23 January Daily technical trader Presentation Transcript
TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER
QE Index: Short-Term – Upmove
Al Rayan Islamic Index: Short-Term – Upmove
Al Meera Consumer Goods Co.: Short-Term – Upswing
The QE Index after reclaiming the 11,100.0 level on Tuesday
extended its gains and rose around 32 points (0.29%), tagging a new
52-week high. The index momentarily penetrated below the 11,100.0
level, but recovered and witnessed a strong rally as bulls
overpowered the bears. We believe the index is trending strong and
may continue its bullish momentum targeting the 11,200.0-11,250.0
levels. Both indicators look strong for a further upmove.
The QERI Index remained in bullish mode and moved higher around
0.63% to close the session at 3,234.28. Moreover, the index
managed to sustain above the 3,199.21 level and rallied as buyers
pushed prices closer to its all-time high of 3,240.37. The index needs
to clear this level on a closing basis in order to witness a further rally.
However, if the index fails to move above 3,240.37, it may
consolidate. Meanwhile, the RSI line is providing a bullish signal.
MERS witnessed a gap-down opening, but later managed to reclaim
QR142.70 and continued its upmove. We believe the stock may
maintain its higher move and continue to scale higher targeting
QR145.90 until it holds onto the QR142.70 level. Meanwhile, the RSI
is moving strongly in the overbought territory, while the MACD is
diverging away from the signal line in a bullish manner. However, a
dip below QR142.70 may result in bearish implications.
Ooredoo: Short-Term – Upswing
Qatari Investors Group: Short-Term – Breakout
Vodafone Qatar: Short-Term – Upmove
ORDS cleared the QR148.0 level and continued its upmove, tagging
a 52-week high. Moreover, the stock has been in uptrend mode and
gaining strength since clearing both moving averages. We believe
ORDS is trending strong and may continue to advance, tagging new
52-week highs. Moreover, the stock has support for a further higher
move from the RSI and the MACD lines, which are moving up in a
bullish manner indicating that this rally may not fizzle out soon.
QIGD breached the resistances of QR47.70 and the descending
trendline in a single swoop, which had restricted its bullish move in the
past. The stock surged 7.63% after developing a hammer candle
pattern on Tuesday, thus confirming this trend reversal pattern. With
volumes also picking up, we believe QIGD may be ready for a move
above the 21-day moving average, targeting QR52.40 as it has little
resistance until then. Meanwhile, the RSI is moving up.
VFQS continued to move higher yesterday after surpassing the
resistance of QR11.44 on Tuesday, thus confirming strength in the
upmove. The stock is currently at the threshold of its immediate
resistance of QR11.60. If the stock manages to penetrate above this
key level, it may spark a short-term rally, which may push the stock to
test QR12.09. However, any failure may pull it toward QR11.44.
Meanwhile, the RSI and the MACD lines are providing bullish signals.
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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
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Manager - HNWI
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