Sie sind auf Seite 1von 6

PP 7767/09/2011(028730)

RHB Research

Malaysia
Technical Research Institute Sdn Bhd
A member of the
8 RHB Banking Group
Company No: 233327 -M

Dail y Trad ing St rat eg y


MARKET DATELINE 21 October 2010
Market Technical Reading
Recapturing The 10-day SMA Will Renew Upbeat Sentiment...

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

Local Market Leads:

♦ Local market pared down early losses by ending slightly lower on Wednesday, after most of the Asian markets
recouped their early losses on bargain-hunting support in the afternoon.

♦ Boosting investors’ confidence was a strong rebound in Shanghai Composite. The index inched up 0.07%, after
plunging nearly 2% at one stage on a surprise rate hike by China’s central bank in late Tuesday.

♦ As a result, Asian markets finished mixed, with Nikkei 225 dropping 1.66%, but Taiwan Weighted and KOSPI
bounced back to end up by 0.97% and 0.71% respectively.

♦ Back home, the FBM KLCI was down only 1.87 pts or 0.13% to 1,486.78, dragged down by Axiata (-6sen), GenM
(-5sen) and RHBCap (-8sen). But, the index hit an early low of 1,476.56 just after the opening bell.

♦ Overall market tone was rather upbeat with continuous rotational plays on lower liners and glove-related stocks,
like ASB (+2sen), TimeCom (+2sen), Equine (+5sen) and Latexx (+29sen). Daily volume stayed robust at 1.49bn
shares with 408 counters down versus 385 counters up.

Technical Interpretations:

♦ From the 1,476.56 low (-12.09 pts), the FBM KLCI recovered on sustained buying momentum throughout the day.

♦ Though the key benchmark finished at slightly below the 10-day SMA of 1,488, there is a chance for it to reclaim
the SMA today following a positive candle registered on the chart yesterday.

♦ In fact, in our view, should it fully regain and stabilise at above the 10-day SMA today, the benchmark could see a
technical rebound soon.

♦ Again, upon removal of the recent high of 1,503.82, the index will likely refresh its bullish upswing momentum.

♦ Besides its immediate support at a technical gap near 1,472.32 - 1,476.05, we continue to bet on the 40-day SMA
of 1,458 and the solid resistance-turn-support level of 1,450 to protect its medium- to long-term uptrend.

Please read important disclosures at the end of this report.

A comprehensive range of market research reports by award-winning economists and analysts are exclusively Page 1 of 6
available for download from www.rhbinvest.com
21 October 2010

Daily Trading Strategy:

♦ Despite failing to reclaim the 10-day SMA of 1,488 yesterday, we see a good chance for further near-term
recovery as the local and regional markets’ performance appeared more resilient than we had expected.

♦ Apart from that, we were encouraged by the solid rotational plays on the lower liners and the selective sectors,
which have kept the trading sentiment on an upbeat mode with robust participation in recent sessions.

♦ Therefore, in our opinion, further recovery to above the 10-day SMA today will attract further follow-through
buying support in the near term.

♦ And once the recent high of 1,503.82 can be cleared, the short-term technical scenario will return to positive as
the benchmark gears up to rechallenge the historical high at 1,524.69.

♦ On the downside, the solid medium-term support at 1,450 level and the 40-day SMA of 1,458 are expected to
keep sellers at bay.

Table 2 : Major Indices & Commodities


Table 1 : Daily Statistics Change Change
Scoreboard 14 Oct 15 Oct 18 Oct 19 Oct 20 Oct Local Key Indices Closing
(Pts) (%)
Gainers 348 324 299 438 385 FBM KLCI 1,486.78 -1.87 -0.1
Losers 455 405 468 369 408 FBM 100 9,800.30 -9.66 -0.1
Unchanged 302 341 298 276 293 FBM ACE 4,244.48 59.54 1.4
Untraded 260 296 306 288 286 Major Overseas
Indices
Market Cap Dow Jones 11,107.97 129.35 1.2
Turnover Nasdaq 2,457.39 20.44 0.8
(mln shares) 1,274 1,021 1,331 1,500 1,489 S&P 500 1,178.17 12.27 1.1
Value FTSE 5,728.93 25.04 0.4
(RM mln) 2,042 1,647 1,610 1,820 1,803 Hang Seng 23,556.50 -207.23 -0.9
Jakarta Composite 3,578.95 -13.84 -0.4
Currency Nikkei 225 9,381.60 -157.85 -1.7
MYR vs US Seoul Composite 1,870.44 13.12 0.7
Dollar 3.0820 3.0800 3.1005 3.1070 3.1165 Shanghai Composite 3,003.95 2.10 0.1
SET 988.81 -0.46 0.0
Source: RHBInvest & Bloomberg Straits Times 3,179.15 -13.14 -0.4
Taiwan Weighted 8,124.62 78.39 1.0
India Sensex 19,872.15 -110.98 -0.6
Major Commodities
NYMEX Crude Oil
(US$/barrel) 81.77 2.28 2.9
FCPO – Third Month
(RM/metric ton) 2,990.00 71.00 2.4
US Interest Rate Current Last Updated
21 Sep
Overnight Fed Fund Rate 0-0.25% Unch
2010
Next FOMC meeting 2-3 Nov 2010

A comprehensive range of market research reports by award-winning economists and analysts are exclusively Page 2 of 6
available for download from www.rhbinvest.com
21 October 2010

Chart 3: FKLI Daily Chart 4: FKLI Intraday

Technical Interpretations:

♦ Underpinned by the afternoon improvement in the overseas sentiment, the KL futures market managed to recover
from the 1,476 low and ended slightly higher yesterday.

♦ And as it successfully outperformed the slightly negative closing in the cash market, the FKLI for Oct contract
inched up 1.00 pt or 0.07% to settle at 1,491.00.

♦ On the chart, the futures index acquired a second positive candle at above the 10-day SMA of 1,486 to suggest a
meaningful technical rebound could be on the cards.

♦ In fact, with the stochastic oscillators generating a fresh “buy” signal, we are quite optimistic that the FKLI will
rechallenge the recent high of 1,501 soon.

♦ And beyond 1,501, it will set the stage for a potential resumption of bullish rally towards the all-time high of
1,536.

♦ In the meantime, it continues to depend on the solid supportive 10-day SMA to ward off any immediate weakness,
while its bullish medium- to long-term technical view stay intact at above the 40-day SMA of 1,458 and the 1,450
support level.

Daily Trading Strategy:

♦ Yesterday’s defence at above the 10-day SMA of 1,486 continued to paint an optimistic chartview on the near-
term direction of the futures market.

♦ Therefore, traders should hold given the view that the FKLI will likely retest the recent high of 1,501 soon, before
turning more upbeat on the outlook going forward.

♦ As a result, we foresee the FKLI to swing from 1,480 to 1,501 today.

Table 3: FKLI Closings


FKLI (Month)
Contracts Open High Low Close Chg (Pts) Settle Volume Open Interest
Oct 10 1480.50 1493.50 1476.00 1491.00 1.00 1491.00 7250 20680
Nov 10 1479.00 1493.00 1477.00 1491.50 1.00 1491.50 613 842
Dec 10 1481.00 1493.00 1477.00 1490.50 0.50 1490.50 110 383
Mar 11 1481.00 1483.00 1480.00 1483.00 -8.50 1490.00 36 123

Source: Bursa Malaysia

A comprehensive range of market research reports by award-winning economists and analysts are exclusively Page 3 of 6
available for download from www.rhbinvest.com
21 October 2010

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

US Market Leads:

♦ Following Tuesday’s sharp correction, the bulls made a strong comeback on the back of a series of upbeat
quarterly earnings news as well as a weaker US dollar.

♦ Dow component, Boeing rose 3.3% after posting stronger-than-expected quarterly earnings and a hike in its full-
year forecast. Yahoo! gained 2% as its third-quarter profit increased more than doubled, while Wells Fargo
advanced 4.3% on its record quarterly profit.

♦ Besides, the weakened greenback also boosted investors’ risk appetite on equities after the Fed’s Beige Book
showed that the US economy grew at a “moderate pace” with little sign of acceleration. Investors viewed the
report as another sign that the Fed will need to introduce more measures to boost the economy.

♦ Led by the weakness in the greenback as well as a smaller-than-expected rise in weekly crude inventories, the US
light sweet crude oil futures for the expired Nov delivery jumped by US$2.28 or 2.9% to US$81.77/barrel.

Technical Interpretations:

Dow Jones Industrial Average (DJIA)

♦ As the DJIA kicked off a timely rebound from near the 21-day SMA of 10,927, the index rallied 129.35 pts or
1.18% to 11,107.97 on Wednesday.

♦ And as the Dow has successfully regained the 11,000 level with a bullish candle, this marks renewed hopes for
further recovery ahead.

♦ Still, it is required to penetrate the recent high of 11,159.05 to restore its bullish momentum towards the next
immediate resistance target at 11,250.

♦ Otherwise, it could still consolidate at between the 21-day SMA and the recent high of 11,159.05.

Nasdaq Composite (Nasdaq)

♦ In line with the previous “inverted hammer” candle, the Nasdaq Composite index bounced back by 20.44 pts or
0.84% to 2,457.39 Wednesday.

♦ Though the index sealed the day with a positive candle, the mixed momentum readings suggest that any rebound
potential could be capped.

♦ In other words, until it can remove 2,470 and the recent high of 2,480.95 convincingly, the risk of a resumption
of selling should not be completely ignored. The immediate support is pegged at the 21-day SMA of 2,398.

A comprehensive range of market research reports by award-winning economists and analysts are exclusively Page 4 of 6
available for download from www.rhbinvest.com
21 October 2010

Daily Technical Watch:


Chart 7: AFG Daily Chart 8: AFG Intraday

Alliance Financial Group (2488)

Medium- to long-term uptrend remains largely intact…

♦ Since the beginning of the uptrend in Mar 2009, the share price of AFG has been trending along the Uptrend Line
(UTL).

♦ In a consolidation phase in Nov 2009 – Jan 2010, the stock formed a base near the UTL, before accelerating its
upward momentum to top a high at RM3.18 in Apr 2010.

♦ But a subsequent profit-taking leg has brought down the share price to hover at around the UTL again in Jun.

♦ Thereafter, the stock has been trending along the UTL and hit a multi-year high of RM3.27 in early Oct, before
the current retreat to close at RM3.16 on Wednesday.

♦ The stock registered a “negative harami” candle and chalked up negative momentum readings on the indicators
with a slight downtick on the 10-day SMA.

♦ Technically, the stock is poised to see further downside momentum in the near term.

♦ However, as the stock still trades at above the 40-day SMA of RM3.15, it should be able to sustain at above the
UTL and the critical support level at RM3.10 in the near term, in our view.

♦ In other words, its medium- to long-term uptrend remains largely intact and the stock is open for a chance to
rechallenge its upside at the RM3.27 high, before moving towards the RM3.30 and RM3.48 resistance levels upon
the revival of the buying momentum.

Technical Readings:

♦ 10-day SMA: RM3.225

♦ 40-day SMA: RM3.151

♦ Support: IS = RM3.10 S1 = RM2.95 S2 = RM2.80

♦ Resistance: IR = RM3.30 R1 = RM3.48 R2 = RM3.68

A comprehensive range of market research reports by award-winning economists and analysts are exclusively Page 5 of 6
available for download from www.rhbinvest.com
21 October 2010

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
any liability for any loss or damage arising out of the use of all or any part of this report.

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
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.

A comprehensive range of market research reports by award-winning economists and analysts are exclusively Page 6 of 6
available for download from www.rhbinvest.com