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25 March 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 – Downmove The QE Index fell for the fourth straight session and shed around 82 points (-0.72%) to close at 11,258.51. Moreover, the index continued its decline and penetrated below the important supports of the 55-day moving average and the 11,300.0 psychological level in a single swoop. Meanwhile, with the RSI and the MACD lines pointing lower, we believe the index may continue to witness further selling pressure and drift lower to test the 11,200.0 psychological level. Qatar Electricity & Water Co.: Short-Term – Downmove QEWS has been facing uncertainty in clearing the 21-day moving average and the descending trendline over the past few days. The RSI is drifting lower and has a lot of room before getting oversold, while the MACD line is growing more bearish supporting a further downside. We believe the stock may continue to move lower and test its immediate support of QR168.0, which is also in proximity to the 55- day moving average, followed by the QR165.36 level. Al Rayan Islamic Index: Short-Term – Downmove The QERI Index failed to make any further headway above the 3,481.42 level and caved under selling pressure, breaching the support of the 3,458.51 level. We believe the bears may continue to dominate the bulls until the index trades below the 3,458.51 level and drag it lower to test 3,432.26. However, if the index manages to move above 3,458.51 on a closing basis it may attract buyers. The RSI is retreating from the overbought territory indicating a likely correction. Gulf International Services: Short-Term – Downmove GISS has been steadily declining over the past few days and is moving along the descending trendline. We believe until the stock trades below this descending trendline the upmove seems to be in jeopardy. GISS may continue its bearish move and may pull back toward QR75.20. Meanwhile, the RSI is moving down toward the mid- line in a bearish manner, while the MACD has crossed the signal line into the negative territory indicating the weakness to continue. Industries Qatar: Short-Term – Downmove IQCD breached the support of QR178.30 on Sunday and continued to move lower yesterday. Notably, volumes were also large on the decline which is a negative sign. The stock is currently sitting right at its support of QR175.0. Any dip below this level may result in further selling pressure, which may pull the stock to test QR173.0. However, if the stock manages to cling onto QR175.0 it may advance. Meanwhile, both the indicators are providing bearish signals. United Development Co.: Short-Term – Downmove UDCD breached the supports of QR21.70 and QR21.50 in a single swoop on the back of large volumes and has been in declining mode over the past few days. Moreover, the stock developed a bearish Marubozu candle pattern indicating the continuation of this downmove. UDCD may now drift down toward QR21.0 which is an important level to watch out for traders. A close above QR21.50 may halt its downmove. Both the indicators are pointing down.
  • 2. Contacts Saugata Sarkar Keith Whitney Sahbi Kasraoui QNB Financial Services SPC Head of Research Head of Sales Manager - HNWI Contact Center: (+974) 4476 6666 Tel: (+974) 4476 6534 Tel: (+974) 4476 6533 Tel: (+974) 4476 6544 PO Box 24025 saugata.sarkar@qnbfs.com.qa keith.whitney@qnbfs.com.qa sahbi.alkasraoui@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) 11,258.51 DOWN DOWN 11,200.00 11,171.25 11,300.00 11,338.41 Al Rayan Islamic Index (QERI Index) 3,452.86 UP UP 3,432.26 3,400.00 3,458.51 3,490.49 Banks and Financial Services Banks and Masraf Al Rayan (MARK QD) 38.50 FLAT UP 38.00 36.55 39.10 40.00 Commercial Bank of Qatar (CBQK QD) 60.60 DOWN DOWN 59.33 58.75 60.92 61.67 Doha Bank (DHBK QD) 58.50 DOWN DOWN 57.40 56.20 60.00 62.00 Qatar Islamic Bank (QIBK QD) 72.70 DOWN DOWN 71.80 70.50 74.10 75.00 Qatar International Islamic Bank (QIIK QD) 71.90 DOWN UP 70.30 69.40 72.80 74.40 Qatar Insurance (QATI QD) 64.50 DOWN UP 64.00 62.64 65.68 66.90 National Leasing Holding Co. (NLCS QD) 28.20 DOWN DOWN 28.00 27.52 29.15 29.95 Consumer Goods and Services Consumer G Widam Food Co. (WDAM QD) 45.00 UP DOWN 44.50 43.20 47.80 48.75 Al Meera Consumer Goods Co. (MERS) 161.00 UP UP 159.00 154.90 164.00 165.00 Industrials Industries Qatar (IQCD QD)* 175.00 DOWN DOWN 175.00 173.00 180.00 181.40 Qatar Electricity & Water Co. (QEWS QD)* 169.00 DOWN UP 168.00 165.36 170.91 174.36 Gulf International Services (GISS QD)* 76.40 UP UP 75.20 73.20 78.80 80.00 Qatari Investors Group (QIGD QD) 54.50 UP DOWN 54.00 52.40 56.20 58.00 Real Estate Barwa Real Estate Co. (BRES QD) 34.20 UP UP 34.20 33.50 34.80 36.30 United Development Co. (UDCD QD)* 21.40 DOWN DOWN 21.00 20.50 21.70 22.00 Telecom Ooredoo (ORDS QD) 139.50 DOWN DOWN 138.50 136.00 141.00 143.50 Vodafone Qatar (VFQS QD) 11.97 DOWN UP 11.90 11.60 12.09 12.25 Transportat Nakilat (QGTS QD) 19.15 DOWN DOWN 18.96 18.50 19.28 19.50 Milaha (QNNS QD) 93.00 DOWN UP 93.00 91.30 95.10 96.50