19 March Daily technical trader Presentation Transcript
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TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER
QE Index: Short-Term – Neutral
The QE Index moved higher and rose around 17 points (0.15%) for
the second consecutive day. However, the index trimmed its gains
after registering an intraday high of 11,478.32 and closed the session
at 11,418.76, developing a Doji candle pattern. The index has
immediate support of 11,400.0. Any retreat below this level may
witness selling pressure, which may pull the index to test 11,338.41.
However, if the index holds onto 11,400.0, it may advance further.
Widam Food Co.: Short-Term – Breakout
WDAM surged 6.80% and cleared the resistances of the 21-day
moving average and QR44.50 in a single swoop. We believe this
strong breach of resistances has bullish implications. Moreover, with
volumes also picking up indicates that potential buyers are stepping
in. The stock may continue its rally and advance further to test
QR47.80 as it has little resistance until then. Meanwhile, both the
indicators are in uptrend mode indicating continued strength.
Al Rayan Islamic Index: Short-Term – Upmove
The QERI Index continued its bullish momentum and tagged another
new all-time high as the bulls dominated the bears for the fourth
consecutive session. The index has been witnessing a strong rally
over the past few days and is in upmove mode. Moreover, with both
the momentum indicators providing bullish signals the index is poised
to tag new highs. However, the 3,458.51 level must be closely
watched for any reversal signs.
Vodafone Qatar: Short-Term – Upmove
VFQS continued its upmove and breached the resistance of
QR12.25. The stock now faces its immediate resistance of QR12.40.
A move above this level may spark additional buying interest, which
may push the stock further to test QR12.66. However, any dip below
QR12.25 may drag the stock to test its 21-day moving average.
Meanwhile, the bullishness in the RSI is intact, while the MACD is
about to cross the signal line into the positive territory.
Masraf Al Rayan: Short-Term – Downmove
MARK has been experiencing selling pressure since moving below
the 21-day moving average and is in declining mode. The stock
penetrated below its support of QR38.0 on Monday and continued to
decline yesterday. Further, with both the momentum indicators
pointing down, MARK’s preferred direction seems to be on the
downside. We believe the stock may continue to decline and test
QR36.55. However, a close above QR38.0 may halt its downmove.
Qatari Investors Group: Short-Term – Upmove
QIGD cleared the important resistance of QR54.0 on the back of large
volumes after failing in the past few attempts, which is a positive
signal. We believe the stock may continue to march ahead and test
QR56.20 as long as it trades above the QR54.0 level. However, a dip
below this level may result in a pullback. Meanwhile, the stock has
support for a higher move from the RSI, which is moving strongly in
the overbought territory, while the MACD is growing more bullish.
Saugata Sarkar Ahmed M. Shehada Keith Whitney Sahbi Kasraoui QNB Financial Services SPC
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*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
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.
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) 11,418.76 DOWN UP 11,400.00 11,338.41 11,484.45 11,520.55
Al Rayan Islamic Index (QERI Index) 3,478.24 UP UP 3,458.51 3,432.26 3,482.00 3,500.00
Banks and Financial Services Banks and
Masraf Al Rayan (MARK QD)* 37.60 DOWN UP 36.55 35.10 38.00 39.10
Commercial Bank of Qatar (CBQK QD) 61.00 DOWN DOWN 60.50 59.30 61.67 62.75
Doha Bank (DHBK QD) 57.20 DOWN DOWN 56.20 55.20 58.20 60.00
Qatar Islamic Bank (QIBK QD) 73.10 DOWN DOWN 71.80 70.50 75.00 76.00
Qatar International Islamic Bank (QIIK QD) 71.50 DOWN UP 70.30 69.40 71.50 72.80
Qatar Insurance (QATI QD) 64.00 DOWN UP 62.64 60.96 64.00 66.90
National Leasing Holding Co. (NLCS QD) 28.25 DOWN DOWN 28.00 27.52 29.15 29.95
Consumer Goods and Services Consumer G
Widam Food Co. (WDAM QD)* 45.55 UP DOWN 44.50 43.20 47.80 48.75
Al Meera Consumer Goods Co. (MERS) 162.10 UP UP 159.00 154.90 164.00 165.00
Industries Qatar (IQCD QD) 178.20 DOWN DOWN 175.00 173.00 178.30 180.00
Qatar Electricity & Water Co. (QEWS QD) 171.30 FLAT UP 170.91 168.00 174.36 176.64
Gulf International Services (GISS QD) 84.40 UP UP 82.00 80.00 86.00 88.00
Qatari Investors Group (QIGD QD)* 55.30 UP DOWN 54.00 52.40 56.20 58.00
Barwa Real Estate Co. (BRES QD) 35.80 UP UP 34.80 34.20 36.30 37.00
United Development Co. (UDCD QD) 21.85 DOWN DOWN 21.70 21.50 22.00 22.20
Ooredoo (ORDS QD) 139.00 DOWN DOWN 138.50 136.00 139.90 141.00
Vodafone Qatar (VFQS QD)* 12.30 UP UP 12.25 12.09 12.40 12.66
Nakilat (QGTS QD) 21.11 DOWN UP 20.90 20.50 21.83 22.19
Milaha (QNNS QD) 92.90 DOWN UP 91.30 90.00 95.10 96.50