as the momentum readings appear weak.

♦ If the index retreats back to below 2,470, it will resume its downswing to at least the 21-day SMA of 2,425.

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

Malayan Banking (1155)

A technical rebound underway, but the cap is at the RM7.50 region…

♦ Maybank began a sideways consolidation trend in Aug 2009, after enjoying a strong rally from Mar 2009’s low
near RM3.44.

♦ The sideways congestion that trended closer to the resistance level of RM6.86 eventually broke out the level in
early Mar 2010.

♦ It rallied to above the RM7.32 resistance level, but hit a snag at a high of RM7.65, near its chart resistance level
of RM7.70.

♦ In recent trading, the stock drifted around the RM7.50 region, before a sharp selldown on last Friday, the stock
hit a fresh low on Monday to RM7.34, but closed the day at RM7.40.

♦ On the chart, it registered a “hammer” candle, indicating a technical rebound may be underway.

♦ As yesterday’s low is just above the 40-dya SMA of RM7.328, also near the support level of RM7.32, chances are
that it will be supported near the current level in the near term.

♦ As a result, we expect an immediate-term rebound on the share price to cover the 3-sen technical gap created
yesterday, before retesting the 10-day SMA near RM7.492.

♦ But, unless it receives a strong boost on the momentum, it is expected to congest near the RM7.50 region again
soon. Next resistance levels are near the previous high of RM7.65 and the the RM7.70 resistance level.

♦ On the downside, breaching of RM7.32 will mean a further sharp fall towards the RM6.86 level.

Technical Readings:

♦ 10-day SMA: RM7.492

♦ 40-day SMA: RM7.328

♦ Support: IS = RM7.32 S1 = RM6.86 S2 = RM6.26

♦ Resistance: IR = RM7.70 R1 = RM8.15

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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
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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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