1. Arabian Cement Company
Egypt
Equities | Technical Call
Sunday, 23 October 2016
The riptide
Arabian Cement Company (ARCC.EGX)has recently been one of the underperformers
in the short and medium terms. It is moving in a clear down trend, declining from 19.00
in February 2015 all the way down to 4.25. This downtrend is s ll intact and stepping in
would be very risky; however, hereunder we will shed some light on how the bears are
weakening after dominating for 20 months.
Weekly Chart
Last week’s transac ons ended with a ‘doji’ pa ern, where ARCC was able to close
barely at the open prices a er it had declined to reach 4.25. This points to an
equilibrium between bulls and bears.
Prices have been hovering between the lower and mid bands of the ’Bollinger Bands’,
and reaching the lower band usually leads to a rebound.
Both ‘Price Oscillator’ and ’RSI’ (the second and third panels) have been recording
higher readings over the last eight months, compared to prices which con nued to form
lower lows. Also, ‘RSI’ and ‘Stochas cs Oscillator’ (the third and fourth panels) have
reached an oversold zone.

2. Daily Chart
Prices have reached the parallel line to the downtrend; not only that, they even skid
underneath. Then they managed to proofread their path and re-enter the falling channel.
On a smaller scale, ARCC broke above the downtrend line that was formed earlier this
month, coinciding with the RSI rebounding from an oversold area (the second panel),
positively diverging with the prices.
‘MACD’ (third panel) just generated a ‘buy’ signal. However, this does not change the
fact that the downtrend is s ll intact, unless it breaks above the zero line, which it could
not do last September. On the other hand, ‘MACD’ successfully spo ed the upward
correction from 6.20 to 7.20 last July.
Conclusion
ARCC is totally controlled by bears, and stepping in is associated with high risk. Despite
that, we believe those bears’ power is becoming slender, and in a few weeks we may
witness a trend reversal. Hence, we recommend gradual accumula on, knowing that
slipping below 4.00 calls for a ‘stop loss’, and our target lies between 5.70 -6.00.
Shahd Raa'fat, CMT
Senior Technical Analyst
MubasherTrade
Shahd.Raafat@MubasherFS.com
This report is issued by Mubasher Financial Services BSC (c) is an Investment
Business Firm Category 1, licensed and regulated by the Central Bank of Bahrain.
Report is subject to disclosure and disclaimer mentioned here.

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