TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER
QE Index: Short-Term – Upmove
Al Rayan Islamic Index: Short-Term – Neutral
Masraf Al Rayan: Short-Term – Downmove
The QE Index continued its upward momentum and rallied
aggressively moving up around 178 points (1.54%), tagging another
new 52-week high. The index witnessed a gap-up opening and
cleared the 11,600.0 and 11,700.0 psychological levels in a single
swoop. We believe the index is currently in uptrend mode and may
continue to advance toward the 11,750.0-11,780.0 levels. However,
the 11,700.0 level must be closely watched for any reversal signs.
The QERI Index extended its bullish rally and rose around 1.14%,
tagging another new all-time high of 3,382.68. However, the index
reversed and closed near its day’s open as buyers backed away from
higher prices developing a Doji candle pattern. This pattern usually
indicates a trend reversal which was bullish until now. We believe the
index may consolidate or decline before its next upmove. However, a
close above 3,382.68 may keep its uptrend intact.
MARK has been experiencing steady decline over the past few days
and penetrated below the support of the QR39.10 level. Moreover,
the stock developed a bearish Marubozu candle pattern indicating the
possibility of a further pullback. In addition, the RSI has shown a
bearish divergence, while the MACD is stalling from the rising mode
indicating a likely retreat toward QR38.0. However, a move above
QR39.10 on a closing basis may halt its downmove.
Ooredoo: Short-Term – Breakout
Milaha: Short-Term – Breakout
Qatar Electricity & Water Co.: Short-Term – Upswing
ORDS cleared the resistances of QR149.0 along with the 21-day
moving average for the first time since January on the back of large
volumes. This strong breach of resistances has bullish implications
and provides an upside target of QR155.0. Moreover, the stock has
support for a further higher move from both the momentum indicators,
which are pointing up. However, a dip below the 21-day moving
average may indicate a false breakout.
QNNS surpassed the resistances of QR92.0 and QR94.50 in a single
trading session, tagging a 52-week high. Notably, volumes were also
high on the breakout indicating that potential buyers are stepping in.
Moreover, the stock developed a long bullish Marubozu candle
pattern indicating a likely continuation of the upmove. Meanwhile, the
RSI is moving up in a bullish manner, while the MACD is widening
away from the signal line on the upside.
QEWS continued its upmove tagging another new all-time high. The
stock has been moving higher over the past few days and is in bullish
mode. Meanwhile, the RSI and the MACD lines are moving higher
and are showing no immediate trend reversal signs. We believe the
stock may continue to advance and tag new highs until it trades
above the QR190.0 level. However, if the stock dips below this level it
may result in consolidation before its next upmove.
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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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