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

27 May 2010
MARKET DATELINE

Market Technical Reading

More To Stay Sideline Ahead Of The Long Weekend...

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

Local Market Leads:

♦ Dragged by the last minute selloff on the heavyweights stocks, the FBM KLCI reversed its early gains and turned
lower for the ninth straight day on Wednesday.

♦ Although the local benchmark index traded in the positive territory for most of the day amid strong rebound in
the overseas markets, it ended negatively after investors dumped stocks like GenM (-15sen), Sime (-14sen) and
Maybank (-8sen) in late trading hour yesterday.

♦ This caused the FBM KLCI to fall another 1.19 pts or 0.10% to 1,248.94, below the key 1,250 support level.

♦ Turnover was flat at 930m shares and the market breadth turned positive for the first time in six trading days
with 426 advancers outpacing 320 decliners.

♦ Elsewhere, regional investors turned positive on the late recovery in the US markets, which have successfully
shrugged off a nearly 3% slide in the early session.

♦ Leading the regional markets was Jakarta Composite index that has rallied 7.27% yesterday.

Technical Interpretations:

♦ Despite a strong opening, profit-taking pressure set in and hammered the FBM KLCI into the negative territory on
the final minute of trading.

♦ While the “8 to 10 candles pattern” and the extremely oversold momentum readings still point to a possible
reversal today, the fresh breakdown from 1,250 signals a likely resumption of selling activities soon.

♦ Without an immediate rebound to above 1,250, the FBM KLCI will extend its bearish corrective wave towards the
23.6% Fibonacci Retracement (FR) level at 1,229 and the 1,200 psychological level in the near term.

♦ 1,250 is now an immediate resistance level for the index, followed by the technical gap near 1,290.51 – 1,300.44
and the solid 1,300 support-turn-resistance hurdle.

Please read important disclosures at the end of this report.

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 27 May 2010

Daily Trading Strategy:

♦ Due to the last-minute selldown in selective heavyweights, the FBM KLCI has missed a good chance to stage a
technical recovery leg.

♦ With the ninth negative candle in a row, plus a breach to below the immediate support of 1,250 yesterday, the
index is poised to see a return of selling activities in the near term.

♦ Though the index may still rise today based on the “8 to 10 candles” pattern formation, the weaker momentum
readings suggests that chances are lower now.

♦ Instead, the index could head towards the first correction target near the 23.6% FR level at 1,229 and the 1,200
pyschological threshold soon, if selling resumes and the index is kept at below 1,250 today.

♦ Therefore, we continue to stay bearish, and expect investors to stay sideline pending the long weekend holiday
ahead. The financial markets in Malaysia will be closed for Wesak day on Friday.

Table 2 : Major Indices & Commodities

Table 1 : Daily Statistics Change Change
Scoreboard 20 May 21 May 24 May 25 May 26 May Local Key Indices Closing
(Pts) (%)
Gainers 250 145 252 82 426 FBM KLCI 1,248.94 -1.19 -0.1
Losers 449 678 415 846 320 FBM 100 8,180.33 0.60 0.0
Unchanged 274 169 285 152 265 FBM ACE 3,689.21 38.19 1.0
Untraded 405 384 421 293 361
Major Overseas
Market Cap Indices
Turnover Dow Jones 9,974.45 -69.30 -0.7
(mln shares) 765 886 662 941 930 Nasdaq 2,195.88 -15.07 -0.7
Value (RM S&P 500 1,067.95 -6.08 -0.6
mln) 1,415 1,764 1,287 1,787 2,109 FTSE 5,038.08 97.40 2.0
Hang Seng 19,196.45 210.95 1.1
Currency Jakarta Composite 2,696.78 182.66 7.3
MYR vs US Nikkei 225 9,522.66 62.77 0.7
Dollar 3.2720 3.3180 3.3180 3.3610 3.3200 Seoul Composite 1,582.12 21.29 1.4
Shanghai Composite 2,625.79 3.16 0.1
Source: RHBInvest & Bloomberg SET 728.94 7.65 1.1
FT Straits Times 2,696.02 45.41 1.7
Taiwan Weighted 7,167.35 80.98 1.1
India Sensex 16,387.84 365.36 2.3
Major Commodities
NYMEX Crude Oil
(US$/barrel) 71.51 2.76 4.0
MDEX CPO – Third
Month (RM/metric ton) 2,452.00 16.00 0.7
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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 27 May 2010

Chart 3: FKLI Daily Chart 4: FKLI Intraday

Technical Interpretations:

♦ Tracking the bullish tone on the overseas sentiment, the local futures index snapped the recent sharp correction
and closed positively for the first time in nine trading days yesterday.

♦ However, its gains were limited by the last-minute selloff in the cash index, prompting the FKLI to retreat in late
session. The index touched a day high of 1,261.50 (+20.5 pts) earlier.

♦ Upon closing, the FKLI for May contract rose 12.00 pts or 0.97% to 1,253.00.

♦ On the chart, the FKLI registered a “negative harami” candle suggesting a possible reduction on the recent selling
momentum, but it fell short of showing a reliable sign for a possible technical rebound ahead.

♦ Moreover, as the FKLI gave up its early gain yesterday, it has failed to cover a technical gap near 1,263 to 1,269,
and this also indicates that the futures index lacks follow-through buying support.

♦ With four breakway gaps registered on the chart in less than two weeks, the futures index is showing a clear
signal that it is due to be derated further in the near term.

♦ Traders should stay cautious if the FKLI fails to recapture the support-turn-resistance level at 1,270 soon.

♦ We expect the futures index to resume its downswing upon losing yesterday’s low of 1,249.50.

♦ The next downside target is at the 1,200 psychological level for the FKLI.

Daily Trading Strategy:

♦ We prefer to stay cautious in anticipation of a resumption of selling activity.

♦ Our downside target stays at 1,200, with an immediate resistance level at 1,270.

♦ Today’s trading range is expected to be near 1,235 to 1,253.

Table 3: FKLI Closings

FKLI (Month)
Contracts Open High Low Close Chg (Pts) Settle Volume Open Interest
May 10 1256.00 1261.50 1249.50 1253.00 12.00 1253.00 12211 20135
Jun 10 1256.00 1259.50 1247.50 1253.00 14.00 1253.00 7350 5331
Sep 10 1252.00 1259.00 1246.00 1250.50 14.00 1251.00 302 391
Dec 10 1252.00 1260.00 1248.00 1251.00 13.50 1251.50 68 247

Source: Bursa Malaysia

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 27 May 2010

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

US Market Leads:

♦ After enjoying a triple-digit gain in the early session, US DJIA succumbed to late selling pressure on concerns that
China may review its investment in eurozone’s debt holdings.

♦ According to the Financial Times’s news report, China’s State Administration of Foreign Exchange has met with
foreign bankers recently and it has expressed concern about its exposure to the five euro-zone markets of Greece,
Ireland, Italy, Portugal and Spain.

♦ In response, investors quickly sold off their positions and pushed the DJIA to below the 10,000 threshold, while
the euro fell to below 1.22 dollar in late session. Microsoft stood out as the key loser, tumbling 4.1% after its CEO
warned that the effect of the Eurozone debt crisis won’t be isolated to Europe only.

♦ Boosted by stronger oil demand and rising risk appetite on riskier assets, the US light sweet crude oil futures for
July delivery bounced back strongly by US$2.76 or 4.0% to US$71.51/barrel.

Technical Interpretations:

Dow Jones Industrial Average (DJIA)

♦ Dragged down by the late selling activities, the US DJIA turned down from its intraday high of 10,179.03 by
ending 69.30 pts or 0.69% lower to 9,974.45 on Wednesday.

♦ By recording a bearish candle, it has overshadowed the previous “hammer” candle to mark a continuation on the
selling momentum in the near term.

♦ As it is now traded below 10,150 and the 10,000 level, it is facing higher risk for further downside adjustment,
with the immediate support at Tuesday’s low of 9,774.48, followed by the lower support region at 9,200 – 9,700.

Nasdaq Composite (Nasdaq)

♦ After climbing to 2,257.33 high, the Nasdaq Composite Index bowed to late selling pressure, losing 15.07 pts or
0.68% to 2,195.88 on Wednesday.

♦ Though the stochastic oscillators recovered, the bearish candle and the weak 14-day RSI on the chart suggest
more selling is underway.

♦ Therefore, a retest of 2,190 today is almost imminent. Losing this important support level will unleash another
selling leg towards the next support region of 2,000 – 2,100.

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

UEM Land Holdings (5148)

Stuck within RM1.15 –RM1.46 trading region…

♦ After a successful rally launched from Apr last year, the share price of UEMLand hit a solid resistance at RM1.65
in Jun, but the stock fell back to a low of RM1.05 shortly after that.

♦ However, the stock managed to kick-off a technical rebound and retested a resistance at RM1.46 in Jul 2009.

♦ But, as it failed to cross the hurdle, it began trading sideways with a volatile range from a support of RM1.15 –
RM1.24 to a resistance of RM1.46.

♦ The stock briefly surpassed the resistance at RM1.46 in Apr 2010, but lost the level again on profit-taking
activities.

♦ In recent trading, it tried to bounce up from the support at RM1.24, but ended yesterday at RM1.33, with a “doji”
candle following a negative candle earlier. This indicates indecisiveness on its immediate-term direction.

♦ Chart wise, the stock was trying to rebound towards the RM1.46 resistance level again in the near term.
However, the candlesticks pattern suggests the lack of follow-through buying support.

♦ In our view, it must sustain at above the 10-day SMA near RM1.30 before it could turn even more positive to
above the 40-day SMA of RM1.39, for a further test of the RM1.46 significant hurdle.

♦ Should it fall below the 10-day SMA again in the next few sessions, it will quickly turn back into a cautious mode,
hence trading towards the support region of RM1.15 – RM1.24 again.

♦ In general, it is still stuck within RM1.15 - RM1.46 trading range.

Technical Readings:

♦ 10-day SMA: RM1.297

♦ 40-day SMA: RM1.392

♦ Support: IS = RM1.24 S1 = RM1.15 S2 = RM0.85

♦ Resistance: IR = RM1.46 R1 = RM1.65

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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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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
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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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