TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER
QE Index: Short-Term – Upmove
Al Rayan Islamic Index: Short-Term – Neutral
Barwa Real Estate Co.: Short-Term – Breakout
The QE Index after consolidating for just a single day on Tuesday,
continued its upmove and rose around 132 points (1.13%), tagging a
new 52-week high. Moreover, the index surpassed the 11,700.0 and
11,800.0 psychological levels in a single swoop for the first time since
2008, as bulls were under full control. We believe based on the
current higher push the index may extend its rally toward 11,850.0.
Meanwhile, both indicators are providing bullish signals.
The QERI Index continued its upward momentum and moved higher
around 0.53% after witnessing a reversal on Tuesday. Moreover, the
index witnessed buying interest throughout the day as bulls
overpowered the bears. However, the index faces its next hurdle at
the 3,382.68 level, which it needs to surpass in order to gain further
momentum. Any failure to move above this level may result in
consolidation before the next upmove.
BRES cleared the resistance of QR32.0 for the first time since
December on the back of large volumes, which is a positive signal.
We believe if the stock manages to cling onto QR32.0, it may set the
stage for the stock to test QR32.85. However, a dip below the QR32.0
level may result in a false breakout. Meanwhile, the RSI is moving up
in a bullish manner, while the MACD has crossed the signal line into
positive territory indicating the possibility of a further rally.
Nakilat: Short-Term – Breakout
Milaha: Short-Term – Breakout
Doha Bank: Short-Term – Upmove
QGTS surpassed the resistances of QR21.83, QR22.0 and the
ascending trendline in a single trading session, tagging a 52-week
high. The recent price action and rising volumes indicate that QGTS
may be ready to push the price higher toward the QR22.50-QR22.80
levels. Meanwhile, the RSI is moving strongly in the overbought
territory, while the MACD is diverging away from the signal line toward
an upside, thus supporting our bullish outlook for the stock.
QNNS surged 4.06% and continued its bullish run surpassing the
QR98.0 and QR99.0 levels, tagging another new 52-week high. The
stock is aggressively moving up over the past few days and is
showing no imminent trend reversal signs. With both the momentum
indicators in uptrend mode it seems the stock is poised to tag new 52week highs. However, a dip below the QR99.0 level may halt the
current upmove and pull the stock to test the QR98.0 level.
DHBK moved above the QR66.0 level and tagged a 52-week high
yesterday on the back of large volumes. Moreover, the stock has
been in bullish mode since clearing the 21-day moving average and is
gradually gaining strength. We believe the stock may continue its rally
and tag a new 52-week high. Meanwhile, the RSI and the MACD
lines are pointing higher indicating a likely upmove. However, traders
may need to keep a close watch near QR66.0 for any reversal signs.
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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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