Makor Securities Dover House 34 Dover Street W1S 4NG London England +44 207 290 5782 Prepared

by Makor Capital Research Team

Makor Capital Rogovin Tower 11 Menahem Begin Road 52681 Ramat Gan Israel +972 2 545 3777 Barry Lyss blyss@makor-capital.com

Makor Capital Markets Rue de la Croix-d'Or, 27 1204 Geneva Switzerland +41 223 106 916 Tel: +972 3 545 3767

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.

1 PROBE:

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

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Weekly

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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 20082014 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

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Weekly

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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)
Daily

Resistance: 18.65-83, 19.56 & 20.00

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Weekly

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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
Daily

Resistance: 17.12 & 18.19

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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
Daily

Resistance: 14.27, 14.48 & 15.17

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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
Daily

Resistance: 746.5 (Feb 28th high)

Weekly

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Short Term Trading Strategies Europe equities:

Position Seller Seller Buyer Buyer Buyer Seller Seller Seller Seller Seller Entry Date 2/1/2014 10/01/2014 27/01/2014 28/01/2014 28/01/2014 10/02/2014 11/02/2014 11/02/2014 18/02/2014 18/02/2014 Index SX5E Index DAX Index SX5E Index DAX Index CAC Index SX5E Index IBEX Index FTSEMIB Index CAC Index SX5E Index Entry Level 3091 9476 3023 9400 4168 3045 10075 19840 4327 3113 Target 2990 9257 3120 9257 4109 2920 9100 18788 4100 2944 S/L Level Exit Date 3135 9549 2990 9794 4350 3077 10174 20167 4356 3176 14/01/2014 14/01/2014 29/01/2014 29/01/2014 29/01/2014 11/02/2014 14/02/2014 12/02/2014 20/02/2014 Exit Level 3,135 9,549 2,990 9,257 4,109 3,077 10,174 20,167 4,356 P/L -1.42% -0.77% -1.10% -1.52% -1.42% -1.05% -0.98% -1.65% -0.67% -0.30%

Single stock:
Position Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Seller Seller Entry Date 23/01/2014 18/12/2013 29/01/2014 22/01/2014 27/01/2014 24/01/2014 14/01/2014 03/02/2014 14/01/2014 22/01/2014 24/02/2014 24/02/2014 04/02/2014 13/02/2014 24/02/2014 Index MLNX US Equity EOAN GY Equity DBK GY Equity BARC LN Equity CA FP Equity FRES LN Equity GDX US Equity GSZ FP Equity GDX US Equity JAZ SM Equity TEF SM Equity EWZ US Equity RWE GY Equity AAPL US Equity EN FP Equity Entry Level 42.32 13.00 37.25 278 25.05 797 22.47 16.465 22.47 8.845 11.43 40.94 27.31 542 30.645 Target 51 14.14 42 330 29 873 26.60 18.50 30 12.72 12.60 45.00 36.5 385 25.60 S/L Level 40.20 13.49 36.3 268 26.65 800 22.80 17.37 24.75 9.40 11.00 40.00 27.3 557 29.88 Exit Date 24/01/2013 27/01/2014 31/01/2014 03/02/2014 10/02/2014 10/02/2014 14/02/2014 24/02/2014 26/02/2014 28/02/2014 03/03/2014 03/03/2014 Exit Level 40.2 13.49 35.89 265.7 26.65 868 26.60 17.985 26.33 9.785 10.985 40.00 P/L -5.01% 3.77% -3.65% -4.42% 6.39% 8.91% 18.38% 9.23% 17.18% 10.68% -3.89% -2.30% 6.01% 2.63% 5.51% 4.63%

Total Average Return

Commodities:
Position Buyer Buyer Entry Date 10/12/2013 27/02/2014 Index GOLDS Comdty SILV Comdty Entry Level 1238 21.34 Target 1433 & 1,686 23.08
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S/L Level 1235 20.49

Exit Date 26/02/2014

Exit Level 1341

P/L 8.32% -0.35%

Foreign Exchange:
Position Seller Buyer Buyer Buyer Buyer Buyer Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Seller Buyer Buyer Entry Date 14/01/2014 20/01/2014 15/01/2013 14/01/2014 27/01/2014 16/01/2014 24/01/2014 04/02/2014 30/01/2014 23/01/2014 06/02/2014 16/01/2014 14/01/2014 20/02/2014 28/01/2014 17/01/2014 07/02/2014 10/02/2014 12/02/2014 13/02/2014 18/02/2014 27/02/2014 Index USDCAD Curncy AUDUSD Curncy USDJPY Curncy USDBRL Curncy USDJPY Curncy USDMXN Curncy NZDCAD Curncy EURRUB Curncy USDBRL Curncy EURGBP Curncy USDNOK Curncy EURSEK Curncy AUDNZD Curncy USDBRL Curncy BRLCLP Curncy USDSEK Curncy USDMXN Curncy USDILS Curncy NOKSEK Curncy USDJPY Curncy USDNOK Curncy EURUSD Curncy Entry Level 1.0893 0.8810 104.55 2.3612 102.66 13.2800 0.9153 47.65 2.4270 0.8210 6.22 8.7900 1.0692 2.3713 226.76 6.4715 13.32 3.5220 1.0528 101.97 6.0476 1.3661 Target 1.0750 0.9080 108.00 2.4500 109.5 14.3000 0.8850 46.15 2.3970 0.8750 6.55 9.0500 1.1300 2.48 255.00 6.9000 14.30 3.65 1.18 95 6.31 1.43 S/L Level 1.0950 0.8720 102.87 2.4240 101.49 13.1800 0.9130 47.45 2.3970 0.826 6.10 8.6850 1.0692 2.3250 239.00 6.4000 12.96 3.46 1.045 103.60 5.96 1.364 Exit Date 14/01/2014 24/01/2014 24/01/2014 29/01/2014 03/02/2014 04/02/2014 06/02/2014 10/02/2014 10/02/2014 12/02/2014 13/02/2014 21/02/2014 27/02/2014 27/02/2014 28/02/2014 Exit Level 1.0950 0.8720 102.87 2.4500 101.49 13.3850 0.9130 47.45 2.397 0.826 6.10 8.996 1.0692 2.3250 239.00 P/L -0.52% -1.02% -1.61% 3.76% -1.14% 0.79% 0.25% 0.42% 1.24% 0.61% -1.93% 2.34% 0.00% -1.95% 5.40% -0.53% -0.40% -0.96% 1.75% 0.13% -0.63% 0.79%

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04 March 2014