Technical Highlights

Daily Trading Strategy : The bearish divergence signal is still intact…
- Given a mild rebound from the 10-day SMA near 1,182, the FBM KLCI narrowly escaped from triggering a
major correction signal yesterday.
- Further rebound in the next few days will build up the much-needed momentum for a penetration of the
recent high of 1,191.66 and the retest the psychological barrier of 1,200.
- However, yesterday’s rebound is not enough to violate the recent “Bearish Divergence” triggered on the
stochastic oscillators.
- And in our view, the risk of a correction will remain high if the index fails to remove 1,191.66 high and 1,200
soon. Furthermore, the weak volume, which has constantly failed to reach our expected 1.2-1.5bn shares
mark indicate a weak follow-through likely on yesterday’s rebound.
- To reiterate, further downside support is only at 1,104 near the 40-day SMA of 1,119, should it reverse
yesterday’s rebound to below the 10-day SMA in the immediate term.
- To rally out from the current situation, the market also needs a boost from a better performance of the
regional markets in sessions to come.

RHB Investment 14/8/2009