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20 May Daily technical trader

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  • 1. Page 1 of 2 TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER QE Index: Short-Term – Pullback The QE Index continued to move in the southward direction for the fourth straight session and declined around 232 points (-1.79%) to close at 12,788.23. The index fell below 13,000.0 and subsequently faced heavy selling pressure penetrating below the 12,900.0 and 12,800.0 levels as well as the 21-day moving average in a single swoop. Bulls would ideally want to see a pause near its immediate support of 12,768.17; however, a dip may result in a further sell-off. Industries Qatar: Short-Term – Pullback IQCD experienced heavy selling pressure yesterday and dipped below the supports of both the 21-day and 55-day moving averages and QR181.40 in a single swoop. We believe the stock may continue its decline and test its support of QR180.0. Any weakness below this level may pull the stock further down and test the QR178.30 level. However, a close above QR181.40 may provide some relief. The RSI and the MACD lines have shown a bearish divergence. Al Rayan Islamic Index: Short-Term – Pullback The QERI Index fell sharply around -1.74% and breached the important supports of 4,301.89, the 21-day moving average and 4,247.34 in a single trading session. We believe this strong breach of supports has bearish implications and the index may continue to drift lower to test the 4,211.0 level. However, if the index manages to move above the 4,247.34 level it may halt its decline. Both the momentum indicators indicate that the index is due for a retracement. Qatar Electricity & Water Co.: Short-Term – Pullback QEWS continued its decline and breached the supports of QR184.0 and the 21-day moving average. Moreover, the stock has been in declining mode since failing to move above the QR190.0 level. We believe the stock may further drift down and test its support of QR182.0, followed by QR180.0. However, a close above QR184.0 may halt its decline. Meanwhile, the RSI is moving further down from the mid-line, while the MACD is growing more bearish. Masraf Al Rayan: Short-Term – Pullback MARK penetrated below the key support of QR49.75 after reversing from the bullish trend on Sunday. We believe with volumes also picking up on the decline the stock may continue to move lower and test the support of the 21-day moving average, followed by QR48.50. However, if the stock manages to move above QR49.75 on a closing basis, it may attract buyers. Meanwhile, both the momentum indicators are providing bearish signals indicating a likely pullback. Milaha: Short-Term – Downmove QNNS breached the support of QR97.0 on Sunday and continued to move lower yesterday, dipping below the 55-day moving average on the back of large volumes. Moreover, the stock has been facing stiff resistance of the descending trendline and is not able to clear it. With both the indicators in downtrend mode, the stock may not cling onto its immediate support of QR95.10 and may further drift down to test QR93.0. However, a close above QR95.33 may halt its downmove.
  • 2. Contacts Saugata Sarkar Keith Whitney Sahbi Kasraoui QNB Financial Services SPC Head of Research Head of Sales Manager - HNWI Contact Center: (+974) 4476 6666 Tel: (+974) 4476 6534 Tel: (+974) 4476 6533 Tel: (+974) 4476 6544 PO Box 24025 saugata.sarkar@qnbfs.com.qa keith.whitney@qnbfs.com.qa sahbi.alkasraoui@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) 12,788.23 DOWN UP 12,768.17 12,678.84 12,800.00 12,939.80 Al Rayan Islamic Index (QERI Index) 4,243.32 DOWN UP 4,211.42 4,148.08 4,247.34 4,301.89 Banks and Financial Services Banks and Masraf Al Rayan (MARK QD)* 49.50 UP UP 48.50 47.00 49.75 51.00 Commercial Bank of Qatar (CBQK QD) 68.10 DOWN UP 67.80 66.30 68.40 69.80 Doha Bank (DHBK QD) 63.80 DOWN UP 63.30 62.00 65.70 66.40 Qatar Islamic Bank (QIBK QD) 92.60 UP UP 90.00 89.00 93.90 96.00 Qatar International Islamic Bank (QIIK QD) 85.30 DOWN UP 83.00 80.70 86.10 87.80 Qatar Insurance (QATI QD) 75.00 DOWN UP 74.80 72.50 76.00 77.00 Al Khalij Commercial Bank (KCBK QD) 23.00 DOWN UP 22.90 22.50 23.23 23.49 Consumer Goods and Services Consumer G Medicare Group (MCGS QD) 85.90 DOWN UP 83.00 81.70 86.25 87.00 Al Meera Consumer Goods Co. (MERS QD) 183.70 DOWN UP 183.00 180.00 185.00 187.80 Industrials Industrials Industries Qatar (IQCD QD)* 181.00 DOWN DOWN 180.00 178.30 181.40 183.00 Qatar Electricity & Water Co. (QEWS QD)* 183.00 DOWN UP 182.00 180.00 184.00 186.00 Gulf International Services (GISS QD) 96.00 UP UP 95.00 93.00 97.00 98.00 Qatari Investors Group (QIGD QD) 66.50 DOWN UP 64.70 61.30 68.40 70.00 Real Estate Real Estate Barwa Real Estate Co. (BRES QD) 38.80 FLAT UP 38.40 37.40 39.20 40.35 United Development Co. (UDCD QD) 25.30 DOWN UP 25.29 24.65 26.00 26.45 Telecom Telecom Ooredoo (ORDS QD) 145.50 DOWN UP 145.00 143.00 148.00 149.00 Vodafone Qatar (VFQS QD) 18.19 UP UP 17.99 17.30 18.49 18.75 Transportation Transportat Nakilat (QGTS QD) 24.02 DOWN UP 23.90 23.40 24.20 24.61 Milaha (QNNS QD)* 95.20 DOWN DOWN 95.10 93.00 97.00 98.30