This document provides a technical analysis and strategy report for Egyptian markets in 2017. It includes: - An overview of the performance of key Egyptian indices such as EGX30, EGX50, and EGX70 in 2016 and the outlook for 2017. - Analysis of market sentiment and the relative performance of different sectors based on relative rotation group analysis. - Technical analyses and calls on specific stocks in the financials, materials, and real estate sectors that are seen as opportunities in 2017. - Discussion of factors like market valuations, seasonality effects, and investor psychology that provide context for the market outlook.

1. {{
TECHNICAL ANALYSIS
STRATEGY REPORT
2017

2. MARKETS OVERVIEW
EGX30
EGX70
EGX50 EWI
EGX30 (In US Dollar)
MARKET SENTIMENT
RELATIVE ROTATION GROUP ANALYSIS
2017 ANALYST’S PICKS
FINANCIALS
MATERIALS
REAL ESTATE
2016 TECHNICAL CALLS PUBLISHED
2TECHNICAL ANALYSIS STRATEGY | 2017
TABLEOFCONTENTS
Author:
Shahd Raafat, CMT
Senior Technical Analyst
Mubasher International
Shahd.Raafat@MubasherFS.com

3. The index was able to form a
solid uptrend breaking above
two key resistance levels 10,066
(the Financial Crisis high) and
12,039 (the old all-time high). Bulls
continued to push it up above
13,000, supported by
appropriate volume.
Now, let’s check the indicators:
MACD generated four ‘buy’
signals in the last 15 years; three
of them were followed by
breaking above the zero line
and, therefore, massive upward
moves, while the other one could
not make it above the zero line,
leading to the lateral moves from
2008 through 2014.
MACD maintained bullish signal
above the zero line, which
supports the uptrend
continuation scenario; the same
goes for ADX, -DI, and +DI.
RSI, Stochastic and CCI are
known for being faster and
powerful as well; they all have
reached ‘overbought’ areas.
As confusing as it seems, they
both can point to the same
scenario, but reaching an
‘oversold’ area does not mean
it’s over. As a matter of fact, as
long as the trend is powerful, we
can stay in ‘overbought’ mode
as long as it takes.
So what do we follow?
The answer to this question is: We
can proceed in the uptrend after
taking a breath as the index is
moving in an uptrend over the
medium and long terms. The
odds favor a continuation of the
uptrend.
The real exit should happen when
indicators turn back from the
‘overbought’ areas. Also,
anything reflecting negatively on
the price action, such as a
bearish pattern, negative
divergence, or a false break
would also trigger an exit.
Last year’s gain:
+76.20%
“THERE IS NO
DOUBT THAT THE
FLOATATION IS
WHAT BROUGHT
US HERE.
GUESS WHAT?!
THERE IS NO
TURNING BACK;
THE UPTREND
HAS BEEN
UNLEASHED
AND NOTHING
SEEMS TO STOP
IT.”
3TECHNICAL ANALYSIS STRATEGY | 2017
58%
30%
12%
Up trend Down trend Flat
Trends* of EGX30 Constituents
* Definitions:
Percentage up trend = Stocks trading above 200-day moving average
Percentage down trend = Stocks trading below 200-day moving average
Percentage flat = Stocks trading around 200-day moving average
68%
31%
1%
The market's gainers and losers in 2016
GAINERS LOSERS UNCHANGED
MARKETSOVERVIEW

4. Now, after we discussed the bigger bullish picture,
let’s take a closer look at the weekly chart.
Recovering 100 % of 2015’s downfall and crossing
above 10,066 created room for another rise towards
the 161% level of Fibonacci Projections (nearly
13,000), which matches the nature of the current
impulsive wave.
This specific level is not just a Fibonacci target, but it
is also breaking above the old all-time high of
12,039.
Therefore, we still need a confirmation of this
breakout on the monthly chart.
We can see that the volumes have started to shrink.
Also, –DI is ready to cross below ADX (third panel),
and RSI has reached an extreme ‘overbought’
level, which is reflected in the stiffness of the current
price levels.
Thus, we might stumble here for a little while before
we carry on our journey to north.
Source: Metastock
“OUR SAFE
ZONE IS
BETWEEN
11,000-
10,000.”
“A FLAT OR
A DOWN
SWING
WON’T RUIN
THE
PREVAILING
TREND.”
THE ODDS
1. A correction in flat range, lower limit 11,000 and
upper limit 13,000 (give or take 5%), followed by a
rise towards 17,000. The highest probable.
2. A correction against the trend to reach 10,000 or a
little lower before we continue rising.
3. No correction at all. The least probable.
4TECHNICAL ANALYSIS STRATEGY | 2017
MARKETSOVERVIEW
101.75
79.89
76.20
38.63
22.38
-21.59
-40.00
-20.00
0.00
20.00
40.00
60.00
80.00
100.00
120.00
HRMSL EGX 50 EGX30 EGX 100 EGX 70 EGX30 USD

5. On the monthly chart, EGX70 has been
moving in a downtrend since the Financial
Crisis, then it found a solid support around
350 before starting to pull back.
Compared to the blue-chip index, EGX70
has certainly underperformed in 2016.
However, in case it managed to break
above this downtrend line, we believe
2017 is going to be a good year for EGX70,
with our medium-term targets lying
between 500 and 650.
On the other hand, breaking below the
support/stop loss level 390 calls for a
continuation of the prevailing downtrend.
Last year’s gain: +22.38%
MACD just generated a ‘buy’ signal for the first
time in five years, which is considered
significant as MACD accurately spotted the last
high in 2015.
On the weekly chart, EGX50 has
melted down from 2,150, all the way
down to 1,012 losing around 53.00%
of its value. Then, the bulls took over
in the beginning of 2016.
After EGX50 managed to form a
solid bottom at 1,012, it was able to
move north into a brand new
uptrend.
We believe 2017 will witness a
continuation of the current Wave 3,
which is known for being strong,
impulsive, and with the biggest
amplitude between all of the
impulsive waves.
“THE POWER OF
THE IMPULSIVE”
“WILL THE
DOWNTREND
STOP US?”
Our first target is 2,150 then 2,480. Meanwhile
on the short term, stop loss level is 1,800.
Last year’s gain: +79.89%
EGX70
Source: Metastock
Source: Metastock
5TECHNICAL ANALYSIS STRATEGY | 2017
MARKETSOVERVIEW

6. “ARE EGYPTIAN
STOCKS CHEAP
OR APPEALING?”
Source: Bloomberg
Well, the answer to this
question will take more than
a couple of months of
observation and analysis.
But for now, the Egyptian
pound free float is a good
step forward and it has its
good and bad influence on
the economy.
However, we have noticed
the following points during
the very short preceding
period:
- As the Egyptian pound
falls versus the US dollar,
Egyptian equities soar.
- An obvious leap in
volumes and turnover
appeared after the
floatation.
- Foreign investments
increased after the
recent reforms.
- The market’s benchmark
was able to cut all the
losses since the 2008
Financial Crisis to record
a new high in the local
currency.
But the EGX30 (USD)tells a
different story.
When the exchange rate
used to be fixed, both
indices were identical and
after the EGP free float,
they understandably
started to diverge. While the
index was testing the all-
time high of 12,000, EGX30
(USD) was testing its major
support zone 600-650.
The obstacle is to stay
above 650 (for EGX30
(USD)) and break above
13,000 (for EGX30) means
both indices should move in
the same direction one
more time.
But more importantly, both
charts are appealing;
EGX30 is maintaining an
uptrend and after the
expected correction phase,
this trend should resume.
The same goes for EGX30
(USD), which holds above
key support level with signs
of a rebound taking place.
USD/EGP
6TECHNICAL ANALYSIS STRATEGY | 2017
MARKETSOVERVIEW

7. Now, the market has
been over-heated,
fueled by fundamental
and economic reasons. If
it is indeed Wave 3, then
everyone is in and
gaining from it; it is hard
to be missed. So the
question is: Is it over yet?
Well, we don’t think so.
Wave 3 is usually
extended and
subdivided, so we will
face corrective waves
either flat or downwards,
but the rise will continue
eventually until it ends
and Wave 4 begins.
WAVE 3
 Strength, Breadth
 Reforms
 Best fundamentals
 NEVER THE SHORTEST.
“INVESTORS
PSCHYOLOGY”
WAVE 4
 Surprising.
 Disappointing.
 Big move already
happened.
- Joined early before the
reforms, the devaluation and
the EGP free float.
- Satisfied, tend to take some
profit.
- Patient, won’t throw away
everything until s/he becomes
sure it’s over.
-Also, won’t invest as much as
s/he already has.
Accumulation
- Probably joined after the
EGP devaluation.
- Was waiting for dramatic
changes before s/he invests
in equities.
-Looking for the best
performers, s/he wants
more.
- After what s/he realized,
maybe s/he will catch
breath to see when this will
end.
The Rally
- Willing to risk but not
much.
- Threatened by the
top.
- Creates a sideways
move by entering and
dropping.
- Impatient, wants to
have quick profits.
Post the Rally
IS IT JANUARY EFFECT
OR FEBRUARY EFFECT?
Well, it turns out that “EGX 30 showed
remarkable price returns in the period
August-January compared to the period
February-July. When we compare the EGX30
index price returns in February-July with the
rest of the year in each year since the index
inception, we realize that EGX 30 tends to
give a significantly high premium of 20.7% on
average. Average returns recorded 22.3% in
August-January compared to only 1.6% for
February-July. Meanwhile, the likelihood of
positive returns was 70.6% in August-January
versus only 44.4% in February-July.”
To read the full report, please click here.
ARE THERE BETTER OR WORSE MONTHS?
Yes, by taking a look at the above graph, we
find that May, June and November usually
have negative returns on average, with June
the worst of them all. On the other hand,
January and December generate the best
returns on average. Meanwhile, April, July, and
September generate above-average returns,
with the rest of the year falling below average.
This supports the idea that a correction in the
first quarter of 2017 before we resume our
prevailing uptrend.
6.93
0.38
0.89
2.72
-0.89
-3.32
2.42
1.15
3.61
0.49
-0.82
5.49
1 2 3 4 5 6 7 8 9 10 11 12
EGX30 Average Returns Since Inception
7TECHNICAL ANALYSIS STRATEGY | 2017
MARKETSENTIMENT
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

8. LEADERS
AND
LAGGARDS
It was a good year for most of
the sectors, especially those in
the blue-chip index, like Banks,
Real Estate, Financial Services
and Telecommunication
Services. Meanwhile, Materials,
Industrials, and Construction
were not as lucky.
Undoubtedly, leading sectors
have their own golden stock,
and the uptrend will eventually
proceed. However, we still can
catch the train before it leaves,
picking those stocks that were
just warming up in 2016.
The above chart helps us figure
out our next focus list. This is
Relative Rotation Group ’RRG”; it
simply visualizes the concept of
group rotation.
RRG breaks the stocks into four
quadrants: Improving, Leading,
Weakening, and Lagging.
It also classifies them based on
two factors (relative strength
compared to the benchmark
EGX30 and the momentum of
that relative strength).
On the right-hand side, Leading
and Weakening are the
outperformers. The leading
stocks are keeping their strong
performance (like ESRS, HRHO,
HELI, and SWDY); the weakening
stocks are still out performing but
at a slower pace (like COMI and
GTHE).
On the left-hand side, we find
Lagging and Improving which
have had lesser good
performance because, having
been through an accumulation
phase.
Also, reading the graph from top
to bottom, we find that the
upper side (Improving and
Leading) exhibits stocks that are
performing better than
Weakening and Lagging.
We should keep in mind that any
stock is able to move from one
side to another; this graph is not
constant. However, it certainly
helps in the allocation of your
portfolio, so you don’t end up
lagging the benchmark.
In other words, your weights
should be focused on the upper
side and a little light on the lower
side most of the time.
Source: Bloomberg
THE POWER OF
THE TREND,
AND THE
WISDOM OF
ALLOCATION.
“FOCUS YOUR
PORTFOLIO ON
THE UPPER SIDE.”
8TECHNICAL ANALYSIS STRATEGY | 2017
RELATIVEROTATIONGROUPANALYSIS

9. FINANCIALS
2016 was pretty much a good year for the
financials sector. Three stocks were able to
record new all-time highs in 2016, and bulls
have had full domination over them.
Accordingly, their prevailing trend is up, and
odds most probably favor the continuation
of the prevailing trend.
ADIB
ADIB earned 40% in 2016 after it was able
to rebound off a key support 2.00,
supported by heavy volumes.
Moving in a giant sideways range, odds
favor breaking out of it in 2017.
It is facing a major resistance at 9.50,
breaking above which leads to further rise
towards 13.50. We note that breaking
below 6.00 invalidates the previous
scenario.
HRHO
HRHO gained nearly 250% in 2016 and
was one of the top performers.
It witnessed heavy volumes during this
upward move.
Revisiting the resistance 36.00-37.00 is
highly expected during 2017, while
breaking below 25.00 invalidates the
previous scenario.
CCAP
CCAP has been in a severe downtrend; it
was one of the underperformers over the
last two years. Volumes witnessed a
remarkable enhancement, and odds
favor that this is a bottom.
RSI rebounded off an oversold area.
Our first target is 1.70 then 2.25, while our
stop-loss levels are 1.05 and 1.00.
9TECHNICAL ANALYSIS STRATEGY | 2017
2017ANALYST’SPICKS
190.37
100.99
92.32 88.17
40.12
18.44
-15.60
-25.16
-50.00
0.00
50.00
100.00
150.00
200.00
250.00
HRHO CIEB COMI PIOH ADIB HDBK FAITA CCAP
2016
FINANCIALS

10. MATERIALS
Except for AMOC, SMFR and ESRS were the
top performers in Materials, which generally
started to perform well during the last quarter
of 2016. A better showing is expected in 2017.
ARCC
ARCC is testing a major downtrend and a
potential inverted head-and-shoulders is
forming with the neck line 9.00.
Volumes supported the recent upswing
and started to pull back in the downswing.
In case it broke above 9.00, a further rise
towards 13.00 is expected, while breaking
below 6.70 calls for a stop loss.
ESRS
Although the prevailing trend is sideways, the
bears were always pushing tops even lower.
By 2016, ESRS managed to break above the
downtrend, and the bulls started to show some
power by forming higher lows.
Volumes and indicators are supporting this
breakout to proceed; however, the level 20.00
is a strong resistance, breaking above which
leads to a further rise towards 27.00.
Meanwhile, breaking into the downtrend one
more time calls for a stop loss.
SVCE
SVCE is moving in a huge accumulation
phase with lateral moves between 4.00
and 10.00.
Volumes are increasing, and both MACD
and stochastic generated buy signals.
In case it could break above 6.00,
revisiting 10.00 is expected. Breaking
below 4.50 calls for a stop loss.
10TECHNICAL ANALYSIS STRATEGY | 2017
2017ANALYST’SPICKS
220%
155%
121%
66%
32%
22%
-32%-50%
0%
50%
100%
150%
200%
250%
AMOC SMFR ESRS SKPC EFIC SVCE ARCC
2016
MATERIALS

11. REAL ESTATE
Almost all the sector performed very well in
2016; it started with OCDI which preceded
the market and was one of the top
performers during H1 2016. It ended with HELI
which recorded a new high and is ahead of
the real estate sector. The year 2017 will be
nothing but a chance for another even
better performance.
AMER
Seems like 2017 will be another good year for
so-called ‘penny’ (below one pound) stocks
after all. AMER could not cope up with the
index in 2016, but on the bright side, it was
able to rebound before reaching the key
support 0.18 and only started to hold it
together in the last couple of weeks.
Volumes are getting heavier on the current
levels which means that they are levels of
interest.
Sustaining above these levels will push it
towards 0.40 then 0.50, noting that breaking
below 0.30 calls for a stop loss.
PHDC
PHDC was moving into a symmetrical triangle
that indicates equilibrium in powers between
bulls and bears, until bulls were able to push it
above this down trend-line.
Volumes support the validity of this violation,
and MACD just generated its bullish signal.
It is facing a key resistance at 3.85, breaking
above which leads to a further rise towards
5.25 in 2017. While going back into the
symmetrical triangle or breaking below 2.95
calls for stop loss.
HELI
HELI was one of the top performers and
recorded a new all-time high in 2016.
Sky is the limit for this kind of stocks, but we
can use the Fibonacci retracements to
know that 33.00 is a 161% target, breaking
above which leads to further rise towards
47.00.
Our trailing stop loss is 24.00, the recent
broken resistance which is now a support.
11TECHNICAL ANALYSIS STRATEGY | 2017
2017ANALYST’SPICKS
100%
57%
41%
54%
23%
5%
-33%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
HELI OCDI TMGH MNHD PHDC EMFD AMER
2016
REAL ESTATE

12. Name Ticker Sector 2016 Targets Realized 2017 Bullish
Targets
2017 Bearish
Targets
Medinet Nasr Housing
& Development
MNHD Real Estate 22.00-24.00 Almost 27.00 - 29.00 17.50 -16.00
Talaat Moustafa
Group
TMGH Real Estate 9.00-9.20 Yes 10.35 -12.00 8.00
Palm Hills
Developments
PHDC Real Estate 3.60 Almost 4.50 - 5.25 2.95 - 2.50
El Shams Housing &
Development
ELSH Real Estate 4.25 - 4.50 Not yet 4.25 - 4.50 2.80
Sixth of October
Development &
Investment
OCDI Real Estate 14.70 -16.50 Almost 18.70 - 26.00 14.50
Qalaa Holdings CCAP Financials 1.10 -1.15 Yes 1.70 – 2.25 1.00
Pioneers Holding PIOH Financials 11.50-12.00 Yes 13.00 -18.00 10.00
Global Telecom
Holding / Update
GTHE Telecom 6.75 - 8.00 Almost 13.00 6.50
Global Telecom
Holding
GTHE Telecom 4.30 -4.50 Almost 13.00 6.50
Telecom Egypt ETEL Telecom 12.20 –14.60 Almost 17.70 11.50
Ezz Steel / Update ESRS
Materials
20.00 Yes 27.00 14.00
Ezz Steel ESRS
Materials
13.50-14.00 Yes 27.00 14.00
Arabian Cement ARCC Materials 6.00 Yes 13.00 6.00
GB Auto AUTO C. Discretionary 3.50 Yes 4.00 -5.00 2.70
Arab Cotton Ginning ACGC C. Discretionary 5.00 Yes 6.60 4.00
Oriental Weavers
Carpet/ Update
ORWE C. Discretionary 11.00 Yes 20.00 14.00
Oriental Weavers
Carpet
ORWE C. Discretionary 9.00 Yes 20.00 14.00
12TECHNICAL ANALYSIS STRATEGY | 2017
2016TECHNICALCALLSPUBLISHED

13. Methodology
Technical market analysis is, at its essence, a study of crowd behavior and market psychology. We enhance this analysis by studying chart patterns,
overlaying a large suite of technical indicators, volatility and volume data to gauge sentiment and trend strength, looking for divergences and
confirmation. It is vitally important to view indicators in relation to where the market is in its wave cycle.
Our methodology is to focus on stocks that are suitable for active traders, swing traders and proactive investors focusing on these stocks for long
positions and, when appropriate, for shorting. The technical analysis process we use is based on the ‘pure’ price and volume, rule-based analysis
of the Elliott Wave Principle and to overlay a broad suite of technical indicators, positioning and sentiment evidence in order to recommend a
trade. The time horizon is normally short- to medium-term (days, multi-week/month). Translating our analysis into actual trading ideas and
positions, our investment process combines a trend following trading methodology and its discipline with the technical analysis of the Elliott Wave
Principle. A potential trade set-up is given by the wave structure and supporting technical analysis such as Japanese candlesticks, trend extension
and exhaustion measures, momentum oscillators and sentiment. However, the trade is only executed when there is an objective movement of
momentum in the direction the technical analysis suggests. The trade entry and trade exit are governed by the moving averages acting as both a
trailing stop loss and take profit discipline. By overlaying a disciplined, proven investment strategy such as Trend Following on technical analysis
we seek to run winning trades and cut losing trades early.
Other Disclosures
MFS does not have any proprietary holding in any securities. Only as a nominee, MFS holds shares on behalf of its clients through Omnibus
accounts. MFS is not currently a market maker for any listed securities.
Analyst Certification
I (we), Shahd Raafat, employed with Mubasher International Securities, a company under the National Technology Group of Saudi Arabia being a
shareholder of Mubasher Financial Services BSC (c) and author(s) of this report, hereby certify that all the views expressed in this research report
accurately reflect my (our) views about the subject issuer(s) or security(ies). I (we) also certify that no part of my (our) compensation was, is or will
be directly or indirectly related to the specific recommendation(s) or view(s) expressed in this report. Also, I (we) certify that neither myself
(ourselves) nor any of my (our) close relatives hold or trade into the subject securities.
Head of Research Certification
I, Amr Hussein Elalfy, Global Head of Research of Mubasher Financial Services BSC (c) confirm that I have vetted the information, and all the views
expressed by the Analyst in this research report about the subject issuer(s) or security(ies). I also certify that the author(s) of this report, has
(have) not received any compensation directly related to the contents of the Report.
Disclaimer
This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment.
Mubasher Financial Services BSC (c) (‘MFS’) has based this document on information obtained from sources it believes to be reliable but which it
has not independently verified; MFS makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or
completeness. The opinions contained within the document are based upon publicly available information at the time of publication and are
subject to change without notice. This document is not intended for all recipients and may not be suitable for all investors. Securities described in
this document are not available for sale in all jurisdictions or to certain category of investors. The document is not substitution for independent
judgment by any recipient who should evaluate investment risks. Additionally, investors must regard this document as providing stand-alone
analysis and should not expect continuing analysis or additional documents relating to the issuers and/or securities mentioned herein. Past
performance is not necessarily a guide to future performance. Forward-looking statements are not predictions and may be subject to change
without notice. The value of any investment or income may go down as well as up and you may not get back the full amount invested. Where an
investment is denominated in a currency other than the local currency of the recipient of the research report, changes in the exchange rates may
have an adverse effect on the value, price or income of that investment. In case of investments for which there is no recognized market, it may be
difficult for investors to sell their investments or to obtain reliable information about its value or the extent of the risk to which it is exposed.
References to ratings/recommendations are for informational purposes only and do not imply that MFS adopts, supports or confirms in any way
the ratings/recommendations, opinions or conclusions of the analysts. This document is not directed or intended for distribution to, or use by, any
person or entity who is a citizen or resident of or located in any locality, state, country, or other jurisdiction where such distribution, publication,
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within such jurisdiction. MFS accepts no liability for any direct, indirect, or consequential damages or losses incurred by third parties including its
clients from any use of this document or its contents.
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DISCLOSUREAPPENDIX