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QE Index: Short-Term – Downmove

Al Rayan Islamic Index: Short-Ter...
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28 January Daily technical trader


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  1. 1. TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER QE Index: Short-Term – Downmove Al Rayan Islamic Index: Short-Term – Downmove Commercial Bank of Qatar: Short-Term – Downmove The QE Index fell around 53 points (-0.47%) for the second consecutive day to close at 11,245.86. The index tagged a new 52week high of 11,348.45, but later declined as there was exhaustion on the part of buyers. This action reveals that the index may consolidate or decline before its next upmove. Traders may watch out for support of the ascending trendline. Any dip below this trendline may trigger a sell-off, which may pull the index further down. The QERI Index declined around (-0.53%) to close the session at 3,218.62. The index momentarily moved above the 3,240.37 level, but did not managed to cling onto it and drifted down as buyers backed away from higher prices. Moreover, the RSI has given a bearish divergence which often signals that the recent upmove may be running out of steam. We believe the index may move further down and test its immediate support near the 3,200.0 level. CBQK dipped below the support of QR72.80 yesterday. Moreover, the stock has been witnessing selling pressure over the past few days since topping the rally near QR75.90. We believe the stock is trending weak and may continue to move down further and test QR71.80. However, a close above QR72.80 may halt its downmove. Meanwhile, the RSI is moving further down from the mid-line, while the MACD is turning more bearish. Qatar International Islamic Bank: Short-Term – Downmove Widam Food Co.: Short-Term – Downmove Barwa Real Estate Co.: Short-Term – Downmove QIIK penetrated below the QR70.30 level on Sunday and further declined below the support of the QR69.40 level, indicating a likely continuation of this downmove. We believe the stock may head lower and test QR68.0. Moreover, the RSI is drifting down toward the midline, while the MACD is turning more bearish indicating weakness. However, if the stock manages to climb above the QR69.40 level on a closing basis it may attract buying interest. WDAM breached the supports of the 21-day moving average and the descending trendline in a single swoop. Moreover, the stock developed a bearish Marubozu candle pattern indicating a likely correction from the current level. We believe although the stock is trading close to its immediate support of QR51.90, it may not hold onto it and decline further to test the 55-day moving average. The RSI and the MACD lines are providing bearish signals. BRES moved below the support of QR31.60 on the back of increased volumes. Moreover, the stock has been moving along the descending trendline over the past few days, which had restricted its bullish move. We believe as long as the stock trades below the descending trendline the upward movement seems to be in jeopardy and may continue to drift lower and test QR31.20. Any dip below this level may pull the stock further down and test the QR30.85 level. Page 1 of 2
  2. 2. Name (Ticker) Last Close Trend Short Term Support Long Term First Resistance Second First Second Qatar Exchange Index (QE Index) 11,245.86 UP UP 11,170.00 11,100.00 11,300.00 11,350.00 Al Rayan Islamic Index (QERI Index) 3,218.62 UP UP 3,199.21 3,185.46 3,240.37 3,270.00 Masraf Al Rayan (MARK QD) 34.45 UP UP 34.15 33.50 35.00 36.00 Commercial Bank of Qatar (CBQK QD)* 72.40 DOWN UP 71.80 70.90 72.80 73.30 Doha Bank (DHBK QD) 64.40 UP UP 63.90 63.00 64.80 66.00 Qatar Islamic Bank (QIBK QD) 75.30 UP UP 75.00 74.00 77.00 77.50 Qatar International Islamic Bank (QIIK QD)* 69.00 UP UP 68.00 67.00 69.40 70.30 Qatar Insurance (QATI QD) 75.60 UP UP 75.00 74.30 76.20 76.90 National Leasing Holding Co. (NLCS QD) 30.00 DOWN DOWN 29.95 29.15 30.60 31.00 Widam Food Co. (WDAM QD)* 52.00 DOWN UP 51.90 51.00 53.00 54.00 Al Meera Consumer Goods Co. (MERS) 143.00 UP UP 142.70 140.50 144.00 145.90 Industries Qatar (IQCD QD) 180.90 UP UP 180.00 178.30 181.50 183.00 Qatar Electricity & Water Co. (QEWS QD) 181.90 FLAT UP 180.00 178.90 182.50 184.00 Gulf International Services (GISS QD) 77.90 UP UP 77.00 76.00 79.00 80.00 Qatari Investors Group (QIGD QD) 48.05 DOWN UP 47.70 46.00 49.09 52.40 Barwa Real Estate Co. (BRES QD)* 31.40 UP UP 31.20 30.85 31.60 32.00 United Development Co. (UDCD QD) 23.13 FLAT FLAT 23.00 22.85 23.15 23.50 Ooredoo (ORDS QD) 156.00 UP UP 155.10 154.00 156.00 158.90 Vodafone Qatar (VFQS QD) 11.28 UP UP 11.19 11.00 11.44 11.60 Nakilat (QGTS QD) 20.93 UP UP 20.74 20.50 21.07 21.32 Milaha (QNNS QD) 88.90 UP UP 88.00 87.20 89.40 90.00 Banks and Financial Services Banks and Consumer Goods and Services Consumer G Industrials Industrials Real Estate Real Estate Telecom Telecom Transportation 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 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 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
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