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

22 June 2010
MARKET DATELINE

Market Technical Reading

1,347 – 1,350 Region To Cap Near-term Upside...

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

Local Market Leads:

♦ Boosted by the positive regional market sentiment, share prices in Bursa Malaysia continued to climb higher as
risk appetite increased amongst local investors. This occurrded after Chinese central bank announced during the
weekend that the country would gradually increase renminbi’s flexibility.

♦ Investors rushed in to collect key heavyweight stocks like CIMB (+17sen), Maybank (+15sen) and Sime (+17sen),
leading the benchmark FBM KLCI to close higher at 1,335.29, gaining a lofty 17.6 pts or 1.34% on Monday.

♦ Regional indices led by Hang Seng Index (+3.1%), SHComp (2.9%) and Nikkei 225 (+2.4%) also closed higher
on strong buying momentum.

♦ The lower liners were also actively traded, thanks to the strong retail participation. IRCB gained 10.5sen, while
Gamuda-WD and KEuro gained 17sen and 9.5sen respectively.

♦ Overall trading volume increased significantly to 921m shares compared to Friday’s 538m shares. Market breadth
turned more positive, with 591 gainers against 161 losers.

Technical Interpretations:

♦ For the day, the FBM KLCI registered another bullish candle on the chart, indicating a likelihood of follow-
througbh buying momentum today.

♦ Also, the creations of another technical gap yesterday plus the upbeat momentum readings on the indicators
have suggested a stronger buying momentum ahead.

♦ Technically, the index is poised to cover the final technical gap from 1,341.23 – 1,344.27, before rechallenging
the tough resistance zone of 1,347 – 1,350. The year’s high of 1,349.92 was recorded in early May.

♦ All said, we expect the index to meet significant resistance near the 1,347 – 1,350 region.

♦ A firm stronghold is seen at the 1,300 psychologicla level, near the 10-day SMA at 1,302.

Please read important disclosures at the end of this report.

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 22 June 2010

Daily Trading Strategy:

♦ As the FBM KLCI rebounded further to above the 1,300 level last week and surpassed the 40-day SMA of 1,311,
the index has moved back into the higher trading zone from 1,300 to 1,350.

♦ Given yesterday’s bullish candle on the chart, plus the positive readings on the momentum indicators, the index
appears ready to retest the 1,347 – 1,350 tough resistance zone in the immediate term.

♦ If the buying sentiment continues to improve today, the index is likely rise further today.

♦ However, we believe the 1,347 – 1,350 resistane zone should cap near-term advances on the FBM KLCI.

♦ Until and unless this resistance is being removed convincingly, we are of the view that the index will trade within
a range from 1,300 to 1,350.

Table 2 : Major Indices & Commodities

Table 1 : Daily Statistics Change Change
Scoreboard 15 June 16 June 17 June 18 June 21 June Local Key Indices Closing
(Pts) (%)
Gainers 296 494 295 416 591 FBM KLCI 1,335.29 17.60 1.3
Losers 291 174 277 193 161 FBM 100 8,769.13 116.70 1.3
Unchanged 270 240 294 278 208 FBM ACE 3,923.09 47.36 1.2
Untraded 512 460 502 481 401 Major Overseas
Indices
Market Cap Dow Jones 10,442.41 -8.23 -0.1
Turnover Nasdaq 2,289.09 -20.71 -0.9
(mln shares) 512 663 516 538 921 S&P 500 1,113.20 -4.31 -0.4
Value (RM FTSE 5,299.11 48.27 0.9
mln) 891 1,012 757 1,160 1,515 Hang Seng 20,912.18 625.47 3.1
Jakarta Composite 2,941.90 12.31 0.4
Currency Nikkei 225 10,238.01 242.99 2.4
MYR vs US Seoul Composite 1,739.68 27.73 1.6
Dollar 3.2690 3.2590 3.2640 3.2490 3.1965 Shanghai Composite 2,586.21 72.99 2.9
SET 806.07 14.22 1.8
Source: RHBInvest & Bloomberg FT Straits Times 2,885.64 52.24 1.8
Taiwan Weighted 7,635.56 142.45 1.9
India Sensex 17,876.55 305.73 1.7
Major Commodities
NYMEX Crude Oil
(US$/barrel) 77.82 0.64 0.8
MDEX CPO – Third
Month (RM/metric ton) 2,405.00 5.00 0.2
US Interest Rate Current Last Updated
27-28 Apr
Overnight Fed Fund Rate 0-0.25% Unch
2010
Next FOMC meeting 22-23 June 2010

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 22 June 2010

Chart 3: FKLI Daily Chart 4: FKLI Intraday

Technical Interpretations:

♦ Thanks to the positive regional markets sentiment, the local futures market advanced for the fourth day in a row.
The FKLI for Jun contract gained a powerful 23pts or 1.74% to 1,341.50 on Monday.

♦ On the chart, the FKLI opened with a huge 10-pt technical gap from 1,320 – 1,330 yesterday, before heading to
a day high of 1,342 and closed at 1,341.50.

♦ Closed with its fourth positive candle yesterday, the futures index could extend its upside today, for a retest of
the 1,350 resistance level and the early May’s high of 1,352.5 soon.

♦ However, the “extremely overbought” position on the stochastic oscillators post a threat of an immediate chart
pullback if the futures index fails to cross over the 1,350 level in the immediate term.

♦ That, if it occurs will sink the futures index on sharp profit-taking pressure, causing it to drop to cover the huge
technical gap created yesterday.

♦ Chart wise, a firm support is at 1,300, near the 10-day and 40-day SMAs at 1,304 and 1,310.

♦ But, should it breach the 1,350 level unexpectedly, it could charge further to 1,390 on follow-through buying
support.

Daily Trading Strategy:

♦ Although the short-term technical outlook has turned bullish, traders should beware of the resistance near 1,350.

♦ A failure to remove 1,350 will still trigger a significant selling pressure to cover the huge technical gap created
yesterday.

♦ Nevertheless, key support region should be seen near the 10-day and 40-day SMAs and the 1,300 key level.

♦ We foresee the FKLI to linger from 1,335 to 1,350 today.

Table 3: FKLI Closings

FKLI (Month)
Contracts Open High Low Close Chg (Pts) Settle Volume Open Interest
Jun 10 1335.50 1342.00 1330.00 1341.50 23.0 1341.50 8498 18531
Jul 10 1330.00 1342.00 1330.00 1342.00 23.0 1341.50 691 725
Sep 10 1332.50 1341.00 1328.50 1341.00 24.0 1341.00 244 455
Dec 10 1333.00 1340.00 1327.00 1339.00 23.5 1339.00 64 212

Source: Bursa Malaysia

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 22 June 2010

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

US Market Leads:

♦ US markets rallied in early trading on Monday, on optimism that more flexible yuan would lead to a better
economic recovery prospect going forward, following solid gains in Asian and European markets on Monday.

♦ However, the gains were eroded on strong return of selling activities, pressing the key DJIA to the negative
territory. The US DJIA, Nasdaq and S&P 500 all closed marginally lower yesterday.

♦ Pessimism returned when investors thought the plan would lead to higher costs on imports from China, which
could weigh down retailer stocks. Wal-Mart Store closed 1% lower.

♦ Meanwhile, the US light sweet crude oil futures for July delivery gained US$0.64 or 0.08% to US$77.82/barrel in
Nymex.

Technical Interpretations:

Dow Jones Industrial Average (DJIA)

♦ The US DJIA reversed its early gain of 143.52 pts to close slightly negative yesterday at 10,442.41, losing 8.23
pts or 0.08% for the day. It registered a “shooting star” candle, indicating a clear signal of a potential reversal
from the recent rally.

♦ Coupled with the stochastic oscillators that triggered a “sell” signal from the grossly “overbought” region and the
flattish 14-day RSI, its upside appears exhausted.

♦ While the DJIA remains within the 10,150 – 10,850 trading range, and could still attract buying support towards
the resistance level in the near term, a solid support is near 10,150 at the 21-day SMA that will buffer any
pullback, in our view.

Nasdaq Composite (Nasdaq)

♦ The Nasdaq Composite registered a huge “bearish engulfing” candle yesterday, despite a successful cross to
above the key resistance level of 2,330 to 2,341.11 on the intraday basis.

♦ Plus the fresh “sell” signal on the stochastic oscillators and a dip on the 14-day RSI, the index is poised for a
technical pullback today.

♦ With yesterday’s trading, the index remains stuck within the range of 2,190 to 2,330 in the near term, in our
view.

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

CIMB Group Holdings (1023)

Retesting the UTL near RM7.25 and the RM7.41 key technical hurdle soon…

♦ After its 10-day SMA cut above the 40-day SMA near RM3.10 in Mar 2009, the share price of CIMB has been
trending along the Uptrend Line (UTL).

♦ The stock almost lost the UTL in early Feb 2010, when it fell to below the RM6.00 support level near the UTL, just
to stage a technical rebound swiftly and revived its upward momentum.

♦ It turned around and broke the RM6.70 key resistance level, before heading into a higher trading range from
RM6.70 to RM7.41.

♦ But, as it failed to penetrate the RM7.41 technical hurdle in Apr 2010, it eased lower with a consolidation phase,
and later fell to below the supportive UTL in May 2010, before hitting a low of RM6.58, below the key support of
RM6.70.

♦ However, it again, launched a timely technical rebound, and recovered to above the 10-day and 40-dya SMAs in
the recent trading. It closed yesterday with another bullish candle at RM7.12.

♦ Furnished with a “double buy” signal on the momentum indicators and the upbeat trend on the 10-day SMA, the
stock is poised to see follow-through buying momentum in the near term.

♦ We expect a retest of the UTL near RM7.25 soon, before the stock gears up to rechallenge the key resistance of
RM7.41.

♦ Removing these hurdles will spell a bullish breakout pattern, hence leading the stock into an uncharted territory
on further buying support.

Technical Readings:

♦ 10-day SMA: RM6.929

♦ 40-day SMA: RM6.989

♦ Support: IS = RM6.70 S1 = RM6.00 S2 = RM5.43

♦ Resistance: IR = RM7.25 R1 = RM7.41

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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
strategy will depend on an investor’s individual circumstances and objectives. Neither RHBRI, RHB Group nor any of its affiliates, employees or agents accepts
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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
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“Connected Persons” means any holding company of RHBRI, the subsidiaries and subsidiary undertaking of such a holding company and the respective directors,
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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.

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