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12 August Daily technical trader

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  • 1. Page 1 of 2 TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER QE Index: Short-Term – Bounce Back The QE Index snapped its three-day losing streak and moved higher gaining around 62 points (0.47%) to close above 13,100.0. The index witnessed a gap-down opening and was close to testing 13,000.0; however, it rebounded strongly as buyers stepped in and offset the weakness. We believe if the index manages to sustain above 13,100.0, it may set the stage for a higher move. However, any retreat below 13,100.0 may result in consolidation. Medicare Group: Short-Term – Upmove MCGS extended its rally and advanced 1.04% yesterday. The stock is currently sitting exactly on its resistance of QR126.50. A move above this level may indicate a further extension of its gains and the stock may test QR128.80. However, any failure to move above QR126.50 may result in a sideways movement. Meanwhile, both the momentum indicators are indicating that the stock may be ready for a further rally. Al Rayan Islamic Index: Short-Term – Bounce Back The QERI Index rose by 0.62% and extended its gains for the second straight session. Unfortunately for the bulls, the index closed just below its important resistance of 4,529.0. Meanwhile, traders are advised to build onto their positions only if the index decisively breaches the 4,529.0 level. Conversely, any failure to move above 4,529.0 on a closing basis may result in the index moving in a range of 4,445.0 on the lower side and 4,529.0 on the higher side. Qatari Investors Group: Short-Term – Upmove QIGD gained 1.57% and surpassed the important resistance of QR57.70. Moreover, the stock developed a bullish Marubozu candle pattern indicating a likely continuation of this upmove. We believe based on the recent higher push the stock may test and surpass the 55-day moving average targeting QR60.60. Further, both the momentum indicators are providing bullish signals. However, any penetration below QR57.70 may halt its upmove. Doha Bank: Short-Term –Rebound DHBK cleared the resistances of QR57.40 and the 21-day moving average in a single swoop after consolidating below it over the past few days. We believe this strong breach of resistances has bullish implications and provides an upside target of QR58.20, followed by the 55-day moving average. Moreover, the RSI has shown a bullish divergence, while the MACD has crossed the signal line into the positive territory. However, a dip below QR57.78 may drag the stock. Barwa Real Estate Co.: Short-Term – Rebound BRES showed signs of recovery yesterday rebounding after witnessing a steep fall back in July. The stock breached its resistances of QR39.70 and QR40.10 in a single trading session, which is a positive sign. Moreover, the stock developed a bullish Marubozu candlestick pattern indicating a likely higher move. Thus, traders may consider buying the stock at the current level for a target of QR41.17, with a strict stop loss of QR40.10.
  • 2. Contacts Saugata Sarkar Abdullah Amin, CFA Shahan Keushgerian Sahbi Kasraoui Ahmed Al-Khoudary QNB Financial Services SPC Head of Research Senior Research Analyst Senior Research Analyst Manager - HNWI Head of Sales Trading – Institutional Contact Center: (+974) 4476 6666 Tel: (+974) 4476 6534 Tel: (+974) 4476 6569 Tel: (+974) 4476 6509 Tel: (+974) 4476 6544 Tel: (+974) 4476 6548 PO Box 24025 saugata.sarkar@qnbfs.com.qa abdullah.amin@qnbfs.com.qa shahan.keushgerian@qnbfs.com.qa sahbi.alkasraoui@qnbfs.com.qa ahmed.alkhoudary@qnbfs.com.qa Doha, Qatar DISCLAIMER: This publication has been prepared by QNB Financial Services SPC (“QNBFS”) a wholly-owned subsidiary of Qatar National Bank (“QNB”). QNBFS is regulated by the Qatar Financial Markets Authority and the Qatar Exchange; QNB is regulated by the Qatar Central Bank. This publication expresses the views and opinions of QNBFS at a given time only. It is not an offer, promotion or recommendation to buy or sell securities or other investments, nor is it intended to constitute legal, tax, accounting, or financial advice. We therefore strongly advise potential investors to seek independent professional advice before making any investment decision. Although the information in this report has been obtained from sources that QNBFS believes to be reliable, we have not independently verified such information and it may not be accurate or complete. While this publication has been prepared with the utmost degree of care by our analysts, QNBFS does not make any representations or warranties as to the accuracy and completeness of the information it may contain, and declines any liability in that respect. QNBFS reserves the right to amend the views and opinions expressed in this publication at any time. It may also express viewpoints or make investment decisions that differ significantly from, or even contradict, the views and opinions included in this report. COPYRIGHT: No part of this document may be reproduced without the explicit written permission of QNBFS. Page 2 of 2 *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 55- day 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 long-term trends. 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. Definitions: 1> Simple Moving Average (SMA): A SMA is the average of the closing price of a security for a given period. 2> 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. 3> 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. Name (Ticker) Last Close Trend Support Resistance Short Term Long Term First Second First Second Qatar Exchange Index (QE Index) 13,137.43 UP UP 13,079.52 13,000.00 13,195.88 13,350.54 Al Rayan Islamic Index (QERI Index) 4,527.90 UP UP 4,500.00 4,444.86 4,528.58 4,638.81 Banks and Financial Services Banks and Masraf Al Rayan (MARK QD) 54.00 FLAT FLAT 52.50 49.75 54.00 55.80 Commercial Bank of Qatar (CBQK QD) 67.10 DOWN FLAT 66.50 65.90 67.30 68.30 Doha Bank (DHBK QD)* 57.80 UP DOWN 57.40 56.50 58.20 60.00 Qatar Islamic Bank (QIBK QD) 109.50 UP UP 107.00 104.50 109.50 111.90 Qatar International Islamic Bank (QIIK QD) 84.60 DOWN UP 83.50 82.80 85.00 86.10 Qatar Insurance (QATI QD) 91.80 UP UP 91.00 88.90 92.40 94.80 Al Khalij Commercial Bank (KCBK QD) 22.00 DOWN DOWN 21.99 21.80 22.35 22.60 Consumer Goods and Services Consumer G Medicare Group (MCGS QD)* 126.50 UP UP 121.50 118.20 126.50 128.80 Al Meera Consumer Goods Co. (MERS QD) 193.00 UP UP 190.00 187.80 194.80 196.00 Industrials Industrials Industries Qatar (IQCD QD) 171.50 DOWN DOWN 169.50 167.80 172.30 173.90 Qatar Electricity & Water Co. (QEWS QD) 185.60 FLAT FLAT 184.00 182.00 186.00 188.00 Gulf International Services (GISS QD) 117.80 UP UP 115.00 111.90 118.10 119.50 Qatari Investors Group (QIGD QD)* 58.10 UP FLAT 57.70 56.20 60.60 61.30 Real Estate Real Estate Barwa Real Estate Co. (BRES QD)* 40.20 DOWN FLAT 40.10 39.70 41.00 41.80 United Development Co. (UDCD QD) 30.00 UP UP 29.90 29.30 30.61 31.93 Telecom Telecom Ooredoo (ORDS QD) 129.00 DOWN DOWN 126.00 123.70 129.70 131.50 Vodafone Qatar (VFQS QD) 19.59 FLAT FLAT 19.29 18.75 20.00 20.78 Transportation Transportat Nakilat (QGTS QD) 24.90 UP UP 24.45 24.12 25.30 25.90 Milaha (QNNS QD) 93.90 DOWN FLAT 93.00 92.00 94.50 95.10