TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER
QE Index: Short-Term – Upmove
Al Rayan Islamic Index: Short-Term – Upmove
Qatar Insurance: Short-Term – Upmove
The QE Index gained for the second straight session and rose
around 35 points (0.30%) to close at 11,642.04. The index respected
its support of the 21-day moving average and continued to advance
as buying interest pushed the price higher. However, the index needs
to move above the 11,660.0 level in order to continue its bullish
momentum. Any failure to move above this level may drag the index
to test 11,605.73. The RSI is moving up in a bullish manner.
The QERI Index extended its rally and moved higher by 0.63% to
close the session at 3,393.40. The index breached the important
resistance of 3,382.68 as bulls continued their domination for the
second consecutive day. We believe if the index manages to cling
onto 3,382.68, then there is a possibility of a further advance. Any
decline below 3,382.68 may result in a pullback to the congestion
zone. Meanwhile, both the indicators support a higher move.
QATI cleared the important resistance of QR65.68 after surpassing
the 21-day moving average on Thursday. Moreover, the stock has
been trading along the ascending trendline over the past few days
and is gradually gaining strength. We believe the stock may now
approach the QR66.90 level as it has little resistance until then.
However, a dip below QR65.68 may pull the stock to test the 21-day
moving average. Meanwhile, the RSI is moving up.
Qatar Electricity & Water Co.: Short-Term – Upmove
National Leasing Holding Co.: Short-Term – Downmove
Al Meera Consumer Goods Co.: Short-Term – Breakout
QEWS penetrated above the resistances of the 21-day moving
average and QR170.91 in a single trading session. We believe if the
stock manages to hold onto QR170.91 on a closing basis, then a
continuous rise toward QR174.36 is possible. However, any retreat
below QR170.91 may drag the stock to test its 21-day moving
average. Meanwhile, the RSI has rejected the mid-line and is moving
up toward the overbought territory.
NLCS has been in downtrend mode and is moving along the
descending trendline over the past few trading sessions. We believe
until the time the stock trades below this descending trendline the
upmove seems to be in jeopardy and may continue its declining
trend. Moreover, with both the momentum indicators pointing down
NLCS’ preferred direction seems to be on the downside and may test
QR27.52 (February 2011 low).
MERS surged higher and breached the resistances of QR154.90 and
QR159.0 in a single swoop. Notably, volumes were also high on the
breakout indicating rising buying interest. We believe this strong
breach of resistances has bullish implications and provides an upside
target of QR164.0. Meanwhile, the RSI is moving strongly in the
overbought territory, while the MACD has crossed the signal line into
the positive territory indicating the likely continuation of this rally.
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Qatar Exchange Index (QE Index)
Al Rayan Islamic Index (QERI Index)
Masraf Al Rayan (MARK QD)
Commercial Bank of Qatar (CBQK QD)
Doha Bank (DHBK QD)
Qatar Islamic Bank (QIBK QD)
Qatar International Islamic Bank (QIIK QD)
Qatar Insurance (QATI QD)*
National Leasing Holding Co. (NLCS QD)*
Widam Food Co. (WDAM QD)
Al Meera Consumer Goods Co. (MERS)*
Industries Qatar (IQCD QD)
Qatar Electricity & Water Co. (QEWS QD)*
Gulf International Services (GISS QD)
Qatari Investors Group (QIGD QD)
Barwa Real Estate Co. (BRES QD)
United Development Co. (UDCD QD)
Ooredoo (ORDS QD)
Vodafone Qatar (VFQS QD)
Nakilat (QGTS QD)
Milaha (QNNS QD)
Banks and Financial Services
Consumer Goods and Services
*These stocks are today’s suggested ideas
Overall Methodology: The charts and descriptions on Page 1 provide an indicative view of the future direction of the equities mentioned. The table on page 2 has been provided to denote historical movements in certain stocks. The historical trend analysis uses 21- and 55day SMAs for indicating short-term and long-term trends, respectively. Based on these SMAs, the historical direction of the trend is denoted as UP, DOWN or FLAT.
Selection of Key Stocks of the Day: Key stocks’ selection is based on our analysis of 19 members of the QE Index (excludes QNBK QD). Analysis includes identifying trends (short-term as well as long-term), patterns and support/resistance levels.
Trend Direction: The methods used to determine trend direction are subjective in nature. We use 21-day SMA and 55-day SMA, absolute price movements, price movements relative to SMAs and accurately drawn trend lines and chart patterns to determine the short- and
Investment Horizon: The definition of short term and long term depends upon investors’ preferences and their investment objectives. As a rule of thumb, the time horizon for traders/short-term trend is 1-3 weeks while it is 1-3 months for investors/long-term trend.
Combining Technical and Fundamental Analysis: Investors can combine technical analysis (TA) with fundamental analysis (FA) to maximize their investment returns. While the “True Value” of stocks could be estimated by FA, the entry and exit timings could be fine
tuned using technical analysis to benefit from short-term movements in stock prices.
Trading Tactics: The trend direction should be analyzed based on the time-horizon of your investments. In general, investors attempt selling close to resistance levels during a downtrend and attempt buying close to support levels during uptrend.
Simple Moving Average (SMA): A SMA is the average of the closing price of a security for a given period.
RSI (Relative Strength Index): A technical momentum indicator that ranges from 0 to 100 and compares the stock’s recent price movements by evaluating recent gains and losses. Stocks with RSI above 70 could be considered overbought and below 30 could be
considered oversold. If the RSI falls below 70, it is a bearish signal. On the other hand, if the RSI rises above 30 it is considered bullish. We use a RSI of 14 days.
MACD (Moving Average Convergence Divergence): MACD denotes the relationship between two moving averages, which is used to spot changes in strength, direction, momentum and duration of a stock price trend. The MACD is calculated by subtracting the 26-day
exponential moving average (EMA) from the 12-day EMA. A nine-day EMA of the MACD, called the signal line, is also plotted on top of the MACD, functioning as a trigger for buy/sell signals. The MACD line above the signal line provides a positive signal and vice versa.
Ahmed M. Shehada
QNB Financial Services SPC
Head of Research
Tel: (+974) 4476 6534
Head of Trading
Tel: (+974) 4476 6535
Head of Sales
Tel: (+974) 4476 6533
Manager - HNWI
Tel: (+974) 4476 6544
Contact Center: (+974) 4476 6666
PO Box 24025
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