1. STOCK CALL
JAZIRA SECURITIES BROKERAGE Tuesday, December 13, 2011
EFG-HERMES RIC: HRHO.CA
WITHOUT ACTIVITY WE ARE PLAYING ROULETTE!!!
1– The trend is down without doubt and as long as the security keeps oscillating
in this falling channel, you should expect a decline to, or near, a declining sup-
port red line (possible similar or new swing low). A decisive up-breakout over
EGP11.60 signals a beginning of an accumulation mode, but we think that we
can extract early signals from momentum indicators.
2– Sellers are getting weaker and weaker. The security is registering lower levels
without any noticeable support from momentum indicators.
A) in MACD we’re seeing a series of positive divergences in different de-
grees. That’s bullish. However, we need a thrust over the zero line.
B) The RSI still in a Bear Range (see red horizontal lines). A breakout over
the 50-line has led to a Negative Reversal signal (see brown line). we see
also a multiple positive divergence signal, similar to that in 2009 bottom.
The RSI used to penetrate trend lines and rise violently over them keeping
the divergence pattern intact. It hovers around a support zone and a thrust
should come with no surprise.
C) Volume: without activity, we’re playing roulette! Only luck will be the
major factor. The real volume figure is currently below the 200-day EMA
of volume. Keeping an eye on the 2009 bottom, the circles show how the
volume spiked just at the bottom and then thrust to signal a beginning of a
bull market. We need, unfortunately in current circumstances, a similar
pattern. A breakout over the falling channel without activity will bear
nothing to me.
3– We need prices to find support somewhere between 8.50/ 9.45. A breakout
below the rising green line in the RSI indicates that the RSI is going to test the
lower Bear red support line. That may force, or give an early signal, that the
security is going right to below 9.45. A high activity there shouldn't fear you, but
however, it should pull your trigger. If the RSI held firm at current level, the bull
support line, it may thrust and this thrust move will force the security to penetrate
the 11.60 level signaling a conservative BUYING opportunity
BOTTOM LINE: (Last Price: EGP10.29) Hold, Buy Dip to the
lower declining support red line and Buy strongly over 11.60
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2. STOCK CALL
JAZIRA SECURITIES BROKERAGE Tuesday, December 13, 2011
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