2 July Daily technical trader


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2 July Daily technical trader

  1. 1. Page 1 of 2 TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER QE Index: Short-Term – Bounce Back The QE Index snapped its losing streak and rallied aggressively to gain 5.62%. The index witnessed a remarkable recovery as it rebounded capturing both its important levels of 12,000.0 and 12,100.0 in a single swoop. We believe if the index manages to stay above 12,100.0, a further rally toward 12,200.0 seems possible. However, any dip below 12,100.0 may result in bearish implications. Meanwhile, the RSI has shown a bullish divergence. Barwa Real Estate Co.: Short-Term – Rebound BRES surged 7.04% and breached both its resistances of QR36.50 and QR37.50 on the back of large volumes. The stock bounced back after developing a Doji candle pattern on Monday, indicating a trend reversal signal, which was bearish until now. We believe this strong breach of resistances has bullish implications, and provides an upside target of QR38.40 followed by QR39.0. However, traders should exercise caution if the stock dips below the QR37.50 level. Al Rayan Islamic Index: Short-Term – Bounce Back The QERI index halted its decline and surged by 5.95% with the bulls going on a rampage. The index witnessed strong gains as it rebounded to reclaim the 4,000.0 level, keeping its upward hopes alive. We believe the index could test the levels of 4,065.0 and 4,100.0, if it sustains above 4,000. Conversely, any dip below 4,000 may drag the index to test 3,950.0. Meanwhile, the RSI is pointing higher, indicating a possibility of a likely advance. United Development Co.: Short-Term – Rebound UDCD advanced 7.11% and bounced back to surpass its resistances of QR23.42 and QR23.90. Moreover, the stock developed a bullish Marubozu candle pattern, indicating a likely continuation of this rebound. We believe the stock may advance further and test its next resistance of QR24.75. However, any dip below QR23.90 may drag the stock back to test its support at QR23.42. Meanwhile, both the momentum indicators are providing bullish signals. Masraf Al Rayan: Short-Term – Rebound MARK surged 9.89% to overcome both its resistances of QR47.20 and QR48.50 in a single trading session. Volumes were also large on the rise, which is a positive sign. Moreover, the stock formed a bullish Marubozu candle pattern, suggesting a likely advance. Traders could consider buying the stock at the current level and on declines up to QR49.0 for a target of QR51.0, after which the stock can test QR52.60, keeping a stop loss of QR48.50. Vodafone Qatar: Short-Term – Bounce Back VFQS jumped 10% and surpassed both its resistances of QR16.0 and QR16.89 in a single trading session. Moreover, the stock formed a sizable bullish candlestick formation on the daily charts, indicating a potential rally. Meanwhile the RSI has shown a positive divergence. Thus, traders could consider buying the stock at the current level and on declines to QR17.0 for a target of QR17.70- QR18.0 levels, with a strict stop loss of QR16.89.
  2. 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) 12,134.14 DOWN DOWN 12,101.10 12,000.00 12,216.75 12,375.03 Al Rayan Islamic Index (QERI Index) 4,024.81 DOWN DOWN 4,000.00 3,952.27 4,045.76 4,148.08 Banks and Financial Services Banks and Masraf Al Rayan (MARK QD)* 50.00 DOWN DOWN 48.50 47.20 51.00 52.60 Commercial Bank of Qatar (CBQK QD) 64.20 DOWN DOWN 63.25 63.00 64.92 65.75 Doha Bank (DHBK QD) 56.80 DOWN DOWN 56.50 55.80 57.40 58.10 Qatar Islamic Bank (QIBK QD) 87.30 DOWN DOWN 86.90 83.50 90.00 90.70 Qatar International Islamic Bank (QIIK QD) 78.50 DOWN DOWN 75.50 74.40 80.70 83.00 Qatar Insurance (QATI QD) 80.10 UP UP 80.00 79.00 81.00 81.40 Al Khalij Commercial Bank (KCBK QD) 21.00 DOWN DOWN 20.88 20.17 21.49 21.87 Consumer Goods and Services Consumer G Medicare Group (MCGS QD) 80.00 DOWN DOWN 79.00 78.10 82.00 83.00 Al Meera Consumer Goods Co. (MERS QD) 173.50 DOWN DOWN 164.00 161.00 175.00 179.00 Industrials Industrials Industries Qatar (IQCD QD) 175.80 DOWN DOWN 174.90 173.90 180.10 182.50 Qatar Electricity & Water Co. (QEWS QD) 178.50 DOWN DOWN 177.10 176.27 178.90 182.00 Gulf International Services (GISS QD) 95.00 UP UP 93.00 92.00 95.00 97.00 Qatari Investors Group (QIGD QD) 51.80 DOWN DOWN 50.00 48.40 54.40 56.00 Real Estate Real Estate Barwa Real Estate Co. (BRES QD)* 38.00 DOWN DOWN 37.60 37.20 38.04 38.40 United Development Co. (UDCD QD)* 24.10 DOWN DOWN 24.00 23.42 24.75 25.30 Telecom Telecom Ooredoo (ORDS QD) 125.00 DOWN DOWN 124.37 123.70 125.80 128.00 Vodafone Qatar (VFQS QD)* 17.27 DOWN DOWN 16.89 14.03 17.70 19.29 Transportation Transportat Nakilat (QGTS QD) 21.04 DOWN DOWN 20.98 20.83 21.56 21.80 Milaha (QNNS QD) 92.00 UP DOWN 91.20 90.20 93.00 94.90