Hermes: EGX30 Enters Near-Term Topping Process, Decline ‘Is Not Complete’

In its short-term update about The Egyptian Exchange (EGX), EFG-Hermes said that EGX30 has confirmed entering near-term topping process and confirmed Hermes’ view that the decline started from the 5020 high is not complete. Market opened beyond the downside forecast, offering better levels, the report issuer added.

The low of yesterday, 4632 +/-1% will be the other part of the topping process [Yesterday’s low, came at the 52 w average and the support of previously penetrated trend line]. This up move can go back towards the 4900 level in addition to the 3 levels, mentioned before as resistances, at 4971 “hit twice”, 5086 and 5122/5190 [the highs over May and March 2012].

As suggested before, Hermes said the current weakness can be used to build positions in EGX70, such as in El Shams Housing and Urbanization (ELSH.CA), Egyptian Media Production City (EMPC) (MPRC:CA), Egyptian Financial and Industrial Co. (EFIC.CA) and Cairo Poultry (POUL:CA), which could benefit the expected EGX70 outperformance.