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

4 May 2010
MARKET DATELINE

Market Technical Reading

Risk Of A “Double Top” Formation Remains...

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

Local Market Leads:

♦ Due to the weak closing on the US DJIA on last Friday, the local bourse, in line with the regional markets, opened
lower in early Monday’s trading.

♦ However, as soon as the selling activities eased, bargain hunters moved back in to scoop up the core index-linked
stocks. That helped to lift the key FBM KLCI, pompting it to close up marginally by 0.51 pt to 1,346.89.

♦ The regional markets on the other hand, closed lower mostly with falls of 1.0-1.4% for the day. The HSI, KOSPI
and FTSTI closed 1.4%, 1.1% and 1.0% lower respectively.

♦ Overall sentiment remained lukewarm as investors were cautious, fearing more volatility in the near term due to
the unforeseen external uncertainties.

♦ Turnover fell to 771m shares yesterday from 889m shares on last Friday, and the market breadth turned back to
negative with losers outnumbering gainers by 456 to 254.

Technical Interpretations:

♦ As expected, the FBM KLCI opened weaker and retreated to a day low of 1,340.26, before re-attracting the
bargain-hunting support and ended the day almost flat.

♦ Despite a slight improvement on the stochastic oscillators, the FBM KLCI registered a “hangman” candle on the
chart, indicating a potential further weakness today.

♦ As we reiterated earlier, a fall from the current level will confirm the “double top” formation at the high near
1,347. Note that the index still fell short of crossing this level yesterday.

♦ Only by removing the 1,347 level will the index’s near-term outlook turn positive, with another set of fresh chart
breakout. Next upside target is at 1,390.

♦ The immediate supports are seen at the 10-day and 40-day SMAs of 1,339 and 1,326.

Please read important disclosures at the end of this report.

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 4 May 2010

Daily Trading Strategy:

♦ Although yesterday’s recovery from the early weaknesss managed to push the FBM KLCI to close marginally
positive, a “hangman” candle from the candlestick pattern suggests a potential pullback today.

♦ As the index could not match last Friday’s high of 1,348.15, it still faces the similar risk of a possible “double top”
formation, if it eases further today.

♦ Given the daily turnover that was far below the 1.0-1.2bn shares of active-trading level, the market sentiment
will remain weak in the short term.

♦ We expect investors to continue adopting their wait-and-see strategy, pending stabilisation signs from the volatile
regional markets’ sentiment.

♦ For the support, the 10-day and 40-day SMAs of 1,339 and 1,336 will buffer the selling pressure, if any.

Table 2 : Major Indices & Commodities

Table 1 : Daily Statistics Change Change
Scoreboard 27 Apr 28 Apr 29 Apr 30 Apr 3 May Local Key Indices Closing
(Pts) (%)
Gainers 178 236 347 436 254 FBM KLCI 1,346.89 0.51 0.0
Losers 502 472 363 265 456 FBM 100 8,842.57 -1.59 0.0
Unchanged 308 276 279 321 268 FBM ACE 4,158.79 -10.06 -0.2
Untraded 377 385 378 347 395
Major Overseas
Market Cap Indices
Turnover Dow Jones 11,151.83 143.22 1.3
(mln shares) 975 831 899 889 771 Nasdaq 2,498.74 37.55 1.5
Value (RM S&P 500 1,202.26 15.57 1.3
mln) 1,195 1,118 988 1,475 1,031 FTSE 5,553.29 Closed Closed
Hang Seng 20,811.36 -297.23 -1.4
Currency Jakarta Composite 2,960.90 -10.35 -0.3
MYR vs US Nikkei 225 11,057.40 Closed Closed
Dollar 3.1860 3.2160 3.1960 3.1820 3.2085 Seoul Composite 1,721.21 -20.35 -1.2
Shanghai Composite 2,870.61 Closed Clsoed
Source: RHBInvest & Bloomberg SET 763.51 Closed Closed
FT Straits Times 2,944.22 -30.39 -1.0
Taiwan Weighted 7,952.17 -52.08 -0.7
India Sensex 17,386.08 -172.63 -1.0
Major Commodities
NYMEX Crude Oil
(US$/barrel) 86.19 0.04 0.0
MDEX CPO – Third
Month (RM/metric ton) 2,554.00 -4.00 -0.2
US Interest Rate Current Last Updated
Overnight Fed Fund 27-28 Apr
0-0.25% Unch
Rate 2010
Next FOMC meeting 22-23 June 2010

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 4 May 2010

Chart 3: FKLI Daily Chart 4: FKLI Intraday

Technical Interpretations:

♦ Despite the afternoon strength in the local cash market, the futures index failed to stage a recovery on Monday.

♦ The FKLI for May contract lost 4pts or 0.3% to 1,343.5, even though it has once recovered to a high of 1,348.0
yesterday.

♦ On the chart, it recorded a “shooting star-like” candle following last Friday’s positive candle, indicating a potential
pullback today.

♦ Technically, the futures index is poised to revisit the 10-day SMA of 1,338 in the immediate term.

♦ If it loses the 10-day SMA, it could trade lower towards the 40-day SMA of 1,328.

♦ From the momentum indicators, the flattish 14-day RSI must recover soon to lift the short-term trading
momentum for the FKLI to trend up.

♦ On the upside, the futures index must also remove the previous high of 1,350.5 to secure further follow-through
buying support.

Daily Trading Strategy:

♦ As a result of the failure to rechallenge the previous high of 1,350.5, it lacks a clear signal for the traders to turn
“long” currently.

♦ In fact, traders should expect a pullback towards the 10-day SMA of 1,338 soon.

♦ Meanwhile, we expect the FKLI to swing from 1,335 to 1,348 today.

Table 3: FKLI Closings

FKLI (Month)
Contracts Open High Low Close Chg (Pts) Settle Volume Open Interest
May 10 1344.00 1348.00 1343.00 1343.50 -4.00 1343.50 3790 18130
Jun 10 1343.00 1346.50 1342.00 1343.50 -3.00 1343.50 209 537
Sep 10 1343.00 1344.50 1341.50 1342.50 -3.50 1342.50 25 218
Dec 10 1342.50 1343.00 1342.00 1342.00 0.00 1342.00 13 0

Source: Bursa Malaysia

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 4 May 2010

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

US Market Leads:

♦ Powered by a stream of upbeat economic data as well as news of the US$146bn financial aid approved to Greece,
the US markets staged a broad-based rally on Monday.

♦ The Institute for Supply Management’s index of manufacturing rose to 60.4 in Apr from Mar’s 59.6, exceeding
expectation of an increase to 60. Meanwhile, Mar’s consumer spending posted its biggest rise in five months with
a 0.6% rise.

♦ Separately, auto makers, including Chrysler, Ford Motor and Toyota Motor reported about 25% jump in their auto
sales in Apr.

♦ Over the weekend, European countries and International Monetary Fund (IMF) agreed to provide US$146bn aid to
Greece. This temporarily eased investors’ concerns over the debt crisis in the Eurozone.

♦ On the NYMEX, the US light sweet crude oil futures for June delivery inched up US$0.04 to US$86.19/barrel.

Technical Interpretations:

Dow Jones Industrial Average (DJIA)

♦ After the previous strong selloff, the US DJIA made a timely comeback to above the 21-day SMA of 11,058 by
rallying 162.34 pts or 1.47% to 11,170.95 on Monday.

♦ Ended with a “positive harami” candle, this implies a slowdown in the recent bearish momentum.

♦ Not only that, the uptick in both the short-term momentum readings with a fresh “buy” signal on the stochastic
oscillators points to a stronger rebound ahead.

♦ But until the Dow can fully reclaim the 11,250 technical level and the recent peak of 11,258.01, the current
choppy trend is likely to continue. The next technical hurdle is at 11,750.

Nasdaq Composite (Nasdaq)

♦ The Nasdaq Composite Index has recaptured the 21-day SMA of 2,477 and the 2,470 level with a “positive
harami” candle yesterday, as it bounced back strongly by 40.69 pts or 1.65% to 2,501.88 on Monday.

♦ The latest technical readings suggest a possible further rebound ahead, but its upside could be capped by the
recent high of 2,535.28. Next resistance is only seen at 2,630.

♦ Immediate support stays at the 21-day SMA and the 2,470 level.

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

Proton Holdings (5304)

Poised for another chart breakout should it surpass RM5.00 today…

♦ The share price of Proton broke out from the RM3.00 level in Sep 2009, and kicked off a powerful rally and
reached a high of RM4.60 in the same month.

♦ The stock fell into a consolidation phase shortly after that, and lingered at around the RM3.80 - RM4.26 region
between Oct 2009 and Mar 2010.

♦ As its upward movements gained momentum, it launched another powerful breakout of the RM4.26 level, and
this time around, the stock rallied steeply on strong recovery momentum after a short congestion at RM4.26.

♦ The stock managed to cover the 22sen technical gap created back in Nov 2007 near RM5.00 in late Apr. And
yesterday, it ended at RM4.99 after touching a day high of RM5.02.

♦ Closed with a bullish candle and the upbeat short-term momentum readings, the stock is poised for another chart
breakout should it surpass the RM5.00 psychological level today.

♦ The breakout, if it happens, will lead to a further run-up on follow-through buying momentum to RM6.00 and
RM7.00 respectively.

♦ Only if it unexpectedly retreats from RM5.00, will it give way to more selling activities in the immediate term.
Otherwise, its short-term outlook is positively biased, in our view.

Technical Readings:

♦ 10-day SMA: RM4.831

♦ 40-day SMA: RM4.662

♦ Support: IS = RM4.26 S1 = RM3.80 S2 = RM3.40

♦ Resistance: IR = RM5.00 R1 = RM6.00 R2 = RM7.00

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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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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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The research analysts, economists or research associates principally responsible for the preparation of this research report have received compensation based
upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues.

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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