14 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 – Upmove The QE Index continued its northward journey for the third consecutive session and gained around 244 points (1.83%) to close at its intraday high. The index remained in upmove mode throughout the day and showed no signs of profit-booking as the bulls went berserk. Moreover, the index developed a bullish Marubozu candle pattern indicating a likely continuation of this upmove toward 13,600.0. Conversely, 13,500.0 may act as psychological support. Industries Qatar: Short-Term – Rebound IQCD rebounded and breached the 21-day and 55-day moving averages along with the descending trendline, which had restricted its bullish move in the past. This strong breach of resistances has bullish implications. We believe based on the recent price action and spike in volumes the stock may proceed further to test QR180.0. However, any retreat below QR178.30 may drag the stock down. Meanwhile, the RSI is showing strength and is moving up in a bullish manner. Al Rayan Islamic Index: Short-Term – Upmove The QERI Index extended its winning streak for the third straight session and rose around 75 points to settle above 4,650.0 for the first time since May. The index witnessed a positive opening and continued to carry on the bullish momentum breaching its important resistance of 4,639.0. Further, both the momentum indicators support the index for a higher move toward its all-time high. Meanwhile, the index could find support at the 4,639.0 level. Al Meera Consumers Goods Co.: Short-Term – Uptrend MERS surpassed the important resistance of QR194.80 and tagged a new high yesterday. Notably, volumes were also large on the rise indicating rising optimism among traders. Moreover, the stock has been moving along the rising channel over the past few weeks and is in uptrend mode. We believe with both the momentum indicators providing bullish signals, the stock may continue to record a new high. However, traders should watch out for QR194.80 for any reversal. Masraf Al Rayan: Short-Term – Bounce Back MARK gained 3.67% and cleared the resistances of the 21-day moving average and QR55.80 in a single swoop. Moreover, the stock moved above the range after consolidating below it over the past few weeks, which is a positive sign. Further, the RSI has shown a bullish divergence indicating a likely higher move. Thus, traders could consider buying the stock at the current level and on declines up to QR56.0 for a target of QR57.30, with a stop loss of QR55.80. Vodafone Qatar: Short-Term – Breakout VFQS surged 7.86% and breached the resistances of QR20.0 and QR20.78 for the first time since May along with the ascending wedge with increased participation. Moreover, the stock developed a long bullish Marubozu candlestick pattern indicating a likely continuation of this upmove. We believe the stock may continue its bullish momentum and advance further to test QR21.99. Further, both the indicators are in the buy zone supporting this bullish sentiment.
  • 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) 13,522.79 UP UP 13,500.00 13,350.54 13,584.34 13,694.19 Al Rayan Islamic Index (QERI Index) 4,655.16 UP UP 4,638.81 4,600.00 4,672.95 4,700.00 Banks and Financial Services Banks and Masraf Al Rayan (MARK QD)* 56.50 UP UP 55.80 54.00 57.30 59.90 Commercial Bank of Qatar (CBQK QD) 68.60 UP UP 68.30 67.30 69.50 70.00 Doha Bank (DHBK QD) 60.50 UP UP 60.00 58.00 61.00 62.00 Qatar Islamic Bank (QIBK QD) 109.80 UP UP 109.50 107.00 111.90 112.50 Qatar International Islamic Bank (QIIK QD) 85.00 FLAT UP 83.50 82.80 85.00 86.10 Qatar Insurance (QATI QD) 94.10 UP UP 92.40 91.00 94.60 96.00 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) 126.40 UP UP 121.50 118.20 126.50 128.80 Al Meera Consumer Goods Co. (MERS QD)* 197.00 UP UP 194.80 190.00 198.80 200.00 Industrials Industrials Industries Qatar (IQCD QD)* 179.00 UP UP 178.30 175.50 180.00 181.40 Qatar Electricity & Water Co. (QEWS QD) 188.00 UP UP 186.00 184.00 188.00 190.00 Gulf International Services (GISS QD) 121.10 UP UP 121.00 118.10 122.50 124.00 Qatari Investors Group (QIGD QD) 58.60 UP UP 57.70 56.20 60.60 61.30 Real Estate Real Estate Barwa Real Estate Co. (BRES QD) 42.10 UP UP 41.80 41.00 42.50 43.50 United Development Co. (UDCD QD) 30.40 UP UP 29.90 29.30 30.61 31.93 Telecom Telecom Ooredoo (ORDS QD) 130.00 DOWN DOWN 129.70 126.00 131.50 133.90 Vodafone Qatar (VFQS QD)* 21.40 UP UP 20.78 20.00 21.99 22.30 Transportation Transportat Nakilat (QGTS QD) 25.00 UP UP 24.45 24.12 25.30 25.90 Milaha (QNNS QD) 96.60 UP UP 96.50 95.10 97.80 98.30