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28 August 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 – Neutral The QE Index ended the session in red with a cut of -0.25% after recording a fresh all-time high of 13,993.34, as traders opted to book profits. The index has been consistently tagging new highs over the past few days and is in uptrend mode. Meanwhile, the index has its strong support near the 13,850.0 level. We believe the index could proceed ahead as long as it stays above 13,850.0. On the flip side, any retreat below 13,850.0 may drag the index to test 13,800.0. Industries Qatar: Short-Term – Upmove IQCD continued its strong rally and advanced 1.55%, clearing its important resistance of QR194.60 for the first time since February. The stock has been in a rising mode since clearing the 55-day moving average and is registering strong gains over the past few days. We believe the stock may continue its bullish momentum targeting QR197.70. However, a retreat below QR194.60 may result in a retracement. Meanwhile, both the indicators are pointing higher. Al Rayan Islamic Index: Short-Term – Neutral The QERI Index tagged a fresh all-time high, but later reversed to surrender all its gains and settle below the 4,800.0 mark. The index declined for the second consecutive session, as traders continued to book profits. However, the uptrend in the index remains intact. The index has its immediate support near 4,770.0. We believe the bulls may continue to dominate as long as the index stays above 4,770.0. Conversely, any decline below 4,770.0 may result in a pullback. Barwa Real Estate Co.: Short-Term – Pullback BRES extended its losses and breached its important support of QR41.0. Further, the stock has been in a declining mode and is moving along the descending trendline over the past few days. We believe BRES may continue to drift down and penetrate both its moving averages to test QR40.10. However, a close above QR41.0 may provide some relief. Meanwhile, the RSI has shown a negative slope, while the MACD has crossed into the negative territory. Commercial Bank of Qatar: Short-Term – Bounce Back CBQK built on its gains and advanced further to clear its important resistance of the ascending pennant. Meanwhile the stock is currently on the threshold of its immediate resistance of QR69.50. Any move above this level may trigger fresh buying and push the stock further to test QR70.0. However, any failure to clear QR69.50 may result in a sideways movement. Meanwhile, both the momentum indicators are providing bullish signals, indicating a likely higher move. Nakilat: Short-Term – Pullback QGTS continued to drift lower yesterday after breaching its 21-day moving average on Tuesday. Further, the stock penetrated below its important support of QR24.12 on the back of increased participation, which is a negative sign. We believe the stock is looking weak on charts and may continue its decline to test QR23.90. However, if the stock manages to climb above QR24.12, it may halt its pullback. Meanwhile, both the indicators are indicating weakness.
  • 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) 13,871.21 UP UP 13,847.11 13,800.00 13,900.00 13,993.34 Al Rayan Islamic Index (QERI Index) 4,787.14 UP UP 4,770.31 4,750.00 4,800.00 4,849.82 Banks and Financial Services Banks and Masraf Al Rayan (MARK QD) 56.40 UP UP 55.80 54.00 57.30 59.90 Commercial Bank of Qatar (CBQK QD)* 69.40 UP UP 69.00 68.30 69.50 70.00 Doha Bank (DHBK QD) 61.90 UP UP 61.00 60.00 62.00 63.10 Qatar Islamic Bank (QIBK QD) 124.50 UP UP 123.80 121.50 126.00 128.00 Qatar International Islamic Bank (QIIK QD) 89.10 UP UP 89.00 87.80 90.50 92.00 Qatar Insurance (QATI QD) 98.00 UP UP 97.00 96.00 99.00 100.00 Al Khalij Commercial Bank (KCBK QD) 22.24 FLAT UP 22.00 21.80 22.35 22.50 Consumer Goods and Services Consumer G Medicare Group (MCGS QD) 133.70 UP UP 130.00 128.80 135.20 139.40 Al Meera Consumer Goods Co. (MERS QD) 190.00 FLAT UP 187.80 185.00 190.00 191.50 Industrials Industrials Industries Qatar (IQCD QD)* 196.00 UP UP 194.60 192.10 197.70 200.00 Qatar Electricity & Water Co. (QEWS QD) 185.00 DOWN FLAT 184.00 182.00 186.00 188.00 Gulf International Services (GISS QD) 119.50 UP UP 118.10 115.00 121.00 122.50 Qatari Investors Group (QIGD QD) 60.50 UP UP 59.70 57.70 60.60 61.30 Real Estate Real Estate Barwa Real Estate Co. (BRES QD)* 40.80 FLAT FLAT 40.10 39.70 41.00 41.80 United Development Co. (UDCD QD) 29.40 DOWN UP 29.05 28.55 29.85 30.00 Telecom Telecom Ooredoo (ORDS QD) 127.00 FLAT DOWN 126.00 124.90 129.70 131.00 Vodafone Qatar (VFQS QD) 21.48 UP UP 21.40 21.00 21.99 22.30 Transportation Transportat Nakilat (QGTS QD)* 24.10 DOWN UP 23.90 23.70 24.12 24.45 Milaha (QNNS QD) 93.50 UP UP 93.00 91.30 95.10 96.50