29 May Daily technical trader


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29 May Daily technical trader

  1. 1. Page 1 of 2 TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER QE Index: Short-Term – Neutral The QE Index snapped its four-day winning streak and declined around 82 points (-0.60%). The index witnessed a gap-up opening and came close to breaking its record highs of 13,584.34, but frittered away all its gains and reversed as traders opted to book profits. Meanwhile, the index needs to move above 13,447.0 on a closing basis in order to continue its uptrend. On the flip side, any failure to move above 13,447.0 may result in consolidation. Qatar Electricity & Water Co.: Short-Term – Uptrend QEWS continued its bullish momentum and tagged a fresh new all- time high. Notably, volumes were also large on the rise which is a positive sign. We believe based on the recent price swings and strong momentum, the stock may continue its rally and record new highs. Meanwhile, the RSI is moving up in a bullish manner, while the MACD is diverging away from the signal line on the upside. However, traders may need to keep a close watch on QR194.0 for any reversal. Al Rayan Islamic Index: Short-Term – Neutral The QERI Index halted its four-day gaining streak and shed around - 0.84% to close at 4,458.05. The index momentarily moved above the 4,500.0 level, but could not hold onto its gains and retreated on the back of profit-booking. Meanwhile, the index is trading close to its interim support near the 4,445.0 level. We believe if the index manages to stay above this level it could set the stage for a test of 4,500.0. However, a dip below 4,445.0 may result in a test of 4,400.0. United Development Co.: Short-Term – Pullback UDCD failed to make any further headway above QR26.45 and retreated penetrating below the supports of the 21-day moving average and QR26.0 in a single swoop. This indicates that the upside level is capped. The negative slope on the RSI and the declining MACD line indicate that the stock may further move down. Thus, traders may consider selling the stock for a target of QR25.29, with a stop loss of the QR26.0 level. Doha Bank: Short-Term – Downmove DHBK breached the support of the 21-day moving average on Tuesday and continued to drift lower yesterday, breaching the QR63.90 level. The stock has been facing stiff resistance at the descending trendline, which it needs to surpass in order to move higher. Meanwhile, both momentum indicators look weak for a further downside. Thus, traders could consider selling this stock with a target of QR63.10 with a stop loss of QR63.90. Al Meera Consumer Goods Co.: Short-Term – Upmove MERS gained 0.82% and cleared the resistance of the ascending triangle at QR185.0 after consolidating below it over the past few days. Moreover, the stock developed a bullish Marubuzu candle pattern indicating a likely continuation of this upmove. Meanwhile, the RSI, which is in buy mode, is supporting this bullish sentiment. Traders could consider buying the stock at the current level for a target of QR187.50 with a stop loss of the QR185.0 level.
  2. 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) 13,418.27 UP UP 13,350.54 13,195.88 13,447.17 13,585.00 Al Rayan Islamic Index (QERI Index) 4,458.05 UP UP 4,444.86 4,400.00 4,500.00 4,550.00 Banks and Financial Services Banks and Masraf Al Rayan (MARK QD) 59.70 UP UP 59.00 58.00 59.90 61.00 Commercial Bank of Qatar (CBQK QD) 68.80 UP UP 67.80 66.30 69.80 70.70 Doha Bank (DHBK QD)* 63.80 DOWN UP 63.10 62.00 63.90 64.80 Qatar Islamic Bank (QIBK QD) 101.70 UP UP 101.10 99.50 102.00 104.50 Qatar International Islamic Bank (QIIK QD) 86.60 FLAT UP 86.10 83.00 87.80 89.00 Qatar Insurance (QATI QD) 75.70 DOWN UP 74.80 72.50 76.00 77.00 Al Khalij Commercial Bank (KCBK QD) 23.44 UP UP 23.23 22.90 23.49 24.00 Consumer Goods and Services Consumer G Medicare Group (MCGS QD) 86.50 DOWN UP 85.20 83.00 87.80 90.50 Al Meera Consumer Goods Co. (MERS QD)* 185.50 UP UP 185.00 183.00 187.50 190.00 Industrials Industrials Industries Qatar (IQCD QD) 190.70 UP UP 188.50 186.40 191.00 194.60 Qatar Electricity & Water Co. (QEWS QD)* 195.00 UP UP 194.00 192.00 196.00 200.00 Gulf International Services (GISS QD) 95.00 UP UP 93.00 91.80 95.00 97.00 Qatari Investors Group (QIGD QD) 65.30 FLAT UP 64.80 62.40 68.40 70.00 Real Estate Real Estate Barwa Real Estate Co. (BRES QD) 40.15 UP UP 39.70 39.20 40.40 41.00 United Development Co. (UDCD QD)* 25.70 UP UP 25.29 25.00 26.00 26.45 Telecom Telecom Ooredoo (ORDS QD) 154.10 UP UP 153.50 151.00 155.20 157.00 Vodafone Qatar (VFQS QD) 18.90 UP UP 18.75 18.49 18.98 19.29 Transportation Transportat Nakilat (QGTS QD) 23.94 FLAT UP 23.90 23.40 24.20 24.61 Milaha (QNNS QD) 96.80 UP UP 96.50 95.10 97.00 98.30