PP 7767/09/2010(025354)

RHB Research

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

Dail y Trad ing St rat eg y

MARKET DATELINE 13 September 2010
Market Technical Reading
Next Resistance Only At 1,524.69!

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

Local Market Leads:

♦ Share prices in Bursa Malaysia gained on Monday, as investors played catch-up after a long-weekend holiday while
the regional markets have continued to climb in late last week.

♦ The strong regional markets’ performance yesterday also lifted the local trading sentiment, though not all of
investors have returned from their Hari Raya break.

♦ Over the weekend, China announced that its industrial activities and retail sales were stronger than expected, the
figures rose 13.9% and 18.4% yoy in Aug, while inflation rate was in line with expectation at 3.5%.

♦ Amongst the regional bourses, TWSE rose 2.5% and HSI climbed 1.9%, while STI added 1.5% for the day.

♦ Plantation stocks led the gains with PPB (+RM1.06), IOICorp (+13sen) and Sime (+13sen) rose as laggard play,
while banking stocks continued to rise on Basel Committee and Banking Supervision’s ruling to allow more time for
banks to comply with the higher capital requirement to be set aside for potential loses.

♦ At the close, the FBM KLCI rose 19.18 pts or 1.33% to 1,456.96, with strong market mix of more than 2 gainers to
1 loser. Turnover was robust, with 843m shares changed hands for the day.

Technical Interpretations:

♦ With the strong gain yesterday, the FBM KLCI gapped up more than a point before ending the day at its day high
with a huge bullish candle on the board.

♦ The closing has surpassed the 1,450 immediate resistance level and lifted most of the technical indicators higher.

♦ The index could scale higher towards the all-time high level of 1,524.69 it hit back in Jan 2008 on follow-through
buying momentum in the near term.

♦ Strong supports are near the 10-day SMA of 1,434, 1,400 and 1,390.

Please read important disclosures at the end of this report.

A comprehensive range of market research reports by award-winning economists and analysts are exclusively Page 1 of 6
available for download from www.rhbinvest.com
 13 September 2010

Daily Trading Strategy:

♦ As more investors returned from their Raya break, total turnover surged back to the healthy 800m – 1.0bn shares
level yesterday, indicating a further improvement from last Thursday’s surge in trading activities.

♦ This, coupled with the robust regional markets performance, has lifted the local trading sentiment one notch
higher.

♦ With the huge bullish candle registered across the immediate resistance level of 1,450, the FBM KLCI is poised to
stage further rally today, on follow-through buying support.

♦ As highlighted earlier, beyond 1,450, the index has ventured into its highest trading range with the next effective
resistance only seen at 1,524.69, the all-time high level.

♦ Any pullback will see a firm support near the 10-day SMA of 1,434.

♦ Only if it loses the 1,390 – 1,400 region will it refresh the previous cautious sentiment and call for more profit-
taking dips ahead.

Table 2 : Major Indices & Commodities

Table 1 : Daily Statistics Change Change
Scoreboard 6 Sep 7 Sep 8 Sep 9 Sep 13 Sep Local Key Indices Closing
(Pts) (%)
Gainers 316 336 263 402 542 FBM KLCI 1,456.96 19.18 1.3
Losers 370 354 409 162 218 FBM 100 9,524.49 134.44 1.4
Unchanged 277 286 281 280 254 FBM ACE 3,771.13 -9.52 -0.3
Untraded 397 385 404 512 345 Major Overseas
Indices
Market Cap Dow Jones 10,544.13 81.36 0.8
Turnover Nasdaq 2,285.71 43.23 1.9
(mln shares) 744 642 607 450 843 S&P 500 1,121.90 12.35 1.1
Value FTSE 5,565.53 63.89 1.2
(RM mln) 1,422 1,173 1,038 861 1,992 Hang Seng 21,658.35 400.96 1.9
Jakarta Composite 3,230.89 Closed Closed
Currency Nikkei 225 9,321.82 82.65 0.9
MYR vs US Seoul Composite 1,818.86 16.28 0.9
Dollar 3.1150 3.1230 3.1110 3.1100 3.1000 Shanghai Composite 2,688.32 25.11 0.9
SET 937.04 12.47 1.3
Source: RHBInvest & Bloomberg Straits Times 3,066.81 44.53 1.5
Taiwan Weighted 8,091.30 201.19 2.5
India Sensex 19,208.33 408.67 2.2
Major Commodities
NYMEX Crude Oil
(US$/barrel) 77.19 0.72 0.9
MDEX CPO – Third
Month (RM/metric ton) 2,676.00 32.00 1.2
US Interest Rate Current Last Updated
10 Aug
Overnight Fed Fund Rate 0-0.25% Unch
2010
Next FOMC meeting 21 Sep 2010

A comprehensive range of market research reports by award-winning economists and analysts are exclusively Page 2 of 6
available for download from www.rhbinvest.com
 13 September 2010

Chart 3: FKLI Daily Chart 4: FKLI Intraday

Technical Interpretations:

♦ Thanks to the powerful rally in the cash market, the local futures market ended broadly higher yesterday.

♦ At the close, the FKLI for Sep contract soared 25.5 pts or 1.77% to 1,463.5, while the Oct contract gained a
similar margin to end at the same level at 1,463.5.

♦ This has prompted the FKLI to abandon its previous negative candle, and chalked up a fresh bullish candle on the
chart, indicating a fresh breakout pattern after crossing the key 1,450 resistance level.

♦ Given the uptick in both the stochastic oscillators and the 14-day RSI, chances are the short-term momentum
readings should extend its bullishness in the immediate term.

♦ With the removal of 1,450, the next higher resistance level is only seen near the all-time high level at 1,536.

♦ Immediate support level is now seen at 1,450, followed by the 10-day SMA of 1,435.

♦ For the medium-term outlook, the current uptrend will remain intact, until and unless the futures index loses the
1,390 technical breakout point and the 1,400 psychologicla level.

♦ In our view, the local futures market will track closely the performance in the cash market in the next few weeks.

Daily Trading Strategy:

♦ Yesterday’s surprise rally refreshed the bullish scenario, and it is now aiming at the all-time high resistance at
1,536.

♦ As a result, traders could now turn more bullish on the hope that the 1,450 breakout level will stay firm in the near
term. A secondary support should be placed near the 10-day SMA of 1,435.

♦ Today, we expect the FKLI to trade from 1,458 to 1,478.

Table 3: FKLI Closings

FKLI (Month)
Contracts Open High Low Close Chg (Pts) Settle Volume Open Interest
Sep 10 1447.50 1463.50 1445.50 1463.50 25.50 1463.50 6395 20203
Oct 10 1447.50 1463.50 1445.50 1463.50 25.50 1463.50 327 323
Dec 10 1444.00 1461.50 1444.00 1461.50 25.00 1461.50 88 398
Mar 11 1443.00 1455.00 1443.00 1455.00 20.00 1458.50 44 107

Source: Bursa Malaysia

A comprehensive range of market research reports by award-winning economists and analysts are exclusively Page 3 of 6
available for download from www.rhbinvest.com
 13 September 2010

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

US Market Leads:

♦ Wall Street ended higher on a strong positive note on Monday, lifted by the China’s stronger-than-expected
industrial production data and news that global banks would be given more time than expected to meet capital
requirements.

♦ China’s strong economic data and the banking announcement were the key talks pumping the Asian regional
markets higher on Monday.

♦ Apart from that, investors were encouraged by positive comments from investment guru, Warren Buffett and
Goldman Sachs chief economist Jan Hatzius that the US economy would probably avoid a double-dip recession.

♦ Buoyed by news of an extended shutdown of a major Canada-US crude pipeline as well as China’s stronger oil
demands in Aug, the US light sweet crude oil futures for Oct delivery rose another 74cents or 0.9% to
US$77.19/barrel.

Technical Interpretations:

Dow Jones Industrial Average (DJIA)

♦ The US DJIA shot up another 81.36 pts or 0.78% to settle at 10,544.13 on Monday, extending its recent rally for
a fourth straight day.

♦ On the chart, the bullish candle and a further uptick in both the short-term momentum indicators imply a bullish
near-term outlook ahead.

♦ Coupled with the penetration of the recent high of 10,451.15, more rallies toward the Jul high of 10,719.94 can
be expected soon, before eyeing the next major resistance barrier at 10,850.

Nasdaq Composite (Nasdaq)

♦ With the bulls charging ahead, the Nasdaq Composite index rallied 43.23 pts or 1.93% to end at 2,285.71 with a
huge bullish candle on Monday.

♦ By taking out the recent high of 2,251.98 and a technical gap near 2,261.50, the index should lead to an
extended rally towards 2,330 soon.

♦ For now, a lower technical gap of 2,200.01 and the 21-day SMA near the solid support level of 2,190 will continue
to protect the current uptrend.

A comprehensive range of market research reports by award-winning economists and analysts are exclusively Page 4 of 6
available for download from www.rhbinvest.com
 13 September 2010

Daily Technical Watch:

Chart 7: IJM Daily Chart 8: IJM Intraday

IJM Corporation (3336)

Further upside if it sustains at above RM5.00…

♦ The share price of IJM resumed its uptrend after surviving a fall in Aug 2009 and rebounded to above the RM4.17
important level.

♦ As a result, the stock extended its uptrend and touched a high of RM4.93 in Oct 2009.

♦ However, right after tipping the high, just below the heavy resistance level of RM5.00, the stock began to trade
sideways within a range from RM4.17 to RM5.00.

♦ The stock only managed to penetrate the key RM5.00 resistance level in Jul 2010, prior to sideways crawl near
RM5.00 in the whole of Aug.

♦ Recently, as the 10-day SMA regained strength at above the 40-day SMA near RM5.00, buying support increased
and the stock finally moved higher from the RM5.00 region.

♦ Closed with a positive candle on the chart at RM5.15, its highest level since 2008 and a mild uptick on the 14-day
RSI, the stock is poised to rise further north in the near term, should it sustain at above the RM5.00 important
level.

♦ Moreover, the timely recovery on the 10-day SMA at above the 40-day SMA suggests a strong positive medium-
term outlook ahead.

♦ With a sustainable follow-through buying momentum, the stock could reach the immediate resistance level of
RM5.30 soon, before heading towards the RM5.76 resistance level.

♦ The short-term outlook will turn negative if it loses the RM5.00 psychological level.

Technical Readings:

♦ 10-day SMA: RM5.06

♦ 40-day SMA: RM5.022

♦ Support: IS = RM5.00 S1 = RM4.57 S2 = RM4.17

♦ Resistance: IR = RM5.30 R1 = RM5.76 R2 = RM6.10

A comprehensive range of market research reports by award-winning economists and analysts are exclusively Page 5 of 6
available for download from www.rhbinvest.com
 13 September 2010

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.

A comprehensive range of market research reports by award-winning economists and analysts are exclusively Page 6 of 6
available for download from www.rhbinvest.com