TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER
QE Index: Short-Term – Neutral
Al Rayan Islamic Index: Short-Term – Neutral
Widam Food Co.: Short-Term – Breakout
The QE Index snapped an eight-day winning streak and declined
around 34 points (-0.29%) to close below the 11,700.0 psychological
level. The index tagged a new 52-week high of 11,756.23, but later
declined in the day due to profit-booking. Meanwhile, the index has
immediate support near 11,660.0. Any dip below this level may drag
the index to test 11,600.0. Conversely, the index needs to move
above 11,734.0 to continue its upmove.
The QERI Index fell around (-0.14%) after developing a Doji candle
pattern on Monday, thus confirming the trend reversal pattern.
However, the index rebounded from its day’s low of 3,329.44 and
managed to recover majority of its losses to close at 3,357.49. We
believe until the time the index trades above 3,330.0 bulls need not
worry. However, a retreat below 3,330.0 may pull the index to test
3,300.0. Meanwhile, both the indicators are providing mixed signals.
WDAM surged above the resistances of QR48.10 and QR49.30 in a
single swoop on the back of large volumes, thus recovering good
chunk of the losses it suffered over the past couple of weeks. We
believe the current higher push has enough steam to test and surpass
the 21-day moving average, targeting the QR51.0 level. Moreover,
the RSI has shown a bullish divergence, while the MACD is about to
cross the signal line from below indicating a positive signal.
Vodafone Qatar: Short-Term – Downmove
Milaha: Short-Term – Breakout
Al Meera Consumer Goods Co.: Short-Term – Pullback
VFQS penetrated below the interim support of QR12.40 yesterday.
Moreover, the stock failed to make any further headway since topping
the rally at QR12.66 and is steadily declining over the past few days.
In addition, the RSI is moving down from the overbought territory,
while the MACD is waning from the rising mode. We believe the stock
may drift down further and test QR12.15. However, if the stock
manages to reclaim QR12.40, it may attract buying interest.
QNNS continued its upmove moving above QR95.10, tagging
another new 52-week high. Moreover, the RSI is moving strongly in
the overbought territory, while the MACD is widening away from the
signal line in a bullish manner indicating that this rally may continue
for a longer time. We believe the stock could march ahead toward
QR97.0 as long as it trades above the QR95.10 level. However, any
dip below this level on a closing basis may halt its upmove.
MERS failed to make any further progress above QR159.0 and
developed a bearish engulfing candle pattern on the back of large
volumes. This pattern usually indicates a bearish reversal pattern. We
believe although the stock is trading close to its interim support of
QR154.90, it is unlikely to cling onto it and drift lower to test
QR151.50. Moreover, the RSI is pointing down indicating weakness.
However, if the stock sustains above QR154.90, it may move higher.
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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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