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Relative strength curve

Entity x / Entity y
The curve is rising= entity x is outperforming y
The curve is declining= entity y is
outperforming x

Sectors analysis

1.10 insurance sector compared with 1.10

1.05
dubai general index 1.05

1.00 1.00

0.95 0.95

0.90 0.90

0.85 0.85

0.80 0.80

6000 6000

5500 Dubai general index 5500

5000 5000

4500 4500

4000 4000

3500 3500
5000 5000
4900 4900
4800 insurance sector 4800
4700 4700
4600 4600
4500 4500
4400 4400
4300 4300
4200 4200
4100 4100
4000 4000
3900 3900
3800 3800

10000 10000

5000 5000
x10000 x10000
26 8 15 22 29 5 12 19 26 5 12 19 26 2 9 16 23 30 7 14 21 28 4 11 18 25 2 9 16 23 30 6 13 20 27 3 10 17 24 1 8 15 22 29 5 12 19 26 4 10 1724 31 7
2006 February March April May June July August September October November December 2008

1
2.50 Real Estate & Construction Index 2.50
compared with Dubai general index
2.45 2.45

2.40 2.40

2.35 2.35

2.30 2.30

2.25 2.25

2.20 2.20

2.15 2.15

6000 6000

Dubai general index


5500 5500

5000 5000

4500 4500

4000 4000

3500 3500

14000 DFM.73 (13,890.17, 13,890.17, 13,890.17, 13,890.17, +137.280) 14000


13500 13500
13000 13000
12500 Real Estate & Construction Index 12500
12000 12000
11500 11500
11000 11000
10500 10500
10000 10000
9500 9500
9000 9000
8500 8500
10000
x100000 10000
x100000
26 8 15 22 29 5 12 19 26 5 12 19 26 2 9 16 23 30 7 14 21 28 4 11 18 25 2 9 16 23 30 6 13 20 27 3 10 17 24 1 8 15 22 29 5 12 19 26 4 10 1724 31 7
2006 February March April May June July August September October November December 2008

1.50 1.50

1.45 Investment & Financial Services Index O 1.45


compared with dubai general index
1.40 1.40

1.35 1.35

1.30 1.30

1.25 1.25

1.20 1.20

1.15 1.15

1.10 1.10

6000 6000

5500 Dubai general index 5500

O
5000 5000

4500 4500

4000 4000

3500 3500
9000 DFM.72 (8,370.51, 8,506.43, 8,347.55, 8,370.51, -135.920) 9000

8500 8500

8000 8000

7500 Investment & Financial Services Index O 7500

7000 7000

6500 6500

6000 6000

5500 5500

5000 5000

4500 4500

4000 4000
20000
x10000 20000
x10000
26 8 15 22 29 5 12 19 26 5 12 19 26 2 9 16 23 30 7 14 21 28 4 11 18 25 2 9 16 23 30 6 13 20 27 3 10 17 24 1 8 15 22 29 5 12 19 26 4 10 1724 31 7
2006 February March April May June July August September October November December 2008

2
0.26 0.26
0.25 0.25
Telecommunication Index compared
0.24 0.24
with dubai general index
0.23 0.23
0.22 0.22
0.21 0.21
0.20 0.20
0.19 0.19
0.18 0.18
0.17 0.17
0.16 0.16
0.15 0.15
0.14 O 0.14

6000 6000

5500 Dubai general index 5500

O
5000 5000

4500 4500

4000 4000

3500 3500
DFM.85 (1,187.70, 1,187.70, 1,187.70, 1,187.70, +42.0699)
1200 1200

1150 1150

1100 1100

1050 1050
Telecommunication Index
1000 1000

950 950

900 900

850 O 850

800 800

750 750

26 8 15 22 29 5 12 19 26 5 12 19 26 2 9 16 23 30 7 14 21 28 4 11 18 25 2 9 16 23 30 6 13 20 27 3 10 17 24 1 8 15 22 29 5 12 19 26 4 10 1724 31 7
2006 February March April May June July August September October November December 2008

Two sectors comparison


0.110 0.110
0.105 0.105
Telecommunication Index compared
0.100 with Real Estate & Construction Index 0.100
0.095 0.095

0.090 0.090
0.085 0.085
0.080 0.080
0.075 0.075
0.070 0.070
0.065 0.065
0.060 0.060

14000 DFM.73 (13,890.17, 13,890.17, 13,890.17, 13,890.17, +137.280) 14000


13500 13500
13000 13000
12500 12500
Real Estate & Construction Index
12000 12000
11500 11500
11000 11000
10500 10500
10000 10000
9500 9500
9000 9000
8500 8500

DFM.85 (1,187.70, 1,187.70, 1,187.70, 1,187.70, +42.0699)


1200 1200

1150 1150

1100 1100

1050 1050
Telecommunication Index
1000 1000

950 950

900 900

850 O 850

800 800

750 750

26 8 15 22 29 5 12 19 26 5 12 19 26 2 9 16 23 30 7 14 21 28 4 11 18 25 2 9 16 23 30 6 13 20 27 3 10 17 24 1 8 15 22 29 5 12 19 26 4 10 1724 31 7
2006 February March April May June July August September October November December 2008

3
Relative Strength Comparative(DFM General Index) (0.0012323, +0.0000147)
DU stock compared with
Dubai general index

0.001 0.001

DFM General Index (6,069.14, 6,093.78, 5,989.93, 6,037.49, +9.33008)


6000 6000

5500 Dubai general index 5500

O
5000 5000

4500 4500

4000 4000

3500 3500
DU (Emirates Integrated Telecommunications Co (7.38000, 7.56000, 7.31000, 7.44000, +0.10000)
7.5 7.5

7.0 7.0
Du Stock
6.5 6.5

6.0 6.0

5.5 5.5

5.0 5.0
O
4.5 4.5

10000 10000

5000 5000

x10000 x10000

September October November December 2007 February March April May June July August September October November December 2008

Relative Strength Comparative(CASE30) (0.0216337, -0.0004093)

0.0255

0.0250

0.0245
SODIC versus CASE30

0.0240

0.0235

0.0230

0.0225

0.0220

0.0215

0.0210

0.0205

0.0200

0.0195

0.0190

0.0185

27 3 10 17 24 1 8 16 22 29 5 12 19 26 3 10 17 24 31 7
September October November December 2008

4
Normalized relative strength

Relative strength for ranking purposes. -


To know by how much did the stock outperform or under
perform the market.
The scale has the one in the middle.
(Entity x / base value of x) / Entity y/base
value of y at the same date).

OCIC versus CASE30


Relative Strength Comparative(CASE30) (0.021562, +0.000147)

0.020

Normalized RS for ocic versus


case30 0.015

0.010

0.005

0.000

-0.005

ÇæÑÇÓßæã ááÇäÔÇÁ æÇáÕäÇÚÉ (564.980, 575.000, 563.500, 569.120, +9.62000)


600

550

500

450

400

350

300

250

200

150

100

50

25000

20000

15000

10000

5000

x100

n Jul Aug Sep Oct Nov Dec 2005 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2006 Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2007 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 20

5
Media versus case30
Relative Strength Comparative(CASE30) (-0.010724, -0.000030)

0.000 0.000

P
-0.005 -0.005

-0.010 -0.010

11000 CASE30 (10,320.74, 10,476.64, 10,320.74, 10,469.78, +149.040) 11000


10500 10500
10000 10000
9500 9500
9000 9000
8500 8500
8000 8000
7500 7500
7000 7000
6500 6500
6000 case30 rises 7.25 times since 6000
5500 june 2004 5500
5000 5000
4500 4500
4000 4000
3500 3500
3000 3000
2500 2500
2000 P 2000
1500 1500
1000 1000
500 500

24 ÇáãÕÑíÉ áãÏíäÉ ÇáÇäÊÇÌ ÇáÇÚáÇãí (11.8500, 11.8900, 11.5400, 11.5500, -0.15000) 24


23 23
22 22
21 21
20 20
19 19
18 18
17 17
16 16
15 15
14 14
13
P 13
12 12
11 11
10 10
9 9
8 8
7 7
6 6

2003 2004 Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2005 Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2006 Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2007 Mar Apr May Jun Jul Aug Sep Oct Nov Dec 20

Moving average

5 day moving average=(Day1 price+Day2 price+day3 •


price+day4 price+day5 price)/5.
Smoothing trend •
Simple crossover tactic ( buy when the price rises above •
MA by two days or by a certain percentage(3-5%).
Perform poorly during the trading range. •

6
CASE30 (10,320.74, 10,476.64, 10,320.74, 10,469.78, +149.040), Moving Average (10,125.35)
10700 10700
10600 10600
10500 10500
10400 10400
10300 10300
10200 10200
10100 10100
10000 10000
9900 9900
9800 9800
9700 9700
9600 9600
9500 9500
18 days SMA
9400 9400
9300 9300
9200 9200
9100 9100
9000 9000
8900 8900
8800 8800
8700 8700
8600 8600
8500 Sell 8500
8400 8400
8300 8300
8200 8200
8100 8100
8000 8000
7900 7900
7800 7800
7700 Buy Buy 7700
7600 4-9-2007 7600
7500 7500
7400 7400
7300 7300

30000 30000
25000 25000
20000 20000
15000 15000
10000 10000
x100000 x100000
4 11 18 25 2 9 16 24 30 6 13 20 27 3 10 17 24 1 8 16 22 29 5 12 19 26 3 10 17 24 31 7
ne July August September October November December 2008

ÇæÑÇÓßæã ááÇäÔÇÁ æÇáÕäÇÚÉ (564.980, 575.000, 563.500, 569.120, +9.62000) 630


620
610
600
590
580
570
560
550
540
530
520
510
500
490
480
470
460
450
440
430
420
sell 410
400
390
380
370
buy 360
350
340
330
320
310
300
290
280
270
buy 8-3-2007
260
250
240

19 26 5 12 19 26 2 10 16 23 30 7 14 21 28 4 11 18 25 2 9 16 24 30 6 13 20 27 3 10 17 24 1 8 16 22 29 5 12 19 26 3 10 17 31 7
March April May June July August September October November December 2008

7
MA working poorly during trading range

ÇáÚÑÈíÉ áÍáíÌ ÇáÇÞØÇä (8.76000, 8.89000, 8.76000, 8.76000, -0.02000)


12.9
12.8
12.7
12.6
12.5
12.4
12.3
12.2
12.1
12.0
11.9
11.8
11.7
11.6
11.5
11.4
11.3
11.2
11.1
11.0
10.9
10.8
10.7
10.6
Moving average work poorly during trading range 10.5
10.4
10.3
10.2
10.1
10.0
9.9
9.8
9.7
9.6
9.5
9.4
9.3
9.2
9.1
9.0
8.9
8.8
8.7
8.6
8.5
8.4
8.3
8.2
8.1
8.0
7.9
Many whpsaws 7.8
7.7
7.6
7.5
7.4
7.3
7.2
8 25 2 9 16 29 6 13 20 27 4 11 18 25 3 15 22 29 5 12 19 26 5 12 19 26 2 10 16 23 30 7 14 21 28 4 11 18 25 2 9 16 24 30 6 13 20 27 3 10 17 24 1 8 16 22 29 5 12 19 26 3 10 1724 31 7
October November December 2007 February March April May June July August September October November December 2008

Momentum

Measure rate of ascent or descent of price change •


Momentum= price today-price n days ago •
Zero crossover •
Overbought and oversold by visual inspection •

8
14 days momentum 20
P
15

10

-5

-10
mometum shows a weakness
before the price action
-15

-20

ÇáÓÇÏÓ ãä ÇßÊæÈÑ ááÊäãíå æÇáÇÓÊËãÇÑ (228.990, 229.800, 226.240, 226.500, -1.00000) 260
P
250

240

230

220
210

200

190
180

170
160

150

140
130

120

110

100
8 25 2 9 16 29 6 13 20 27 4 11 18 25 3 15 22 29 5 12 19 26 5 12 19 26 2 10 16 23 30 7 14 21 28 4 11 18 25 2 9 16 24 30 6 13 20 27 3 10 17 24 1 8 16 22 29 5 12 19 26 3 10 1724 31 7
October November December 2007 February March April May June July August September October November December 2008

25

14 days momentum
overbought by visual inspection 20

15

10

-5

-10

-15

oversold by visual inspection


-20

-25

ÇáãÌãæÚå ÇáãÇáíå åíÑãÓ ÇáÞÇÈÖå (63.8700, 64.7800, 63.2100, 63.8700, +0.76000)


65

60

55

50

45

40

35

30
8 25 2 9 16 29 6 13 20 27 4 11 18 25 3 15 22 29 5 12 19 26 5 12 19 26 2 10 16 23 30 7 14 21 28 4 11 18 25 2 9 16 24 30 6 13 20 27 3 10 17 24 1 8 16 22 29 5 12 19 26 3 10 1724 31 7
October November December 2007 February March April May June July August September October November December 2008

9
40
P 35
momentum tells us a lot of information
30

25

20
P
15

10

-5

-10

-15
oversold by visual inspection -20

-25

-30

-35

ÇáÈäß ÇáæØäí ááÊäãíÉ (18.8000, 18.9500, 18.5100, 18.6000, -0.14000)


20.0
19.5
19.0
P
18.5
price followed momentum's
weakness by 14 days 18.0
17.5
17.0
16.5
16.0
P 15.5
15.0
14.5
14.0
13.5
13.0
12.5
12.0
11.5
11.0
10.5
13 20 27 4 11 18 25 3 15 22 29 5 12 19 26 5 12 19 26 2 10 2 9 16 24 30 6 13 20 27 3 10 17 24 1 8 16 22 29 5 12 19 26 3 10 17 31 7
er December 2007 February March April June August September October November December 2008

20

15

10

filtering system
-5

-10
Overbought and over sold area
by visual inspection
-15

CASE30 (10,320.74, 10,476.64, 10,320.74, 10,469.78, +149.040)

10500

10000

9500

9000

8500

8000

7500

7000

6500

6000

5500

5000

4500

June July August September October November December 2007 February March April May June July August September October November December 2008

10
MACD

Main line = 12 days exponential moving average – 26 •


days exponential moving average .
Signal line = 9 days exponential moving average of the •
main line.

MACD (221.487)
250

200

150

100

50
P
0

-50

-100

-150
downside zero crossover means
12 days EMA < 26 days EMA -200

-250

-300

-350

-400

CASE30 (10,320.74, 10,476.64, 10,320.74, 10,469.78, +149.040)

10500

10000

9500

9000
12-26 EMA
P 8500

8000

7500

7000

6500

6000

5500

5000

4500

April May June July August September October November December 2007 February March April May June July August September October November December 2008

11
MACD (0.82376)
10
Sell
9
8
7
6
5
Sell
4
Sell Sell 3
2
1
0
-1
-2
Buy Buy
-3
-4
-5
strong buy signal
-6
extreme oversold
-7
-8

ÇáÚÒ áÕäÇÚÉ ÍÏíÏ ÇáÊÓáíÍ (61.8300, 63.0000, 61.2000, 62.5200, +1.51000) 125
120
115
110
105
100
95
90
85
80
75
70
65
60
55
50
45
40
35
30
25
20
15

April May June July August September November 2006 February April May June July August September November 2007 February April May June July August September November 200

MACD (0.001774)
0.060
Sell 0.055
Sell
0.050
0.045
zero line works as a support level overbought and over sold areas
detrmined by visual inspection 0.040
0.035
0.030
0.025
0.020
0.015
0.010
0.005
0.000
O
Buy -0.005
-0.010
-0.015
Buy
-0.020

ÇáÚÑÝÉ ááãäÓæÌÇÊ (1.75000, 1.80000, 1.74000, 1.80000, +0.04000)


1.90
1.85
1.80
1.75
1.70
1.65
1.60
1.55
1.50
1.45
1.40
O 1.35
1.30
Buy
1.25
1.20
1.15
1.10
1.05
25 3 8 15 22 29 5 12 19 26 5 12 19 26 2 10 16 23 30 7 14 21 28 4 11 18 25 2 9 16 24 30 6 13 20 27 3 10 17 24 1 8 16 22 29 5 12 19 26 3 10 17 31 7
2006 February March April May June July August September October November December 2008

12
MACD Tactics

Buy on the crossover between the main line and the •


signal line to the upside and sell on reverse.
Better buy or sell signals come from extreme overbought •
or oversold areas.

MACD (0.59882)
2.0

Better sell signal


1.5
using trend lines for more confirmation

1.0

0.5

0.0

O -0.5

-1.0

Better buy signal -1.5

-2.0
ÇáÚÒ ááÓíÑÇãíß æ ÇáÈæÑÓáíä - ÇáÌæåÑå (17.1100, 17.6000, 17.0000, 17.5000, +0.46000) 28
27
26
25
24
23
22
21
20
price followed MACD trend line's violation 19
by almost 20 days 18
17
16
15
14
13
12
11
O
10
9
8
7
6

December2006 February March April May June July August September


October November December2007 February March April May June July August SeptemberOctober NovemberDecember2008

13
MACD histogram

Vertical bars that show the difference between the two •


MACD lines.
It has a zero midline. •
Spot the widening and narrowing between the two •
MACD line.
Histogram bars starts to decline while it has been above •
zero line = weakness and vice versa.
It provides early warning. •
It used mainly for spotting early exit signals from existing •
positions.

PS MACD Histogram (0.08063, 0.00000) 0.60


0.55
0.50
0.45
0.40
0.35
0.30
0.25
0.20
0.15
0.10
0.05
0.00
-0.05
-0.10
two MACD lines are narrowing -0.15
O -0.20
MACD (0.59882)
0.9
0.8
0.7
0.6
0.5
0.4
0.3
O
0.2
0.1
0.0
-0.1
-0.2
-0.3
-0.4
-0.5
-0.6
re cross over between the two MACD line
-0.7
occures ofter many days
-0.8
-0.9
-1.0
-1.1
-1.2

ÇáÚÒ ááÓíÑÇãíß æ ÇáÈæÑÓáíä - ÇáÌæåÑå (17.1100, 17.6000, 17.0000, 17.5000, +0.46000) 18


17
16
15
14
13
12
11
10
9
8
7

July August September October November December 2007 February March April May June July August September October November December 2008

14
Using MACD with another oscillator

Use the MACD to get a buy or sell signal while •


stochastic oscillators for timing purpose.

MACD (0.59882) 0.7


sell 0.6
P
0.5
0.4
0.3
O
0.2
0.1
0.0
O -0.1
buy -0.2
-0.3
-0.4
buy -0.5
-0.6
Stochastic Oscillator (90.1639)
sell 90
P P P 80
70
60
50
40
O 30
20
buy 10
O O
Actual entry timing 0

ÇáÚÒ ááÓíÑÇãíß æ ÇáÈæÑÓáíä - ÇáÌæåÑå (17.1100, 17.6000, 17.0000, 17.5000, +0.46000) 18.0
17.5
17.0
16.5
16.0
15.5
15.0
14.5
14.0
13.5
13.0
12.5
12.0
11.5
11.0
10.5
10.0
9.5
9.0
8.5
8.0

13 20 27 4 11 18 25 3 15 22 29 5 12 19 26 5 12 19 26 2 10 16 23 30 7 14 21 28 4 11 18 25 2 9 16 24 30 6 13 20 27 3 10 17 24 1 8 16 22 29 5 12 19 26 3 10 17 31 7
mber December 2007 February March April May June July August September October November December 2008

15
MACD (221.487) 250

200

150

100

O 50

Buy -50

-100
O Buy
-150

Stochastic Oscillator (68.3846)


100
90
80
70
60
50
40
30
20
O 10
Buy
Buy
O 0

CASE30 (10,320.74, 10,476.64, 10,320.74, 10,469.78, +149.040)


10500

10000

9500

9000

O 8500

8000
O
7500
Buy
7000

6500

6000
13 20 27 4 11 18 25 3 15 22 29 5 12 19 26 5 12 19 26 2 10 16 23 30 7 14 21 28 4 11 18 25 2 9 16 24 30 6 13 20 27 3 10 17 24 1 8 16 22 29 5 12 19 26 3 10 17 31 7
mber December 2007 February March April May June July August September October November December 2008

16