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Prepared by Makor Capital Research Team Barry Lyss blyss@makor-capital.com Tel: +972 3 545 3767

1 PROBE: a proprietary index measuring the break-even probability of a given deal.

04 March 2014

Technical Summary European Utilities

Quick Overview:

With most European Stock indices nearly flat since the beginning of the year (Italian

MIB being the exception up 5%) we wish to highlight what we believe is an

interesting technical setup on some specific names in European Utility sector.

After a two year bottoming process (2011-2013) the Utility Index (SX6P) finally broke

out in the beginning of this year. Based on the height of this bottom formation our

technical target is 25%.

In this paper below we wish to highlight not only the technical structure on the Utility

Index itself but also on a few chosen names in the sector such as RWE GY, GSZ FP,

FUM1V FH, EOAN GY & PNN LN which seem to offer an attractive technical structure.

The utility sector not only offers an attractive dividend yield (average of 6%to 8%

dividend yield) which is something that should be highly appreciated given the

average return on European Indices this year so far, it also has a very clear and

attractive bullish technical structure, especially in a medium term perspective.

04 March 2014

European Utility Sector (sx6p index 295.70 last)

o The index was consolidating for more than 2 years between 2011 and 2013 and finally broke out to the upside in February 2014.

o Given the height of the bottom formation our measured target is 324 o Also the weekly chart (2nd chart below) highlights the importance of the breakout and argues

for a significant move higher towards 345.00 o We would use a dip to 278-280 to enter into a long position targeting a move to 324 with a

stop just below the Dec2013 low and 200dma at 265-270.

Support: 291 (yesterday low), 284-285, 278 & 265-270 Resistance: 298

Daily

04 March 2014

Weekly

04 March 2014

RWE GY (28.465 last)

o The stock is testing the neckline of the Bullish inverted H&S pattern (28.40-80). This pattern argues for a medium term move to 37.00

o If we do get a move below 28.40-80 the next support level stands at 26.50-27.35 which is the 55dma and the rising trend line support area

o On the weekly chart below (2nd chart) one can see that the stock has broken above its 2008-2014 downtrend which it-self argues for a move higher

Strategy: Long from 27.31, target 36.5 with a stop at entry level

Support: 28.40-80, 27.35 & 26.50 Resistance: 29.30, 30.73 & 33.90

Daily

04 March 2014

Weekly

04 March 2014

GDZ FP (18.475 LAST)

o The Stock is now testing the Oct 2013 cycle highs which is also an important resistance level on the weekly chart (2nd chart below)

o A sustain move above 18.65-83 would argue for a move to 19.56 and then towards the upper boundary of the rising channel at 20.00

o As long as the Price continues to hold above 17.53 (recent higher low) a move higher is our preferred scenario

Support: 17.53, 17.06 (55dma) & 16.01 (January 29th low) Resistance: 18.65-83, 19.56 & 20.00

Daily

04 March 2014

Weekly

04 March 2014

Fortum (fUM1V FH 16.84 LAST)

o The stock is trading in a rising channel since January 2013. In order to hold this path price must continue to hold above 15.93-16.15 (200dma & rising channel support)

o On the upside, watch 17.12 and then 18.19 a move above 17.12 is needed to shift momentum to the upside and a move above 18.19 is needed to trigger a new bull cycle

o On the downside, a move below 15.66 would negate the path of higher highs and higher lows and dampen our bullish view

Support: 16.15 (channel support), 15.93 & 15.66 Resistance: 17.12 & 18.19

Daily

04 March 2014

EOAN GY (13.615 last)

o The stock is trading in some kind of consolidation which in our perspective is viewed as a bullish continuation pattern

o We would attempt to buy the stock near its 200dma which has proven to be a good indication in a medium term perspective

o Eventually we like the technical structure and believe that a move higher to fill the gap from Nov 2012 at 15.17 is on the cards

Strategy: Attempt to buy at 13.16, target 15.17 with a stop below 12.60

Support: 13.45 (yesterday low), 13.16 & 12.88 Resistance: 14.27, 14.48 & 15.17

Daily

04 March 2014

PNN LN (737 last)

o The stock is breaking above its all-time high at 736 which was established on July 2012 o Based on the consolidation pattern the breakout target is set at 887 o A move lower towards the consolidation breakout level at 715 should provide a good buying

opportunity

Support: 719.2, 714.5 & 653-665 Resistance: 746.5 (Feb 28th high)

Daily

Weekly

04 March 2014

Short Term Trading Strategies

Europe equities:

Single stock:

Commodities:

Position Entry Date Index Entry Level Target S/L Level Exit Date Exit Level P/L

Seller 2/1/2014 SX5E Index 3091 2990 3135 14/01/2014 3,135 -1.42%

Seller 10/01/2014 DAX Index 9476 9257 9549 14/01/2014 9,549 -0.77%

Buyer 27/01/2014 SX5E Index 3023 3120 2990 29/01/2014 2,990 -1.10%

Buyer 28/01/2014 DAX Index 9400 9257 9794 29/01/2014 9,257 -1.52%

Buyer 28/01/2014 CAC Index 4168 4109 4350 29/01/2014 4,109 -1.42%

Seller 10/02/2014 SX5E Index 3045 2920 3077 11/02/2014 3,077 -1.05%

Seller 11/02/2014 IBEX Index 10075 9100 10174 14/02/2014 10,174 -0.98%

Seller 11/02/2014 FTSEMIB Index 19840 18788 20167 12/02/2014 20,167 -1.65%

Seller 18/02/2014 CAC Index 4327 4100 4356 20/02/2014 4,356 -0.67%

Seller 18/02/2014 SX5E Index 3113 2944 3176 -0.30%

Position Entry Date Index Entry Level Target S/L Level Exit Date Exit Level P/L

Buyer 23/01/2014 MLNX US Equity 42.32 51 40.20 24/01/2013 40.2 -5.01%

Buyer 18/12/2013 EOAN GY Equity 13.00 14.14 13.49 27/01/2014 13.49 3.77%

Buyer 29/01/2014 DBK GY Equity 37.25 42 36.3 31/01/2014 35.89 -3.65%

Buyer 22/01/2014 BARC LN Equity 278 330 268 03/02/2014 265.7 -4.42%

Buyer 27/01/2014 CA FP Equity 25.05 29 26.65 10/02/2014 26.65 6.39%

Buyer 24/01/2014 FRES LN Equity 797 873 800 10/02/2014 868 8.91%

Buyer 14/01/2014 GDX US Equity 22.47 26.60 22.80 14/02/2014 26.60 18.38%

Buyer 03/02/2014 GSZ FP Equity 16.465 18.50 17.37 24/02/2014 17.985 9.23%

Buyer 14/01/2014 GDX US Equity 22.47 30 24.75 26/02/2014 26.33 17.18%

Buyer 22/01/2014 JAZ SM Equity 8.845 12.72 9.40 28/02/2014 9.785 10.68%

Buyer 24/02/2014 TEF SM Equity 11.43 12.60 11.00 03/03/2014 10.985 -3.89%

Buyer 24/02/2014 EWZ US Equity 40.94 45.00 40.00 03/03/2014 40.00 -2.30%

Buyer 04/02/2014 RWE GY Equity 27.31 36.5 27.3 6.01%

Seller 13/02/2014 AAPL US Equity 542 385 557 2.63%

Seller 24/02/2014 EN FP Equity 30.645 25.60 29.88 5.51%

Total Average Return 4.63%

Position Entry Date Index Entry Level Target S/L Level Exit Date Exit Level P/L

Buyer 10/12/2013 GOLDS Comdty 1238 1433 & 1,686 1235 26/02/2014 1341 8.32%

Buyer 27/02/2014 SILV Comdty 21.34 23.08 20.49 -0.35%

04 March 2014

Foreign Exchange:

Position Entry Date Index Entry Level Target S/L Level Exit Date Exit Level P/L

Seller 14/01/2014 USDCAD Curncy 1.0893 1.0750 1.0950 14/01/2014 1.0950 -0.52%

Buyer 20/01/2014 AUDUSD Curncy 0.8810 0.9080 0.8720 24/01/2014 0.8720 -1.02%

Buyer 15/01/2013 USDJPY Curncy 104.55 108.00 102.87 24/01/2014 102.87 -1.61%

Buyer 14/01/2014 USDBRL Curncy 2.3612 2.4500 2.4240 29/01/2014 2.4500 3.76%

Buyer 27/01/2014 USDJPY Curncy 102.66 109.5 101.49 03/02/2014 101.49 -1.14%

Buyer 16/01/2014 USDMXN Curncy 13.2800 14.3000 13.1800 04/02/2014 13.3850 0.79%

Seller 24/01/2014 NZDCAD Curncy 0.9153 0.8850 0.9130 06/02/2014 0.9130 0.25%

Seller 04/02/2014 EURRUB Curncy 47.65 46.15 47.45 10/02/2014 47.45 0.42%

Seller 30/01/2014 USDBRL Curncy 2.4270 2.3970 2.3970 10/02/2014 2.397 1.24%

Buyer 23/01/2014 EURGBP Curncy 0.8210 0.8750 0.826 12/02/2014 0.826 0.61%

Buyer 06/02/2014 USDNOK Curncy 6.22 6.55 6.10 13/02/2014 6.10 -1.93%

Buyer 16/01/2014 EURSEK Curncy 8.7900 9.0500 8.6850 21/02/2014 8.996 2.34%

Buyer 14/01/2014 AUDNZD Curncy 1.0692 1.1300 1.0692 27/02/2014 1.0692 0.00%

Buyer 20/02/2014 USDBRL Curncy 2.3713 2.48 2.3250 27/02/2014 2.3250 -1.95%

Buyer 28/01/2014 BRLCLP Curncy 226.76 255.00 239.00 28/02/2014 239.00 5.40%

Buyer 17/01/2014 USDSEK Curncy 6.4715 6.9000 6.4000 -0.53%

Buyer 07/02/2014 USDMXN Curncy 13.32 14.30 12.96 -0.40%

Buyer 10/02/2014 USDILS Curncy 3.5220 3.65 3.46 -0.96%

Buyer 12/02/2014 NOKSEK Curncy 1.0528 1.18 1.045 1.75%

Seller 13/02/2014 USDJPY Curncy 101.97 95 103.60 0.13%

Buyer 18/02/2014 USDNOK Curncy 6.0476 6.31 5.96 -0.63%

Buyer 27/02/2014 EURUSD Curncy 1.3661 1.43 1.364 0.79%

04 March 2014

Research Disclaimer

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