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

9 March 2010
MARKET DATELINE

Market Technical Reading

On The Way To Cover A Technical Gap Near 1,354.79…

Chart 1: KLCI Daily Chart 2: KLCI Intraday

Local Market Leads:

♦ Underpinned by expectation of a sustained economic recovery going forward, banking heavyweights propelled
Bursa Malaysia to hit a 2-year high on Monday.

♦ The day started off with a big jump on the FBM KLCI, opening above the major psychological hurdle of 1,300,
with a 12.40 pts gap-up in response to a triple-digit US DJIA’s rally on Friday.

♦ Sentiment strengthened further by the regional rally, bolstered by the solid US jobs data and news that the
French President Nicolas Sarkozy has said the European Union (EU) was ready to bail out Greece.

♦ At the close, the bencmark FBM KLCI gained 24.44 pts or 1.88% to 1,324.22, led by strong rally in banking
stocks, like PBBank (+62sen), CIMB (+40sen) and Maybank (+12sen).

♦ Total volume transacted expanded to 1.16bn shares, up from 942m shares on last Friday. Market breadth stayed
positive, with counters up surpassing counters down by a ratio of 3 to 1.

Technical Interpretations:

♦ The FBM KLCI recorded a second consecutive technical gap in two sessions, as investors ramped up the index-
linked counters throughout the day, prompting the index to close firmly positive at 1,324.22.

♦ With the strong clearance of 1,300 and Jan’s high of 1,308.52, and on top of the recent triggered “golden cross”
between the 10-day and 40-day SMAs, the FBM KLCI’s short- and medium-term technical outlook has turned
bullish.

♦ Although both short-term momentum indicators have reached the “overbought” region, it is still possible for the
index to march higher on follow-through buying momentum to close a gap near 1,354.79.

♦ Ultimately, the breakout of 1,300 will point the index to 1,390. Meanwhile, the immediate support is seen at the
1,300 psychological level.

Please read important disclosures at the end of this report.

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 9 March 2010

Daily Trading Strategy:

♦ With yesterday’s powerful rally, the FBM KLCI could resume the previous 11-month uptrend, with the previous
resistance zone of between 1,250 – 1,300 region as its medium-term technical support zone going forward.

♦ Aided by the recent positive crossover of the 10-day SMA to above the 40-day SMA, as well as robust trading
interests at above 1.0bn shares mark, the index is poised to surge further in the short term.

♦ In our view, it is on the way to cover a technical gap near 1,354.79, before heading towards the 1,390 tough
resistance level.

♦ However, the index must defend at above the 1,300 level, should a sudden technical pullback appear in the
immediate term.

♦ Apart from the solid buying support on selective heavyweights, buying interests on lower liners should improve if
average daily turnover can maintain at around 1.0bn – 1.5bn shares mark in the near term.

Table 2 : Major Indices & Commodities

Table 1 : Daily Statistics Change Change
Scoreboard 2 Mar 3 Mar 4 Mar 5 Mar 8 Mar Local Key Indices Closing
(Pts) (%)
Gainers 323 294 281 547 583 FBM KLCI 1,324.22 24.44 1.9
Losers 405 402 385 194 194 FBM 100 8,659.37 153.14 1.8
Unchanged 252 270 282 236 256 FBM ACE 4,311.22 12.18 0.3
Untraded 356 370 388 359 304 Major Overseas
Indices
Market Cap Dow Jones 10,552.52 -13.68 -0.1
Turnover Nasdaq 2,332.21 5.86 0.3
(mln shares) 839 864 727 942 1,161 S&P 500 1,138.50 -0.19 0.0
Value (RM FTSE 5,606.72 6.96 0.1
mln) 1,550 1,511 1,268 1,564 2,259 Hang Seng 21,196.87 408.90 2.0
Jakarta Composite 2,626.45 47.68 1.8
Currency Nikkei 225 10,585.92 216.96 2.1
MYR vs US Seoul Composite 1,660.04 25.47 1.6
Dollar 3.3835 3.3725 3.3710 3.3620 3.3380 Shanghai Composite 3,053.23 22.16 0.7
SET 720.29 -3.67 -0.5
Source: RHBInvest & Bloomberg FT Straits Times 2,834.57 44.28 1.6
Taiwan Weighted 7,762.27 96.01 1.3
India Sensex 17,102.60 108.11 0.6
Major Commodities
NYMEX Crude Oil
(US$/barrel) 81.87 0.37 0.5
MDEX CPO – Third
Month (RM/metric ton) 2,709.00 39.00 1.5
US Interest Rate Current Last Updated
Overnight Fed Fund 26-27 Jan
0-0.25% Unch
Rate 2010
Next FOMC meeting 16 Mar 2010

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 9 March 2010

Chart 3: FKLI Daily Chart 4: FKLI Intraday

Technical Interpretations:

♦ As the bulls pushed forward, the FKLI expanded its bullish momentum to above Jan’s high of 1,307 on Monday,
amid positive leads from the domestic and overseas markets.

♦ The FKLI opened with a second technical gap on the chart on Monday.

♦ From its intraday low of 1,311.0, the FKLI for March contract worked its way to close at 1,323.50, gaining 20.5
pts or 1.57%, with an intraday high of 1,328.0. This was its highest closing since end-Feb 2008.

♦ Despite facing mild setback in the late session, the FKLI still registered a bullish candle on the chart.

♦ With a convincing breakthrough from the 1,300 barrier and the Jan high of 1,307, the chart is showing a
significant bullish breakout pattern on the technical landscape.

♦ Besides, the recent positive crossover between the 10-day and 40-day SMAs, both near 1,285 and 1,277, also
shows more upside potential in the short- to medium-term .

♦ This indicates a good chance of covering a technical gap near 1,348 soon. The gap was formed in Jan 2008.

♦ Clearing this will lead to another technical gap near 1,373 and the next crucial hurdle at 1,390.

♦ In the meantime, we peg the immediate support at its gap near 1,305 - 1,311, followed by 1,300.

Daily Trading Strategy:

♦ Yesterday’s performance suggests further run-up potential towards the next target at a technical gap near 1,348.

♦ Traders should stay “long” amid expectation of a further follow-through rally ahead.

♦ The FKLI is likely to range around 1,315 to 1,333 today, in our view.

Table 3: FKLI Closings

FKLI (Month)
Contracts Open High Low Close Chg (Pts) Settle Volume Open Interest
Mar 10 1312.50 1328.00 1311.00 1323.50 20.50 1323.50 6608 16650
Apr 10 1309.00 1325.50 1309.00 1321.50 21.50 1321.50 555 426
Jun 10 1305.00 1322.00 1304.50 1317.50 21.00 1318.00 210 555
Sep 10 1303.00 1319.00 1303.00 1317.00 22.50 1317.50 86 121

Source: Bursa Malaysia

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 9 March 2010

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

US Market Leads:

♦ US stocks finished mixed on Monday, but technology stocks like Research In Motion and Cisco Systems leading
the Nasdaq Composite Index higher on analysts’ upgrades.

♦ Earlier, the market responded positively to American International Group Inc’s (AIG) announcement of
US$15.5bn sale of its unit to MetLife.

♦ However, profit-taking activities emerged following healthcare-related stocks, including Pfizer and UnitedHealth
turned lower after the US President Barack Obama criticized insurance premium increases, continuing his final
push to overhaul the medical industry.

♦ In the meantime, the US light sweet crude oil for Apr delivery rebounded further by another US$0.37 or 0.5% to
US$81.87/barrel on the recent positive US economic data.

Technical Interpretations:

Dow Jones Industrial Average (DJIA)

♦ After climbing to 10,587.74 high, the US DJIA retreated on mild profit-taking pressure, ending down 13.68 pts or
0.13% to 10,552.52.

♦ The formation of a potential “evening star” candle suggests a slowdown in the recent bullish momentum.

♦ This could translate to a temporary retreat. But judging from the recent strong uptrend momentum, a rechallenge
to the Jan high of 10,729.89 is still possible if buyers return swiftly.

♦ On the downside, we continue to see strong support near the 21-day SMA of 10,290.

Nasdaq Composite (Nasdaq)

♦ The Nasdaq Composite Index hit another fresh 18-month high yesterday with a 5.86 pts or 0.25% gain to
2,332.21.

♦ A closing at slightly above the key resistance barrier of 2,330 spells a likely bullish technical breakout ahead.

♦ However, it must chalk up another confirmation candle at above 2,330 today in order to push for further rally
towards 2,470. Mild support is seen near a technical gap of 2,293.16.

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Daily Technical Watch:
Chart 7: L&G Daily Chart 8: L&G Intraday

Land & General (3174)

Recrossing the 40-day SMA will confirm a technical rebound…

♦ After staging a sharp rally from below the RM0.36 level in early Jan 2010, to a more than three year high of
RM0.64, the share price of L&G triggered a strong profit-taking pressure.

♦ The stock eased to below the RM0.56 level in late Jan and even lost the RM0.50 solid support level and the 40-
day SMA support nearby in Feb. The development has damaged its medium-term technical outlook created since
the sharp rally in Jan 2010.

♦ However, after hitting a low of RM0.44 in early Mar, buyers returned as the momentum indicators recovered,
enabling the stock to chalk up two consecutive positive candles on the chart of late.

♦ As the stock ended slightly higher than RM0.50, at RM0.505, it will likely stage further upside if it manages to
sustain above the immediate level of RM0.50.

♦ A recrossing of the 40-day SMA near RM0.52 will confirm a technical rebound on the stock, which will lead it to
the RM0.56 important resistance level soon.

♦ Technically, it is expected to face significant resistance pressure near the RM0.56 – RM0.635 region.

♦ Its technical readings will turn negative if it drops to below the RM0.50 immediate support level.

Technical Readings:

♦ 10-day SMA: RM0.4725

♦ 40-day SMA: RM0.519

♦ Support: IS = RM0.50 S1 = RM0.425 S2 = RM0.36

♦ Resistance: IR = RM0.56 R1 = RM0.635

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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
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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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