14 May Daily technical trader


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14 May Daily technical trader

  1. 1. Page 1 of 2 TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER QE Index: Short-Term – Uptrend The QE Index continued its uptrend for the fourth straight session and rallied around 107 points (0.82%) to close at fresh record highs of 13,174.74. The index witnessed a gap-up opening and cleared the 13,100.0 level for the first time as the bulls were under complete dominance over the bears. We believe the index has strong momentum going in and may further continue its rally, tagging new highs. Meanwhile, both the indicators are providing bullish signals. Qatari Investors Group: Short-Term – Downmove QIGD penetrated below the 21-day moving average on Monday and continued to drift lower yesterday, breaching its important support of QR64.70. Moreover, the stock has been in declining mode since topping the rally around QR71.0 and is moving along the descending trendline. With both the indicators in downtrend mode we believe the stock may continue its decline and test QR62.40. However, a close above QR64.70 may provide some relief. Al Rayan Islamic Index: Short-Term – Uptrend The QERI Index moved higher by 0.32% for the fourth consecutive day and tagged a new all-time high of 4,341.10, but later trimmed its gains to close at 4,319.51. The index managed to cling onto the support near 4,302.0 and continued its rally, paving the way for new highs. We believe as long as the index stays above the 4,302.0 level it may further scale up. However, any retreat below 4,302.0 may drag the index back into the congestion zone. Al Khalij Commercial Bank: Short-Term – Upmove KCBK breached the QR23.23 level on Monday and continued its upward momentum gaining 0.52% yesterday. The recent price action and spike in volumes indicate that the stock may test and surpass its immediate resistance of QR23.49, targeting QR24.0. However, a dip below QR23.23 may result in a pullback. Meanwhile, the RSI is moving up, while the MACD is showing signs of recovery closing the signal line in a bullish manner. Gulf International Services: Short-Term – Uptrend GISS extended its rally and tagged a fresh all-time high yesterday. Moreover, the stock has been in uptrend mode since moving above the 21-day moving average and is registering strong gains. We believe the stock may continue its bullish momentum recording new highs. Meanwhile, the RSI is moving strongly in the overbought territory, while the MACD is diverging away from the signal line in a bullish manner with no immediate trend reversal signs. Commercial Bank of Qatar: Short-Term – Pullback CBQK has been in declining mode and is moving along the descending trendline over the past few days. We believe although the stock is trading close to its immediate support of QR68.40 it is unlikely to cling onto it and decline further to test QR67.80. However, if the stock manages to reclaim the 21-day moving average it may halt its pullback. Meanwhile, the RSI is moving down toward the mid-line, while the MACD is growing more bearish.
  2. 2. Contacts Saugata Sarkar Keith Whitney Sahbi Kasraoui QNB Financial Services SPC Head of Research Head of Sales Manager - HNWI Contact Center: (+974) 4476 6666 Tel: (+974) 4476 6534 Tel: (+974) 4476 6533 Tel: (+974) 4476 6544 PO Box 24025 saugata.sarkar@qnbfs.com.qa keith.whitney@qnbfs.com.qa sahbi.alkasraoui@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) 13,174.74 UP UP 13,100.00 13,019.55 13,200.00 13,280.00 Al Rayan Islamic Index (QERI Index) 4,319.51 UP UP 4,301.89 4,247.34 4,342.00 4,370.00 Banks and Financial Services Banks and Masraf Al Rayan (MARK QD) 50.30 UP UP 49.75 48.50 51.80 53.00 Commercial Bank of Qatar (CBQK QD)* 68.50 DOWN UP 68.40 67.30 69.80 70.70 Doha Bank (DHBK QD) 65.20 UP UP 63.90 62.00 65.70 66.40 Qatar Islamic Bank (QIBK QD) 91.80 UP UP 90.00 89.00 92.00 93.20 Qatar International Islamic Bank (QIIK QD) 89.90 UP UP 89.00 87.80 90.50 92.00 Qatar Insurance (QATI QD) 81.40 UP UP 79.00 77.00 82.00 83.75 Al Khalij Commercial Bank (KCBK QD)* 23.37 UP UP 23.23 22.90 23.49 24.00 Consumer Goods and Services Consumer G Medicare Group (MCGS QD) 89.30 UP UP 87.80 87.00 90.00 92.00 Al Meera Consumer Goods Co. (MERS QD) 185.00 FLAT UP 183.00 180.00 185.00 187.80 Industrials Industries Qatar (IQCD QD) 191.00 UP UP 188.50 186.40 192.50 194.60 Qatar Electricity & Water Co. (QEWS QD) 189.90 UP UP 188.00 186.00 190.00 195.00 Gulf International Services (GISS QD)* 99.80 UP UP 95.50 93.00 100.00 102.00 Qatari Investors Group (QIGD QD)* 64.50 UP UP 62.40 61.30 64.70 68.40 Real Estate Barwa Real Estate Co. (BRES QD) 38.00 DOWN UP 37.40 36.80 38.40 39.20 United Development Co. (UDCD QD) 26.05 UP UP 25.29 24.70 26.45 27.00 Telecom Ooredoo (ORDS QD) 146.00 DOWN UP 145.00 143.00 148.00 149.00 Vodafone Qatar (VFQS QD) 18.41 UP UP 17.99 17.30 18.75 19.29 Transportat Nakilat (QGTS QD) 25.10 UP UP 24.61 24.20 25.55 25.90 Milaha (QNNS QD) 98.90 UP UP 98.30 96.50 100.10 102.50