23 June Daily technical trader Presentation Transcript
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TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER
QE Index: Short-Term – Neutral
The QE Index remained almost flat on Sunday, as it continued to
hold onto its support level of 12,450. The index gained by a marginal
0.05% to close at 12,460.15. Although the MACD continues to trend
lower, the RSI seems to be forming a bottom near the oversold zone,
indicating that the index may witness a rebound soon. On the upside,
a move above 12,513 can take the index to 12,600. However,
investors should be cautious if the index moves below 12,450.
Nakilat: Short-Term – Downtrend
QGTS after testing its support level of QR23.0 for several days, has
finally fallen below it to close at QR22.85. The MACD and the RSI
have been trending lower, indicating continued weakness in the stock.
If QGTS continues to slip, it has first support at QR22.45, while the
next support is seen at QR22.0. However, a move above its 55-day
moving average (currently at QR23.48) would indicate a reversal of
the short-term downtrend.
Qatar Al Rayan Islamic Index: Short-Term – Neutral
The QERI index fell 20.87 points (-0.5%) to close at 4,149.85 on
Sunday, just above its support level of 4,148. Below this level, the
index can slip to 4,100. Both the RSI and the MACD continue to trend
lower, suggesting that the index remains weak. However, after a
sharp slide over the last three weeks, we cannot rule out a temporary
bounce-back. If the index recovers from here, the first strong
resistance is seen at the 55-day moving average (at 4,256.0).
Gulf International Service: Short-Term – Upmove
GISS has been gaining for four consecutive days now and closed at
its resistance level of QR95.0. The stock is above the 21-day and the
55-day moving averages, which is a positive sign. The MACD has
provided a positive crossover, while the RSI is also trending higher.
The stock is likely to move toward its next resistance level of QR98.0.
Above this, GISS can head toward its May intra-day high of
QR101.70. A close below QR95.0 would indicate a downtrend.
Al Khalij Commercial Bank: Short-Term – Downtrend
KCBK continued to trend lower for the sixth consecutive session. The
stock fell 0.42% to close at its intra-day low of QR21.51, which
suggests further weakness in the stock. The MACD is diverging on
the negative side, while the RSI has dipped into the oversold zone.
KCBK continues to look weak with first support at QR21.0, and the
second at QR20.17. The 21-day moving average has also crossed
below the 55-day line, indicating that the stock is in downtrend mode.
Barwa Real Estate Co.: Short-Term – Upmove
BRES has been trading in a narrow range over the last four trading
sessions, between its support of QR38.4 and its 55-day moving
average (currently at QR39.23). The RSI has begun to trend higher,
indicating that the stock is gathering strength. A move above the
QR39.23 level can take the stock to its 21-day moving average
(currently at QR41.10). However, investors should turn cautious if the
stock slips below the QR38.40 level on a closing basis.
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
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*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
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.
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) 12,460.15 DOWN DOWN 12,450.00 12.250 12,513.65 12,600.0
Al Rayan Islamic Index (QERI Index) 4,149.85 DOWN DOWN 4,148.08 4,100.00 4,231.77 4,256.0
Banks and Financial Services Banks and
Masraf Al Rayan (MARK QD) 50.50 DOWN UP 49.75 48.50 52.30 55.00
Commercial Bank of Qatar (CBQK QD) 65.60 DOWN DOWN 64.15 63.60 65.75 66.30
Doha Bank (DHBK QD) 59.30 FLAT DOWN 57.40 56.50 61.0 62.50
Qatar Islamic Bank (QIBK QD) 90.00 DOWN UP 90.00 86.90 93.90 96.00
Qatar International Islamic Bank (QIIK QD) 78.70 DOWN DOWN 78.30 75.50 80.70 83.00
Qatar Insurance (QATI QD) 80.00 DOWN UP 76.00 74.10 81.40 85.00
Al Khalij Commercial Bank (KCBK QD)* 21.51 DOWN DOWN 21.00 20.17 22.01 22.50
Medicare Group (MCGS QD) 83.70 DOWN DOWN 83.00 81.70 85.00 87.80
Al Meera Consumer Goods Co. (MERS QD) 168.70 DOWN DOWN 164.00 159.00 171.00 175.00
Industries Qatar (IQCD QD) 177.90 DOWN DOWN 175.50 172.60 180.00 181.40
Qatar Electricity & Water Co. (QEWS QD) 182.00 FLAT DOWN 182.00 180.00 188.00 192.0
Gulf International Services (GISS QD)* 95.00 FLAT FLAT 90.00 86.60 95.00 98.00
Qatari Investors Group (QIGD QD) 60.50 DOWN DOWN 59.70 57.80 61.30 62.40
Barwa Real Estate Co. (BRES QD)* 39.00 DOWN UP 38.40 37.40 39.20 39.70
United Development Co. (UDCD QD) 24.70 DOWN DOWN 24.50 24.00 25.30 25.65
Ooredoo (ORDS QD) 132.50 DOWN DOWN 130.0 125.10 137.50 139.00
Vodafone Qatar (VFQS QD) 19.30 DOWN UP 19.29 18.75 20.00 20.79
Nakilat (QGTS QD)* 22.85 DOWN DOWN 22.45 22.00 23.40 23.90
Milaha (QNNS QD) 92.00 DOWN DOWN 90.00 88.70 93.00 94.30