TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER
QE Index: Short-Term – Upmove
Al Rayan Islamic Index: Short-Term – Neutral
National Leasing Holding Co.: Short-Term – Downmove
The QE Index extended its relentless rally tagging another new 52week high. Moreover, the index moved above the 11,100.0
psychological level for the first time since 2008, which is a positive
development. Meanwhile, each time the index moves to the support
of the ascending trendline, high demand pushes prices higher. We
believe the index may maintain its upward momentum and continue
its higher wave toward the 11,150.0 level.
The QERI Index declined around 3 points (-0.10%) to close the
session at 3,226.45. The index momentarily moved higher, testing its
all-time high of 3,240.37, but later reversed and closed near its day’s
open, developing a Doji candle pattern. This action revealed
indecision on the part of buyers and sellers. The immediate support is
seen around 3,200.0, while the resistance exits near 3,240.37. The
index may oscillate between these levels until further confirmation.
NLCS breached the support of both the 21-day moving average
(currently at QR30.51) and the 55-day moving average (currently at
QR30.73) in a single trading session. We believe the stock is
witnessing a steady decline over the past few days and may continue
to head lower targeting QR30.0. Moreover, with the RSI pointing
down and the MACD line closing the signal line from above, NLCS’
preferred direction seems to be on the downside.
Masraf Al Rayan: Short-Term – Breakout
Doha Bank: Short-Term – Breakout
Qatari Investors Group: Short-Term – Downmove
MARK eventually surpassed the resistance of QR35.0 after two failed
attempts earlier and tagged a new all-time high. Notably, volumes
were also high on the breakout indicating rising buying interest. We
believe MARK could continue to tag new highs as long as it clings
onto the QR35.0 level. Meanwhile, the stock has support for a higher
move from the MACD line, which is moving higher from the signal
line. However, a dip below QR35.0 may indicate a false breakout.
DHBK cleared the important resistance of QR63.90 and tagged a 52week high on the back of large volumes. Moreover, the stock has
been trending strong and is in uptrend mode since clearing the
QR60.0 level. With the RSI moving strongly in the overbought
territory, DHBK is poised to tag new 52-week highs. However, traders
may need to keep a close watch on QR63.90 for any reversal signs,
as a dip below this level may result in consolidation.
QIGD penetrated below the supports of the 21-day moving average
(currently at QR48.42) and QR47.70 in a single swoop. The stock has
been experiencing selling pressure over the past few days and is
moving along the descending trendline. The prognosis at this time
frame suggests a further downside with both the RSI and the MACD
lines trending weak. We believe the stock may drift lower and test
QR46.0, followed by QR44.20, thus supporting our bearish outlook.
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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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