28 January Daily technical trader Presentation Transcript
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.
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Qatar Exchange Index (QE Index)
Al Rayan Islamic Index (QERI Index)
Masraf Al Rayan (MARK QD)
Commercial Bank of Qatar (CBQK QD)*
Doha Bank (DHBK QD)
Qatar Islamic Bank (QIBK QD)
Qatar International Islamic Bank (QIIK QD)*
Qatar Insurance (QATI QD)
National Leasing Holding Co. (NLCS QD)
Widam Food Co. (WDAM QD)*
Al Meera Consumer Goods Co. (MERS)
Industries Qatar (IQCD QD)
Qatar Electricity & Water Co. (QEWS QD)
Gulf International Services (GISS QD)
Qatari Investors Group (QIGD QD)
Barwa Real Estate Co. (BRES QD)*
United Development Co. (UDCD QD)
Ooredoo (ORDS QD)
Vodafone Qatar (VFQS QD)
Nakilat (QGTS QD)
Milaha (QNNS QD)
Banks and Financial Services
Consumer Goods and Services
*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
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.
Simple Moving Average (SMA): A SMA is the average of the closing price of a security for a given period.
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.
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.
Ahmed M. Shehada
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
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