PP 7767/09/2010(025354)

Malaysia Technical Research

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

W e e kl y T e ch ni ca l V ie w p o int
12 April 2010
MARKET DATELINE

Commodities & Currencies

More Likelihood Of A Rebound On CPO This Week…

Chart Performance on Key Commodities:

Light Sweet Crude Oil futures (Crude)

Chart 1: Light Sweet Crude Oil Futures Weekly

♦ As expected, the US Light Sweet Crude oil futures

headed higher to retest the tough resistance level at
US$87 last week.

♦ However, the crude failed to penetrate US$87 as it

retreated on strong profit-taking pressure.

♦ The crude registered a possible “evening star” candle,

indicating a likely retreat from the recent uptrend.

♦ Nevertheless, we remain optimistic as the momentum

indicators turned more upbeat recently.

♦ As such, we estimate a mild pullback towards US$80,

before the reemergence of buying momentum, leading
to another challenge of US$87 in the near term.

♦ Our medium-term target stays at US$87–100 region.

Crude Palm Oil futures (CPO)

Chart 2: Crude Palm Oil Futures Weekly

♦ The crude palm oil futures (CPO) marginally breached to

below the RM2,500 level on intra-week, but managed to
end at above the psychological level last week.

♦ The CPO registered a second “hammer-like” candle,

suggesting a strong will to stage a technical rebound
soon.

♦ A close above the 10-week SMA of RM2,588, and a

marginal “buy” signal on the neutralised stochastic
oscillators suggest an imminent rebound this week.

♦ As such, we remain positive and maintain that the

RM2,500 tough support level will hold up the
commodity’s medium-term uptrend.

♦ Upon a successful rebound, it will revisit the recent high

of RM2,722, before heading to the RM2,760 hurdle.

Please read important disclosures at the end of this report.

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Chart Intepretations On Selective Currencies:

Chart 3: RM/US$ Weekly Ringgit (RM)/US$

♦ We were right again last week, when we expected

more strengthening on the ringgit against the
greenback.

♦ The currency breached below the 3.29 level earlier and

recorded two huge bearish candles on the RM/US$
chart, pointing to more immediate-term weakness on
the US$ ahead.

♦ Although both the momentum indicators have reached

the “oversold” region on the chart, the ringgit could
strengthen further on follow-thorugh buying support
this week, in our view.

♦ We stay bullish on ringgit’s short- to medium-term

outlook with a target of 3.07 against the US$.

♦ For the US$ to regain its footing, it must reclaim 3.29,

or at least register a small positive candle this week.

Chart 4: JPY/US$ Weekly Japanese Yen (JPY)/US$

♦ The JPY/US$ chart halted its recovery trend, as it

registered a negative candle on the chart last week,
after registering two bullish candles that breached the
crucial Downtrend Resistance Line (DRL).

♦ On the chart, the yen regained its strength against the

US$ last week, just before testing the crucial level at
95.5.

♦ Last week’s closing has dragged down the 14-week

RSI, and forced the pair to close marginally below the
60-week SMA near 93.39.

♦ Without a clear breakout from 95.5, the recent

strength on the US$ might not be able to extend any
further against yen, in our view.

♦ Chart support is now at the DRL near 90.

Chart 5: EUR/US$ Weekly Euro Dollar (EUR)/US$

♦ The EUR/US$ pair continued to face significant

resistance despite having removed the 0.73 level
earlier.

♦ The pair recorded a “shooting star doji-like” candle,

indicating a possible retreat soon.

♦ Coupled with the weaker momentum readings, the

EUR is likely to stage a small rebound in the near term
against the US$, chart wise.

♦ However, the pair is likely to sustain at above the 0.73

breakout point, in our view.

♦ The US$ strength against EUR remains strong as long

as the pair sustains at above 0.73.

♦ Further hurdle for the US$ is at the 0.77 – 0.80 zone.

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 US Dollar Index (DXY)
Chart 6: US Dollar Index Weekly

♦ The US Dollar index (DXY) sustained at above the

breakout point of 81 for the third week on Friday,
despite registering a small negative candle.

♦ Chart wise, with a weakened reading on the stochastic

oscillators and the flattish 14-week RSI, the index may
risk falling back to below the 81 level this week.

♦ However, as it still sustains at above 81, we are

keeping our bullish view on the dollar index, for now.

♦ If the index falls to below 81, it will mean a possible

false breakout signal earlier. This will reverse our
positive view on the dollar index.

♦ But now, we are still eying on the region of 85 – 89

target for the resumption of the previous uptrend.

♦ Lower support is at 78 and the 21-week SMA at 79.

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
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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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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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