TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER
QE Index: Short-Term – Upmove
Al Rayan Islamic Index: Short-Term – Upmove
Industries Qatar: Short-Term – Upmove
The QE Index continued its upward momentum and rose around 13
points (0.11%) to close at 11,885.78. Moreover, the index rebounded
from its day’s low of 11,820.64 as buying interest pushed it closer to
the 11,900.0 level. However, the index faces its immediate resistance
near the 11,900.0-11,915.72 levels, which it needs to clear in order to
gain further momentum. Any failure to move above this level may
result in consolidation.
The QERI Index extended its strong rally and moved higher around
0.22%, tagging another new all-time high. Moreover, the index
respected the support of 3,382.68 as well as the ascending trendline
and continued its upmove, as buyers stepped in & quickly offset the
weakness. We believe the index has been in uptrend mode and may
continue to advance tagging new highs. However, traders may need
to keep a close watch on the 3,382.68 level for any reversal signs.
IQCD moved higher around 1.60% and tagged a new 52-week high
on the back of increased volumes. The stock has been trading
sideways over the past few days, but eventually managed to move
above the QR195.0 level which is a positive signal. We believe the
stock may continue its upmove and tag new 52-week highs until its
trades above QR195.0. Meanwhile, both the momentum indicators
are providing bullish signals indicating the possibility of a further rally.
Qatar Electricity & Water Co.: Short-Term – Upswing
Al Meera Consumer Goods Co.: Short-Term – Downmove
Ooredoo: Short-Term – Breakout
QEWS witnessed a gap-up opening and surpassed the QR194.30
level, tagging a new all-time high. We believe based on the current
higher push the stock may continue to proceed ahead and tag new
highs. Meanwhile, the RSI is trending strongly in the overbought
territory, while the MACD is diverging away from the signal line in a
bullish manner and are showing no imminent trend reversal signs.
However, a dip below the QR194.30 level may halt its upmove.
MERS continued its downmove yesterday after penetrating below its
support of QR154.90 on Thursday. Moreover, the stock has been
witnessing a steady decline since topping the rally near QR159.0. We
believe although the stock is trading close to its immediate support of
QR151.0, it seems unlikely that MERS may hold onto it and drift down
further to test its 21-day moving average. Meanwhile, the RSI and the
MACD lines are pointing down indicating weakness to continue.
ORDS cleared the QR153.0 level after consolidating below it over the
past few days. The stock has been in uptrend mode since clearing the
21-day moving average and is gradually gaining strength. We believe
if the stock can cling onto QR153.0 a continued rise and a chance of
a further upmove toward QR157.0 cannot be ruled out. However, a
dip below QR153.0 on a closing basis may indicate a false breakout.
Meanwhile, both the indicators are pointing higher.
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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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