21 January Daily technical trader


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21 January Daily technical trader

  1. 1. TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER QE Index: Short-Term – Neutral Al Rayan Islamic Index: Short-Term – Neutral Qatar Electricity & Water Co.: Short-Term – Downmove The QE Index failed to reclaim the 11,100.0 level and declined around 21 points (-0.19%) for the second consecutive day to close at 11,072.13. The index is currently trading close to its intermediate support near 11,060.0. If the index dips below this level, more selling is likely to happen, pulling it further toward the 11,000.0 psychological level. On the flip side, if the index manages to hold onto 11,060.0, it could set a stage to advance toward the 11,100.0 level. The QERI Index penetrated below its support of the 3,199.21 level to close the session at 3,198.72. The index experienced selling pressure throughout the day as bears dominated the bulls. We believe if the weakness continues the index is likely to drift down further and test its intermediate support at 3,185.46. Conversely, the index needs to move above 3,199.21 on a closing basis in order to keep its upward momentum intact. Meanwhile, the RSI line is moving down. QEWS dipped below the supports of QR180.0 and its 21-day moving average (currently at QR179.23) in a single swoop for the first time since December. Moreover, the stock developed a bearish Marubozu candle pattern, indicating a likely correction from the current level. We believe the stock is underperforming since topping the rally at QR184.10 and may head lower to test QR178.0. Meanwhile, both momentum indicators are on a downtrend mode. Industries Qatar: Short-Term – Downmove Qatari Investors Group: Short-Term – Downmove Qatar Islamic Bank: Short-Term – Breakout IQCD declined below the support of QR178.30 on the back of large volumes, which is a negative sign. Moreover, the stock struggled to stay above the long-term ascending trendline and declined further yesterday. We believe IQCD seems to be approaching QR176.0. Any sustained weakness below this level may indicate a move toward QR174.60. Meanwhile, both the RSI and MACD lines are providing bearish signals, indicating a lower move. QIGD failed to move above the resistance of QR47.70 and caved in to selling pressure. Moreover, the stock has been experiencing sustained selling pressure over the past few days and is moving along a descending trendline. We believe the stock is trending weak and may continue to decline further and test QR44.20 as it has little support until then. In addition, with both momentum indicators pointing lower, the preferred direction for QIGD seems to be on the downside. QIBK finally breached the long-term resistance of QR74.0 after few failed attempts in the past few days. Notably, the breakout happened on the back of large volumes, indicating a rising buying interest. Moreover, the stock developed a bullish Marubozu candle pattern, indicating a possibility of a higher move. The stock is currently sitting right at its immediate resistance of QR75.0. We believe the stock may be ready for a move above this level targeting the QR77.0 level. Page 1 of 2
  2. 2. Name (Ticker) Last Close Trend Short Term Support Long Term First Resistance Second First Second Qatar Exchange Index (QE Index) 11,072.13 UP UP 11,060.00 11,000.00 11,170.00 11,250.00 Al Rayan Islamic Index (QERI Index) 3,198.72 UP UP 3,185.46 3,151.22 3,240.37 3,300.00 Masraf Al Rayan (MARK QD) 35.00 UP UP 35.00 34.15 36.00 37.25 Commercial Bank of Qatar (CBQK QD) 74.90 UP UP 74.50 73.30 75.30 76.00 Doha Bank (DHBK QD) 65.40 UP UP 64.50 63.90 66.00 66.75 Qatar Islamic Bank (QIBK QD)* 75.00 UP UP 74.00 73.00 75.00 75.70 Qatar International Islamic Bank (QIIK QD) 69.20 UP UP 68.00 66.20 69.40 71.20 Qatar Insurance (QATI QD) 76.00 UP UP 75.50 74.30 76.90 78.50 National Leasing Holding Co. (NLCS QD) 30.10 DOWN DOWN 29.95 29.15 30.25 30.60 Widam Food Co. (WDAM QD) 52.80 FLAT UP 51.90 51.00 53.00 54.00 Al Meera Consumer Goods Co. (MERS) 142.50 UP UP 140.50 139.50 142.70 144.00 Industries Qatar (IQCD QD)* 176.90 UP UP 176.00 174.60 178.30 180.00 Qatar Electricity & Water Co. (QEWS QD)* 179.10 DOWN UP 178.00 177.20 180.00 181.60 Gulf International Services (GISS QD) 70.50 UP UP 70.00 69.00 72.00 73.15 Qatari Investors Group (QIGD QD)* 45.50 DOWN UP 44.20 43.45 46.00 47.70 Barwa Real Estate Co. (BRES QD) 31.45 UP UP 31.20 30.85 32.10 32.60 United Development Co. (UDCD QD) 23.18 UP UP 23.15 22.85 23.50 23.94 Ooredoo (ORDS QD) 143.50 UP UP 143.00 141.50 145.00 145.90 Vodafone Qatar (VFQS QD) 11.33 UP UP 11.19 11.00 11.44 11.60 Nakilat (QGTS QD) 21.09 UP UP 21.07 20.60 21.32 21.44 Milaha (QNNS QD) 90.00 UP UP 90.00 89.40 91.30 93.00 Banks and Financial Services Banks and Consumer Goods and Services Consumer G Industrials Industrials Real Estate Real Estate Telecom Telecom Transportation Transportat *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 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. Contacts Saugata Sarkar Ahmed M. Shehada Keith Whitney Sahbi Kasraoui QNB Financial Services SPC Head of Research Tel: (+974) 4476 6534 saugata.sarkar@qnbfs.com.qa Head of Trading Tel: (+974) 4476 6535 ahmed.shehada@qnbfs.com.qa Head of Sales Tel: (+974) 4476 6533 keith.whitney@qnbfs.com.qa Manager - HNWI Tel: (+974) 4476 6544 sahbi.alkasraoui@qnbfs.com.qa Contact Center: (+974) 4476 6666 PO Box 24025 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