12 June Daily technical trader Presentation Transcript
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TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER
QE Index: Short-Term – Pullback
The QE Index declined around 58 points (-0.45%) to close the
session at 12,912.81. The index witnessed a gap-up opening and
momentarily moved above the 13,020.0 level, but took a U-turn from
its intraday high of 13,043.69 and penetrated below its key support of
12,940.0. We believe the index may continue to drift lower and
witness further weakness if it fails to climb above 12,940.0. However,
the bias may become positive if the index reclaims 12,940.0.
Commercial Bank of Qatar: Short-Term – Downmove
CBQK continued its declining run after penetrating below its support
of QR65.75 on Tuesday. Moreover, the stock has been experiencing
selling pressure since topping the rally at QR71.80 and is registering
losses. We believe with volumes picking up on the decline and both
the indicators looking weak, the stock may not cling onto its support of
QR64.92 and further drift down to test QR64.15. However, if the stock
stays above QR64.92 it may attempt a rebound.
Al Rayan Islamic Index: Short-Term – Pullback
The QERI Index continued to move south for the fourth straight
session and shed around -0.61% to close the session at 4,331.74.
The index made a strong opening, but failed to hold onto its gains and
reversed from its day’s high, breaching its important support of
4,341.10. We believe the bears may continue to dominate the bulls
until the index stays below the 4,341.10 level and drag it lower toward
4,300.0. Conversely, a move above 4,341.10 may attract buyers.
United Development Co.: Short-Term – Pullback
UDCD has been drifting lower since moving below the 21-day moving
average and further dipped below its support of QR25.30. Notably,
volumes were also large on the decline which is a negative signal.
Moreover, the negative slope of the RSI and MACD lines indicates
that the stock may continue its decline. Thus, traders could consider
selling the stock at the current level for a first target of QR24.75,
followed by the 55-day moving average with a stop loss of QR25.30.
Qatar Islamic Bank: Short-Term – Rebound
QIBK gained 0.30% and continued to move higher yesterday.
Moreover, the stock found support of the 21-day moving average and
ended developing a sizable bullish candlestick formation on the daily
charts, indicating a likely continuation of this rebound. Further, the RSI
is in the buy zone supports this bullish sentiment. Traders could
consider buying the stock at the current level and on declines up to
QR99.00 for a target of QR100.0 with a stop loss of QR98.84.
Masraf Al Rayan: Short-Term – Pullback
MARK failed to make any further headway above QR55.0 and
extended its losses by moving lower. Therefore, QR55.0 poses a
hurdle which the stock must overcome to advance further.
Meanwhile, the stock has been moving along the descending
trendline over the past few days and is in declining mode. We believe
the stock may continue to drift lower and test QR52.30, followed by
QR51.80. Further, both the indicators are providing bearish signals.
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
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*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
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.
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) 12,912.81 DOWN UP 12,850.00 12,768.17 12,939.80 13,019.55
Al Rayan Islamic Index (QERI Index) 4,331.74 DOWN UP 4,301.89 4,247.34 4,341.10 4,400.00
Banks and Financial Services Banks and
Masraf Al Rayan (MARK QD)* 53.00 DOWN UP 52.30 51.80 55.00 57.30
Commercial Bank of Qatar (CBQK QD)* 65.00 DOWN DOWN 64.92 64.15 66.50 67.30
Doha Bank (DHBK QD) 61.00 DOWN DOWN 61.00 59.90 62.00 63.00
Qatar Islamic Bank (QIBK QD)* 99.40 UP UP 98.50 96.00 100.00 102.00
Qatar International Islamic Bank (QIIK QD) 83.70 DOWN FLAT 83.00 80.70 86.10 87.80
Qatar Insurance (QATI QD) 80.00 UP UP 79.00 78.00 80.70 81.40
Al Khalij Commercial Bank (KCBK QD) 23.00 DOWN FLAT 22.90 22.50 23.49 24.00
Consumer Goods and Services Consumer G
Medicare Group (MCGS QD) 84.00 DOWN UP 83.00 81.70 85.00 87.80
Al Meera Consumer Goods Co. (MERS QD) 181.90 DOWN UP 180.00 175.00 183.00 185.00
Industries Qatar (IQCD QD) 181.20 DOWN DOWN 180.00 178.30 181.40 182.50
Qatar Electricity & Water Co. (QEWS QD) 190.00 FLAT UP 188.00 185.00 190.00 192.00
Gulf International Services (GISS QD) 90.80 DOWN DOWN 90.00 86.60 91.40 93.00
Qatari Investors Group (QIGD QD) 61.70 DOWN DOWN 61.30 59.70 62.40 64.70
Real Estate Real Estate
Barwa Real Estate Co. (BRES QD) 41.90 UP UP 41.40 41.00 43.00 44.50
United Development Co. (UDCD QD)* 24.90 DOWN FLAT 24.75 24.50 25.30 26.00
Ooredoo (ORDS QD) 147.50 DOWN FLAT 147.40 145.00 149.00 151.00
Vodafone Qatar (VFQS QD) 20.20 UP UP 20.00 19.29 20.79 21.25
Nakilat (QGTS QD) 23.25 DOWN FLAT 23.00 22.45 23.40 23.90
Milaha (QNNS QD) 92.40 DOWN DOWN 91.20 90.00 93.20 95.10