19 January Daily technical trader


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19 January Daily technical trader

  1. 1. 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. Page 1 of 2
  2. 2. Name (Ticker) Last Close Trend Short Term Support Long Term First Resistance Second First Second Qatar Exchange Index (QE Index) 11,106.13 UP UP 11,060.00 11,000.00 11,170.00 11,250.00 Al Rayan Islamic Index (QERI Index) 3,226.45 UP UP 3,199.21 3,151.22 3,240.37 3,300.00 Masraf Al Rayan (MARK QD)* 35.15 UP UP 35.00 34.15 36.00 37.25 Commercial Bank of Qatar (CBQK QD) 75.00 UP UP 74.50 73.30 75.30 76.00 Doha Bank (DHBK QD)* 64.10 UP UP 63.90 63.30 64.50 66.00 Qatar Islamic Bank (QIBK QD) 73.80 UP UP 73.00 72.30 75.00 75.70 Qatar International Islamic Bank (QIIK QD) 70.80 UP UP 70.00 69.40 71.20 72.00 Qatar Insurance (QATI QD) 72.80 UP UP 72.50 71.41 73.15 74.30 National Leasing Holding Co. (NLCS QD)* 30.50 DOWN DOWN 30.00 29.55 31.00 31.45 Widam Food Co. (WDAM QD) 52.10 DOWN UP 51.90 51.00 53.00 54.00 Al Meera Consumer Goods Co. (MERS) 142.00 UP UP 140.50 139.50 142.70 144.00 Industries Qatar (IQCD QD) 179.80 UP UP 178.90 177.00 180.00 181.50 Qatar Electricity & Water Co. (QEWS QD) 183.00 UP UP 181.60 180.00 184.00 185.00 Gulf International Services (GISS QD) 71.40 UP UP 70.00 69.00 72.00 73.15 Qatari Investors Group (QIGD QD)* 47.65 DOWN UP 46.00 44.20 47.70 49.50 Barwa Real Estate Co. (BRES QD) 31.50 UP UP 31.20 30.85 31.60 32.00 United Development Co. (UDCD QD) 23.23 UP UP 22.85 22.50 23.35 23.50 Ooredoo (ORDS QD) 144.00 UP UP 143.00 141.50 145.00 145.90 Vodafone Qatar (VFQS QD) 11.35 UP UP 11.19 11.00 11.44 11.60 Nakilat (QGTS QD) 21.00 UP UP 20.60 20.00 21.07 21.32 Milaha (QNNS QD) 90.50 UP UP 90.00 89.40 91.30 93.00 Banks and Financial Services Banks and Consumer Goods and Services Consumer G Industrials Industrials Real Estate Real Estate Telecom Telecom Transportation Transportat *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 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. Contacts Saugata Sarkar Ahmed M. Shehada Keith Whitney Sahbi Kasraoui QNB Financial Services SPC Head of Research Tel: (+974) 4476 6534 saugata.sarkar@qnbfs.com.qa Head of Trading Tel: (+974) 4476 6535 ahmed.shehada@qnbfs.com.qa Head of Sales Tel: (+974) 4476 6533 keith.whitney@qnbfs.com.qa Manager - HNWI Tel: (+974) 4476 6544 sahbi.alkasraoui@qnbfs.com.qa Contact Center: (+974) 4476 6666 PO Box 24025 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