25 June 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 – Down As expected, the QE Index broke its support level of 12,400 and continued its downtrend. The index fell below the 12,300 level during the day, making a low of 12,269.7, but recovered to close at 12,323.45, which is down 0.91%. With both the technical indicators suggesting a continuation of the bearish trend, the index may test its next support of 12,215. Once this level is broken, the next support is seen at 12,100. Industries Qatar: Short-Term – Downmove IQCD broke its pattern of higher highs and higher lows to fall 2.51% on Tuesday and close at QR174.50. The stock is likely to move toward its support level of QR170. If this level is broken, IQCD could move to QR165.0. The RSI is moving down and is close to the oversold zone, while the MACD has begun to diverge from the signal line in the downside. However, a close above the 21-day moving average (at QR182.5), would suggest a continuation of the uptrend. QE Al Rayan Islamic Index: Short-Term – Down The QERI index slipped 0.91% to close at 4,099.68, marginally below its support level of 4,100. If the index remains below this level, it is likely to move toward the 4,000 level. The index closed near the lowest point of the day, indicating the likelihood of further decline from the current level. The MACD and the RSI are also trending lower, confirming the bearish view. On the upside, the 4,148 level will now act as a resistance for the index. United Development Co.: Short-Term – Downmove After testing its resistance level of QR24.75 for the past few days, UDCD fell back and slipped 2.11% to close at QR24.14. If the stock breaks its next support of QR24.0, it could fall toward the next support level seen at QR23.42. Both the RSI and the MACD support this bearish view. However, investors should exercise caution if the stock moves back above its resistance of QR24.75. Doha Bank: Short-Term – Break down DHBK witnessed heavy selling pressure on Tuesday, falling 2.41% on high volumes. As a result, the stock broke two support levels of QR57.90 and 56.90 in a single trading session. The stock continues to look weak with both the technical indicators trending lower. DHBK is likely to test its support level of QR56.10, below which the stock can move toward 55.0. However, investors should exercise caution if the stock moves back to cross the QR58.0 level. Qatar Insurance: Short-Term – Upmove QATI has been moving higher over the last few days. The stock moved up 0.63% on Tuesday on the back of strong volumes, which is a positive signal. The MACD has signaled a positive crossover, supporting our positive view. On the upside, the stock has resistance at QR84.40. The stock has received strong support from its 55-day moving average (currently at QR76.97). Investors should turn cautious if QATI moves below this level.
  • 2. Contacts 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 Tel: (+974) 4476 6534 Tel: (+974) 4476 6569 Tel: (+974) 4476 6509 Tel: (+974) 4476 6544 Tel: (+974) 4476 6548 PO Box 24025 saugata.sarkar@qnbfs.com.qa abdullah.amin@qnbfs.com.qa shahan.keushgerian@qnbfs.com.qa sahbi.alkasraoui@qnbfs.com.qa ahmed.alkhoudary@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) 12,323.45 DOWN DOWN 12,250.00 12,100.00 12,513.65 12,600.0 Al Rayan Islamic Index (QERI Index) 4,099.68 DOWN DOWN 3,974.62 3,873.14 4,231.77 4,256.0 Banks and Financial Services Banks and Masraf Al Rayan (MARK QD) 50.40 DOWN UP 48.50 47.40 51.80 52.30 Commercial Bank of Qatar (CBQK QD) 65.70 FLAT DOWN 64.15 63.60 66.30 67.20 Doha Bank (DHBK QD)* 56.60 DOWN DOWN 56.10 55.00 56.90 57.90 Qatar Islamic Bank (QIBK QD) 90.00 DOWN UP 90.00 86.90 93.90 96.00 Qatar International Islamic Bank (QIIK QD) 78.50 DOWN DOWN 78.30 75.50 80.70 83.00 Qatar Insurance (QATI QD)* 80.00 FLAT UP 76.00 74.10 81.40 84.40 Al Khalij Commercial Bank (KCBK QD) 21.00 DOWN DOWN 21.00 20.17 22.01 22.50 Consumer G Medicare Group (MCGS QD) 79.60 DOWN DOWN 79.00 78.10 85.00 87.80 Al Meera Consumer Goods Co. (MERS QD) 168.60 DOWN DOWN 164.00 159.00 171.00 175.00 Industrials Industries Qatar (IQCD QD)* 174.50 DOWN DOWN 170.00 165.00 180.00 182.50 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 98.00 101.70 Qatari Investors Group (QIGD QD) 58.30 DOWN DOWN 57.70 57.00 61.30 62.40 Real Estate Barwa Real Estate Co. (BRES QD) 38.85 DOWN UP 38.40 37.40 39.20 39.70 United Development Co. (UDCD QD)* 24.14 DOWN DOWN 24.00 23.42 24.75 25.30 Telecom Ooredoo (ORDS QD) 134.50 DOWN DOWN 130.0 125.10 137.50 139.00 Vodafone Qatar (VFQS QD) 19.55 DOWN UP 19.29 18.75 20.00 20.79 Transportat Nakilat (QGTS QD) 22.60 DOWN DOWN 22.45 22.00 23.40 23.90 Milaha (QNNS QD) 91.60 DOWN DOWN 90.00 88.70 93.00 94.30