PP 7767/09/2010(025354)

2
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

29 June 2010
MARKET DATELINE

Market Technical Reading

Negative-Biased View Remains...

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

Local Market Leads:

♦ Share prices in Bursa Malaysia traded almost flat on a quiet Monday, as the absence of trading leads forced
investors to stay further at bay.

♦ The benchmark FBM KLCI lost a marginal 0.91 pt or 0.07% to 1,325.54 with razor thin trading volume. The index
traded in the negative territory throughout the day.

♦ In the regional markets, HSI gained 0.17%, while Nikei 225 and SHComp fell 0.45% and 0.69% respectively, on
mixed sentiment following the poor closing in the US markets on Friday.

♦ The regional investors also overlooked Sunday’s pledge by the G20 leaders that they would halve their deficits by
2013, and stick to the 2012 plans to implement tougher capital and liquidity standards for banks.

♦ Speculative lower liners like Time (+3.5sen), BjCorp (-13sen) and KEuro (+7sen) attracted some trading
interests, but the general market remained listless. Losers led gainers by 340 to 227, with a total of 535m shares
changing hands for the day.

Technical Interpretations:

♦ In line with our expectation, the FBM KLCI traded in a narrower range on Monday, ended less than a point lower
with a “negative harami” candle on the chart, indicating yet another sign of sideways trading ahead.

♦ As turnover shrinks, the index continued to move sideways, reflecting its indecisiveness on its near-term trend
direction.

♦ With the stochastic oscillators continued to slide lower, the index may see fresh downside risk ahead if it slips to
below the ascending 10-day SMA near 1,319 soon.

♦ If that occurs, it will dampen its near-term trend and potentially sink the 10-day SMA back to below the 40-day
SMA in the near term.

Please read important disclosures at the end of this report.

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Daily Trading Strategy:

♦ Although the FBM KLCI seemed to be supported at the current level, the index’s technical landscape is fast
deteriorating due to the sluggish sentiment and the poor level of participation of late, in our view.

♦ As such, we see a looming fear that the index may slowly drift to below the ascending 10-day SMA in the next
few sessions, should there be no fresh buying momentum.

♦ Not only that, the weak momentum readings and the candlestick pattern point to a risk of a fresh “sell” signal to
be triggered soon.

♦ As a result, we maintain our negative-biased view on the FBM KLCI, despite expectation of further sideways
movement due to continuous buying support on selected heavyweights for mild mid-year window-dressing
activities ahead.

♦ Immediate support levels are seen at the supportive 10-day and 40-day SMAs near 1,319 and 1,309, followed by
the stronghold psychological level at 1,300.

♦ For the market to regenerate strong upward momentum, it must retake the 1,350 resistance zone with strong
volume participation.

Table 2 : Major Indices & Commodities

Table 1 : Daily Statistics Change Change
Scoreboard 22 June 23 June 24 June 25 June 26 June Local Key Indices Closing
(Pts) (%)
Gainers 226 360 318 251 227 FBM KLCI 1,325.54 -0.91 -0.1
Losers 434 275 332 370 340 FBM 100 8,717.90 -9.86 -0.1
Unchanged 255 271 294 278 241 FBM ACE 3,834.18 -32.72 -0.8
Untraded 446 456 418 463 505 Major Overseas
Indices
Market Cap Dow Jones 10,138.52 -5.29 -0.1
Turnover Nasdaq 2,220.65 -2.83 -0.1
(mln shares) 673 685 749 568 535 S&P 500 1,074.57 -2.19 -0.2
Value (RM FTSE 5,071.68 25.21 0.5
mln) 1,100 1,118 1077 923 778 Hang Seng 20,726.68 35.89 0.2
Jakarta Composite 2,955.73 8.71 0.3
Currency Nikkei 225 9,693.94 -43.54 -0.4
MYR vs US Seoul Composite 1,732.03 2.19 0.1
Dollar 3.1990 3.2335 3.2310 3.2430 3.2230 Shanghai Composite 2,535.28 -17.54 -0.7
SET 804.4 10.73 1.4
Source: RHBInvest & Bloomberg FT Straits Times 2,869.99 18.35 0.6
Taiwan Weighted 7,500.79 26.08 0.3
India Sensex 17,774.26 199.73 1.1
Major Commodities
NYMEX Crude Oil
(US$/barrel) 78.25 -0.37 -0.5
MDEX CPO – Third
Month (RM/metric ton) 2,400.00 16.00 0.7
US Interest Rate Current Last Updated
22-23 Jun
Overnight Fed Fund Rate 0-0.25% Unch
2010
Next FOMC meeting 10 Aug 2010

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Chart 3: FKLI Daily Chart 4: FKLI Intraday

Technical Interpretations:

♦ In contrast to what happened in the cash market, the local futures market traded firmly on Monday.

♦ The FKLI for Jun contract opened almost flat, but a series of buying leg in the early session and the late afternoon
lifted it to end the day handsomely.

♦ At the close, the FKLI for Jun contract ended up 7.5 pts or 0.57% to 1,332.5, with a second positive candle
registered on the chart.

♦ Technically, yesterday’s closing indicates a smooth technical recovery from the recent retreat to the 10-day SMA
support.

♦ A successful follow-through buying support will push the FKLI towards the recent high of 1,342, before it can
rechallenge May’s high of 1,352.5.

♦ However, as the momentum readings remain mixed, and the trading sentiment in the cash market stays sluggish,
upside potential could be limited, in our opinion.

♦ On the downside, the 10-day and 40-day SMAs near 1,322 and 1,309 will support the immediate downside,
followed by the tough 1,300 level.

Daily Trading Strategy:

♦ The candlestick pattern registered yesterday has improved the immediate-term outlook for the FKLI.

♦ Traders can now expect a retest to the recent high of 1,342, based on firm support at the 10-day SMA.

♦ We expect the futures index to fluctuate from 1,326 to 1,340 today.

Table 3: FKLI Closings

FKLI (Month)
Contracts Open High Low Close Chg (Pts) Settle Volume Open Interest
Jun 10 1324.50 1332.50 1322.50 1332.50 7.50 1332.00 6402 14523
Jul 10 1325.00 1333.00 1323.50 1332.50 7.00 1333.00 5431 6517
Sep 10 1323.50 1330.00 1323.50 1329.50 4.00 1331.00 64 515
Dec 10 1328.00 1330.00 1326.00 1330.00 4.00 1330.50 16 191

Source: Bursa Malaysia

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

US Market Leads:

♦ US stocks ended modestly lower on Monday, as investors generally remained cautious ahead of the key economic
data due later this week.

♦ Sentiment improved slightly on a report of 0.4% hike in personal income in May, while personal spending rose
0.2%, as compared to the forecasts of a 0.1% increase. But the choppy session ended relatively flat, as investors
were nervous on the major economic direction going forward.

♦ This week will bring on the reports on home prices in 20 major US cities, consumer confidence figure as well as
manufacturing and the key monthly jobless reports.

♦ Meanwhile, the US light sweet crude oil futures for August delivery eased 90cents to US$77.96 a barrel in Nymex.

Technical Interpretations:

Dow Jones Industrial Average (DJIA)

♦ The US DJIA recorded another “doji-like” candle, as it struggled near the important support level of 10,150 on
Monday.

♦ The index finished down 5.29 pts or 0.05% to 10,138.52.

♦ Although the two “doji” candles registered near the key support level could suggest a potential “tweezer bottom”,
which means the index may rebound in the near term, uncertainties remain as momentum indicators stay weak.

♦ A slip from the current level may turn the outlook into a bearish zone, pointing towards the 10,000 psychological
level and threatens more selldown towards the 9,200 – 9,700 lower support region.

Nasdaq Composite (Nasdaq)

♦ The Nasdaq Composite index lost 2.83 pts or 0.13% to 2,220.65 on Monday, and recorded a potential “tweezer
bottom” candle on the chart. The pattern suggests a likely technical rebound soon.

♦ However, the index has remained at below the 21-day SMA support of 2,247. This implies a negative outlook
ahead.

♦ Given the poor momentum readings of late, it could still slip lower to below the 2,190 critical support level if
selling resumes in the near term. Next key support is only seen at 2,000 and 2,100.

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Daily Technical Watch:

Chart 7: Time Daily Chart 8: Time Intraday

Time Engineering (4456)

Failure to retake RM0.40 will lure in profit-taking pressure…

♦ The share price of Time spiked up to a nearly two-year high of RM0.59 in Nov 2009, but was snapped with a
sudden profit-taking move, that pressed the stock to a low of RM0.385 in Dec 2009.

♦ Later, the stock was engaged in a series of volatile swings, mostly launched from the key support region of
RM0.40. But, progressively the stock recorded lower highs at RM0.50 in Jan 2010 and RM0.445 in Mar 2010.

♦ As the technical momentum deteriorated further, it lost the support of RM0.40 in May and slid to the RM0.31 low.

♦ However, since then, it encountered steady buying support, recovering smoothly back to above the RM0.355 key
support level in recent trading.

♦ It surged to RM0.395 yesterday, with a huge bullish candle to RM0.395, after hitting an intraday high of RM0.41.

♦ The stock, coupled with the double tick-up signals on the momentum indicators and a marginal cut of the 10-day
SMA to above the 40-day SMA, could stage further rally ahead if it crosses the key level of RM0.40 again today.

♦ However, investors must be warned that in the event if it fails to retake RM0.40, sharp profit-taking pressure
may set in, forcing a sharp pullback on the share price in the next few sessions. Immedaite support is at
RM0.355.

♦ Nevertheless, a successful rally will chart a further run-up towards the RM0.445 and RM0.50 resistances on
follow-through buying support.

Technical Readings:

♦ 10-day SMA: RM0.362

♦ 40-day SMA: RM0.3599

♦ Support: IS = RM0.355 S1 = RM0.295 S2 = RM0.26

♦ Resistance: IR = RM0.40 R1 = RM0.445 R2 = RM0.50

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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
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.

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