The document provides a technical analysis and stock call for the EGX30 index. It analyzes indicators like the Relative Strength Index (RSI) and MACD, noting patterns that historically preceded bottoms in the index. The RSI is showing a similar pattern to 2009, suggesting the index may find support and bottom out soon. The MACD is also giving a positive divergence signal, its second since 2009, indicating a conservative buy signal. The analysis concludes the index is looking to bottom and recommends accumulating or buying on a breakout above the MACD trend line.

1. STOCK CALL
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EGX30 RIC: .EGX30
IF HISTORY TENDS TO REPEAT ITSELF, THEN
“THE INDEX IS LOOKING FOR A BOTTOM”
It’s our job to search for repetitive patterns in the charts. Who lied to you and told you that
TA is all about H&S and trend lines? Technical Analysis building stone concept is that;
“History tends to repeat Itself over and over”. Of course, Recurring patterns may not be
identical, but knowing that a certain manifestation is being repeated will make a difference.
In our unstoppable search, we found something and would love to share with you.
Relative Strength Index (RSI):
Taking out the Red Resistance Line in 2009 was the first REAL signal of a rally that forced
the market to nearly 7,700. A thrust up over this line, which gave a Negative Reversal sig-
nal (see green lines in both chart and RSI), has followed by a thrust down to the rising dot-
ted brown line, slightly over the red Bear Support Line. The RSI, before any other tools,
has signaled a beginning of a rally just at a bottom. We have, so far, a nearly similar pat-
tern; triangle, multiple divergences, a thrust up over a red declining line, Negative Reversal
signal and a thrust down to a confluence of support from the apex of the triangle. Should
history repeats itself, the RSI will find support somewhere over the 20 level, and will
bounce strongly giving an early signal of a BOTTOM. The Negative Reversal Signal may
force the index to the 4,000 level (a measured target of the NG signal), the Oct low, or
even slightly lower. But as long as the RSI lies over both the rising dotted brown line and
the red Bear Support Line, I don’t care where the market will hold its breath, because, giv-
en this recurring pattern, it will do that in the near future. The RSI is making me bullish
and only a decline to below the 20 level in the RSI will make be completely bearish.
MACD:
Do you know that the MACD is giving its second strong Positive Divergence signal since
2009 bottom ???!!!
The indicator, since 2008 top till now, is moving in just two channels. A breakout over the
first channel took place at mid December 2008, months before the bottom in the price itself
(see the first green rectangle). The MACD has built a double bottom, successfully penetrat-
ed its neckline, found an obstacle near the declining dotted red line and is currently pulling
back to a SZ. Taking out this line offers a very important conservative Buy signal. BOTTOM LINE: (Last Price: 4,170 pt. Cls Nov 16)
ACCUMULATE and/or BUY a breakout over the MACD trend line
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2. STOCK CALL
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