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27 February Daily technical trader

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  • 1. TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER QE Index: Short-Term – Neutral Al Rayan Islamic Index: Short-Term – Downmove Qatar Insurance: Short-Term – Breakout The QE Index declined for the second consecutive day and fell by around 16 points (-0.14%) to close at 11,839.46. However, the index respected the support near 11,827.0 and managed to recoup majority of its losses. We believe if the index trades above 11,827.0 the uptrend may remain intact and a rise toward 11,900.0 seems possible. However, a retreat below 11,827.0 may trigger selling pressure, which may pull the index to test the 11,754.45 level. The QERI Index continued its decline and moved down around (0.13%) to close the session at 3,373.92. The index witnessed a gapdown opening, but quickly recovered as buyers stepped in and offset the weakness. However, the index needs to climb above 3,382.68 in order to proceed toward the 3,400.0 level. We believe the bears may continue to dominate the bulls till the time the index trades below 3,382.68 and drag it toward the 3,350.0 level. QATI surged 4.33% and surpassed the key resistances of QR65.68 and QR66.90 after two failed attempts, tagging a new 52-week high. Moreover, the stock developed a bullish Marubozu candle pattern indicating the possibility of a further advance. We believe based on the current higher push the stock may continue to advance and tag new 52-week highs. However, a decline below QR66.90 may result in a false breakout. Meanwhile, the RSI has shown a bullish divergence. Qatar International Islamic Bank: Short-Term – Breakout Ooredoo: Short-Term – Breakdown Nakilat: Short-Term – Breakdown QIIK cleared the resistance of QR74.40 after consolidating below this level over the past few days, which is a positive signal. Moreover, the stock developed a bullish engulfing candle pattern which usually indicates a higher move. However, the stock faces its immediate resistance at QR75.30. If the stock manages to move above this level it may spark additional buying interest and push it toward QR76.20. Meanwhile, both the indicators are pointing up. ORDS penetrated below the support of QR151.0 on the back of increased volumes. The stock has been registering lower lows on the charts since encountering resistance at the QR159.0 level. With the RSI moving down, and the MACD crossing the signal line into the negative territory, the stock’s preferred direction seems to be on the downside and may test the 21-day moving average. However, a close above the QR151.0 level may attract buying interest. QGTS dipped below the important support of QR21.83 yesterday. The stock’s performance has been weak on the charts since topping the rally at QR22.48. The recent price action is indicating that traders may witness a sustained decline toward QR21.44, which is also in proximity to the 21-day moving average. Meanwhile, the RSI is looking weak and the MACD is about to converge the signal line in a bearish manner, thus supporting our negative technical outlook. Page 1 of 2
  • 2. Name (Ticker) Last Close Trend Short Term Support Long Term First Resistance Second First Second Qatar Exchange Index (QE Index) 11,839.46 UP UP 11,826.60 11,754.45 11,915.72 12,000.00 Al Rayan Islamic Index (QERI Index) 3,373.92 UP UP 3,350.00 3,329.75 3,382.68 3,400.30 Masraf Al Rayan (MARK QD) 39.15 UP UP 38.00 36.55 40.00 41.00 Commercial Bank of Qatar (CBQK QD) 76.40 UP UP 76.00 75.30 77.00 77.50 Doha Bank (DHBK QD) 66.80 UP UP 66.50 66.00 67.00 68.50 Qatar Islamic Bank (QIBK QD) 76.90 DOWN UP 76.00 75.00 77.00 78.30 Qatar International Islamic Bank (QIIK QD)* 75.00 UP UP 74.40 73.30 75.30 76.20 Qatar Insurance (QATI QD)* 67.50 UP UP 66.90 65.68 68.70 69.50 National Leasing Holding Co. (NLCS QD) 29.85 DOWN DOWN 29.15 28.50 29.95 30.60 Widam Food Co. (WDAM QD) 42.45 DOWN DOWN 41.90 40.45 43.45 44.50 Al Meera Consumer Goods Co. (MERS) 152.00 UP UP 151.00 148.90 153.70 154.90 Industries Qatar (IQCD QD) 197.00 UP UP 195.00 194.00 197.70 199.00 Qatar Electricity & Water Co. (QEWS QD) 194.00 UP UP 192.00 190.00 198.00 200.00 Gulf International Services (GISS QD) 88.00 UP UP 85.80 84.60 90.00 92.00 Qatari Investors Group (QIGD QD) 41.65 DOWN DOWN 41.00 39.50 43.45 44.20 Barwa Real Estate Co. (BRES QD) 32.45 UP UP 32.00 31.60 32.85 33.50 United Development Co. (UDCD QD) 21.90 DOWN DOWN 21.70 21.50 22.00 22.38 Ooredoo (ORDS QD)* 150.50 UP UP 149.00 145.90 151.00 153.50 Vodafone Qatar (VFQS QD) 12.20 UP UP 12.09 11.89 12.40 12.66 Nakilat (QGTS QD)* 21.72 UP UP 21.44 21.25 21.83 22.00 Milaha (QNNS QD) 96.00 UP UP 95.10 93.00 96.50 98.00 Banks and Financial Services Banks and Consumer Goods and Services Consumer G Industrials Real Estate Telecom Transportat *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 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. Contacts Saugata Sarkar Ahmed M. Shehada Keith Whitney Sahbi Kasraoui QNB Financial Services SPC Head of Research Tel: (+974) 4476 6534 saugata.sarkar@qnbfs.com.qa Head of Trading Tel: (+974) 4476 6535 ahmed.shehada@qnbfs.com.qa Head of Sales Tel: (+974) 4476 6533 keith.whitney@qnbfs.com.qa Manager - HNWI Tel: (+974) 4476 6544 sahbi.alkasraoui@qnbfs.com.qa Contact Center: (+974) 4476 6666 PO Box 24025 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