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19 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 ended the session higher with a gain of around 228 points (1.7%) after moving sideways for the past two days. The index started the day on a subdued note, but rebounded to breach the 13,500.0 and 13,600.0 levels in a single swoop. Moreover, the index developed a bullish Marubozu candle pattern, indicating a likely extension of this rally toward 13,700.0-13,750.0. Conversely, 13,600.0 may act as a psychological support. Masraf Al Rayan: Short-Term – Bounce Back MARK found support near the 21-day moving average and rebounded, ending in a small bullish candlestick formation. Moreover, the stock gained 2.19% and cleared the key resistance of QR55.80, which is a positive signal. Further, the RSI in the buy zone is supporting this bullish sentiment. Traders could consider buying the stock at the current level for a target of the QR57.30 level with a strict stop loss of the QR55.80 level. Al Rayan Islamic Index: Short-Term – Uptrend The QERI Index after taking a breather showcased an enthusiastic performance to record a new all-time high. The index surpassed 4,639.0 and continued moving northwards showing no signs of profit- booking, as it fervently gained strength to strength. We believe the index will continue its positive momentum to tag new highs, as it has support from both the momentum indicators. On the flip side, the index may find support near the 4,685.0 level. Qatar Islamic Bank: Short-Term – Upmove QIBK jumped 4.07% and cleared the ascending triangle resistances of QR111.0 and QR112.5, tagging a 52-week high. Notably, volumes were also large on the rise, reflecting the optimism among traders. We believe this strong breach of resistances has bullish implications and the stock may extend this rally toward QR118.0 in the next few trading sessions. Meanwhile, both the momentum indicators are positively poised, signifying an upside potential for the stock. Industries Qatar: Short-Term – Upmove IQCD moved higher on the expected scenario yesterday, and gained 2.42%, breaching both its resistances of QR183.10 and QR184.50. The stock is currently sitting exactly on its resistance of QR186.40. We believe the current higher push and a spike in volumes suggest that the stock has enough steam to surpass QR186.40, targeting QR188.50. Meanwhile, both the momentum indicators are pointing higher, indicating a likely upmove. Medicare Group: Short-Term – Upmove MCGS advanced 2.40% and breached the key resistance of QR126.50 after feigning a failure in the past few attempts. Moreover, the stock developed a bullish Marubozu candlestick pattern, indicating a likely continuation of this upmove. Further, the RSI is moving strongly into the overbought territory, indicating strength. Based on the recent price action, the stock may further rally toward QR128.80. However, a retreat below QR126.50 may drag the stock.
  • 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) 13,644.64 UP UP 13,584.34 13,447.24 13,770.09 13,847.11 Al Rayan Islamic Index (QERI Index) 4,707.59 UP UP 4,685.20 4,638.81 4,750.00 4,800.00 Banks and Financial Services Banks and Masraf Al Rayan (MARK QD)* 56.00 UP UP 55.80 54.00 57.30 59.90 Commercial Bank of Qatar (CBQK QD) 68.00 FLAT UP 67.30 66.50 68.30 69.50 Doha Bank (DHBK QD) 60.60 UP UP 60.00 58.00 61.00 62.00 Qatar Islamic Bank (QIBK QD)* 115.00 UP UP 112.50 111.00 115.00 118.00 Qatar International Islamic Bank (QIIK QD) 84.50 DOWN UP 83.50 82.80 85.00 85.90 Qatar Insurance (QATI QD) 96.50 UP UP 96.00 94.60 97.00 97.50 Al Khalij Commercial Bank (KCBK QD) 22.00 FLAT FLAT 21.99 21.49 22.35 22.49 Consumer Goods and Services Consumer G Medicare Group (MCGS QD)* 127.90 UP UP 126.50 124.00 128.80 130.00 Al Meera Consumer Goods Co. (MERS QD) 195.00 UP UP 194.80 192.00 197.50 198.80 Industrials Industrials Industries Qatar (IQCD QD)* 186.40 UP UP 184.50 183.10 186.40 188.50 Qatar Electricity & Water Co. (QEWS QD) 188.00 UP UP 186.00 184.00 188.00 190.00 Gulf International Services (GISS QD) 120.20 UP UP 118.10 115.00 121.00 122.50 Qatari Investors Group (QIGD QD) 61.00 UP UP 60.60 57.70 61.30 62.40 Real Estate Real Estate Barwa Real Estate Co. (BRES QD) 42.00 UP UP 41.80 41.00 42.50 43.20 United Development Co. (UDCD QD) 30.10 UP UP 29.90 29.30 30.45 30.61 Telecom Telecom Ooredoo (ORDS QD) 125.30 DOWN DOWN 123.70 122.90 126.00 128.50 Vodafone Qatar (VFQS QD) 21.55 UP UP 20.78 20.00 21.99 22.30 Transportation Transportat Nakilat (QGTS QD) 24.35 UP UP 24.12 24.00 24.45 25.30 Milaha (QNNS QD) 96.50 UP UP 95.10 93.00 96.50 97.80