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3 August Daily market report
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  • 1. Page 1 of 2 TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER QE Index: Short-Term – Neutral The QE Index continued its southward journey for the third straight session and shed around 76 points (-0.58%) to close below the 12,900.0 mark. The index witnessed a gap-down opening, but recovered from its intraday low of 12,803.38. However, traders may need to keep a close watch on the 55-day moving average, as any dip below this level may pull the index further down. Conversely, the bias may turn positive if the index moves above the 12,940.0 level. United Development Co.: Short-Term – Upmove UDCD advanced 1.61% and moved closer to its key resistance of QR28.55. Moreover, the stock developed a bullish harami candlestick pattern, which usually indicates an upmove. We believe if the stock manages to move above QR28.55, it may spark additional buying interest and push the stock further up to test QR29.0. However, any failure to move above QR28.55 may result in consolidation. Meanwhile, both the indicators are providing bullish signals. Al Rayan Islamic Index: Short-Term – Neutral The QERI Index continued its decline for the third consecutive day and fell by -0.47% to settle below the 4,300.0 level. The index made a weak start to the session, however buyers stepped in and helped trim majority of its losses. Meanwhile, the index is trading close to the 55- day moving average. Any retreat below this level may further drag the index to test 4,250.0. On the flip side, the index needs to close above 4,300.0 in order to keep its upward hopes alive. Milaha: Short-Term – Pullback QNNS continued on its declining mode and penetrated below the supports of QR91.30 and QR90.20 in a single swoop. Moreover, the stock has been experiencing selling pressure since topping its current rally around QR100.0. Meanwhile, the stock developed a bearish Marubozu candle pattern, indicating a likely continuation of this pullback. We believe the stock may drift down further and test QR88.80. However, a move above QR90.20 may halt its pullback. Qatar Islamic Bank: Short-Term – Bounce Back QIBK gained 2.62% and cleared the important resistance of the ascending triangle at QR104.50 after moving sideways over the past few days. Moreover, the stock developed a bullish engulfing candle pattern, which indicates a likely higher move. Further, the RSI in the buy zone supports this positive sentiment. Thus, traders could consider buying the stock at the current level and on declines up to QR105.0 for a target of QR107.0 with a stop loss of QR104.50. Medicare Group: Short-Term – Upmove MCGS cleared the resistance of QR101.30 and made further headway. Moreover, the stock developed a bullish Marubozu candle pattern, indicating a likely continuation of this upmove. We believe the stock may rally further to test QR104.50 followed by QR105.90. Meanwhile, the RSI is moving strongly in the overbought territory, while the MACD is diverging up and away from the signal line. On the other hand, a dip below QR103.0 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) 12,877.31 UP FLAT 12,850.00 12,768.70 12,939.80 13,000.00 Al Rayan Islamic Index (QERI Index) 4,295.02 UP FLAT 4,247.34 4,200.00 4,301.89 4,341.10 Banks and Financial Services Banks and Masraf Al Rayan (MARK QD) 53.20 UP DOWN 52.50 51.80 54.00 55.80 Commercial Bank of Qatar (CBQK QD) 68.00 UP UP 67.30 66.50 68.30 69.50 Doha Bank (DHBK QD) 56.30 DOWN DOWN 55.50 54.40 56.50 57.40 Qatar Islamic Bank (QIBK QD)* 105.70 UP UP 104.50 102.00 107.00 109.50 Qatar International Islamic Bank (QIIK QD) 83.40 DOWN DOWN 81.50 80.70 83.50 85.00 Qatar Insurance (QATI QD) 90.00 UP UP 88.90 87.30 91.00 92.40 Al Khalij Commercial Bank (KCBK QD) 22.50 UP FLAT 22.35 21.87 22.60 23.00 Consumer Goods and Services Consumer G Medicare Group (MCGS QD)* 104.00 UP UP 103.00 101.50 104.50 105.90 Al Meera Consumer Goods Co. (MERS QD) 181.70 UP UP 179.00 175.00 183.00 185.00 Industrials Industrials Industries Qatar (IQCD QD) 173.40 DOWN DOWN 172.30 171.00 175.50 178.30 Qatar Electricity & Water Co. (QEWS QD) 182.70 DOWN DOWN 182.00 180.00 184.00 186.00 Gulf International Services (GISS QD) 114.00 UP UP 111.90 109.00 116.00 119.50 Qatari Investors Group (QIGD QD) 51.20 DOWN DOWN 51.00 49.75 52.40 54.00 Real Estate Real Estate Barwa Real Estate Co. (BRES QD) 37.70 DOWN DOWN 37.40 36.80 38.50 39.20 United Development Co. (UDCD QD)* 28.40 UP UP 27.20 26.45 28.55 29.00 Telecom Telecom Ooredoo (ORDS QD) 128.00 DOWN DOWN 126.00 123.70 129.70 132.00 Vodafone Qatar (VFQS QD) 19.10 UP FLAT 18.75 17.99 19.29 20.00 Transportation Transportat Nakilat (QGTS QD) 23.80 UP FLAT 23.60 23.00 24.12 24.50 Milaha (QNNS QD)* 89.70 DOWN DOWN 88.80 87.30 90.20 91.30