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TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER
QE Index: Short-Term – Down
The QE Index dropped 2.35% on Thursday to close at 11,816.50.
The index broke below its support levels of 12,100 and 11,916 in a
single trading session, and closed near its intra-day low on Thursday,
indicating continued weakness. The index has a short-term support
at 11,754, after which the next support is at 11,646. The RSI is
trending lower into the oversold zone, while the MACD is diverging on
the negative side, supporting the bearish view.
Milaha: Short-Term – Downmove
QNNS has been hitting lower lows and lower highs over the last few
months. The MACD has given a negative crossover signal, while the
RSI is trending lower. A move below the QR88.0 level can lead the
stock to test its Thursday’s low of QR86.10. On the upside, the stock
is facing resistance from its 21-day moving average (currently at
QR91.70). A close above this level may indicate a reversal from the
QE Al Rayan Islamic Index: Short-Term – Down
The QERI index plunged 2.64% 3,939.89 on Thursday. The index
closed at the lowest point of the day, forming a bearish Marubozu
candlestick pattern, suggesting further downside for the index in the
short-term. Both the technical indicators support this bearish view.
The index is likely to test its support of 3,873.14, after which the next
support is seen at 3,692.56. On the upside, the index faces resistance
Vodafone Qatar: Short-Term – Downmove
VFQS has broken below its 55-day moving average (QR18.54) in a
decisive manner to close at QR17.95. The stock has formed a
bearish Marubozu candlestick pattern for two consecutive days now,
indicating continued weakness. A move below QR17.70 can lead the
stock to test its support of QR16.89. The RSI is in a sharp downtrend,
while the MACD is diverging away from the signal line on the
downside, supporting the bearish view on the stock.
Barwa Real Estate Co.: Short-Term – Breakdown
After trading in a tight range for several days, BRES fell 2.62% on
Thursday to close at QR37.20. It broke its support level of QR37.60
and closed near the lowest point of the day. The RSI is moving lower
and is close to the overbought zone, while the MACD is diverging
from the signal line on the downside. The stock is likely to test the
support of QR36.50. However, investors should exercise caution, if
the stock moves back above QR37.60 on a closing basis.
Masraf Al Rayan: Short-Term – Downmove
MARK broke its support of QR49.75 and fell 4.76% to close at
QR48.0 on Thursday. The stock closed at its intra-day low,
suggesting it may witness further downside from the current levels.
MARK has support at QR47.2, below which it can test the level of
QR44.15. Both the technical indicators are in line with the bearish
view on the stock. However, investors should exercise caution if
MARK moves back above the QR52.0 level on a closing basis.
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
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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
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*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
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.
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) 11,816.50 DOWN DOWN 11,754.45 11,646.44 11,826.60 11,916.92
Al Rayan Islamic Index (QERI Index) 3,939.89 DOWN DOWN 3,873.14 3,692.56 3,974.62 4,100.03
Banks and Financial Services Banks and
Masraf Al Rayan (MARK QD)* 48.00 DOWN UP 47.20 44.15 48.50 49.75
Commercial Bank of Qatar (CBQK QD) 63.30 DOWN DOWN 63.25 63.00 63.67 64.17
Doha Bank (DHBK QD) 55.00 DOWN DOWN 55.00 54.50 55.20 55.80
Qatar Islamic Bank (QIBK QD) 85.10 DOWN UP 83.50 81.70 86.90 90.00
Qatar International Islamic Bank (QIIK QD) 76.00 DOWN DOWN 75.50 74.40 78.90 80.70
Qatar Insurance (QATI QD) 79.00 FLAT UP 79.00 75.10 80.00 81.40
Al Khalij Commercial Bank (KCBK QD) 20.50 DOWN DOWN 20.17 20.00 20.88 21.00
Medicare Group (MCGS QD) 77.50 DOWN DOWN 73.00 67.50 78.10 79.00
Al Meera Consumer Goods Co. (MERS QD) 170.00 FLAT DOWN 164.00 161.00 175.00 179.00
Industries Qatar (IQCD QD) 170.00 DOWN DOWN 169.50 167.80 173.90 174.90
Qatar Electricity & Water Co. (QEWS QD) 178.00 FLAT DOWN 177.10 176.27 178.64 182.00
Gulf International Services (GISS QD) 93.50 FLAT FLAT 93.00 90.00 95.00 98.00
Qatari Investors Group (QIGD QD) 52.50 DOWN DOWN 50.00 48.40 54.40 56.00
Barwa Real Estate Co. (BRES QD)* 37.20 DOWN UP 37.20 36.50 37.60 38.05
United Development Co. (UDCD QD) 23.24 DOWN DOWN 23.09 22.80 23.42 24.00
Ooredoo (ORDS QD) 125.30 DOWN DOWN 124.37 123.70 125.80 128.00
Vodafone Qatar (VFQS QD)* 17.95 DOWN UP 17.70 16.89 19.29 20.00
Nakilat (QGTS QD) 21.95 DOWN DOWN 21.80 21.56 22.00 22.40
Milaha (QNNS QD)* 88.40 DOWN DOWN 88.00 87.30 90.20 91.20