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 – Breakout
The QE Index fell by around 68 points (-0.57%) last week. Moreover,
the index penetrated below the support of 11,826.60 as bears
continued their domination over the bulls for the third consecutive
session. Traders may need to keep a close watch on 11,754.45, as
any dip below this level may drag the index to test the 11,700.0 level.
Meanwhile, the RSI is moving down, while the MACD is about to
converge the signal line in a bearish manner.
The QERI Index declined marginally to close the session at 3,373.89.
The index momentarily moved above the resistance of 3,382.68, but
could not cling onto it and retreated as buyers backed away from
higher prices. Meanwhile, the index needs to move above 3,382.68
and remain above this level in order to gain further momentum. Any
failure to move above this level on a closing basis, could witness
sustained weakness and pull the index to test the 3,350.0 level.
CBQK cleared the resistances of QR77.0 and the long-term
ascending trendline in a single swoop, tagging a new 52-week high.
Moreover, the stock developed a bullish Marubozu candle pattern
indicating continuation of the upmove. Further, the bullishness in the
RSI is intact, while the MACD is diverging away from the signal line in
a bullish manner indicating the strength could continue and the
possibility of a further rally.
Qatar International Islamic Bank: Short-Term – Upmove
Gulf International Services: Short-Term – Downmove
United Development Co.: Short-Term – Breakdown
QIIK continued its upmove, which is a positive sign. The stock is
currently sitting right at its resistance of QR75.30. A move above this
level may confirm the bullish move and may push the stock toward
QR76.20. However, a dip below QR75.30 may drag the stock to test
QR74.40. Meanwhile, with volumes picking up and the RSI moving
strongly in the overbought territory, a short-term rally may not be ruled
GISS developed a shooting star pattern on Tuesday, which often
leads to either consolidation or decline. Moreover, the stock declined
on Wednesday & Thursday and fell below the support of QR85.80 on
the back of large volumes providing a confirmation of this reversal
pattern. In addition, both the RSI and MACD lines are looking weak
indicating a downmove. Thus, we believe GISS may drift down further
and test its immediate support of the QR84.60 level.
UDCD breached the support of QR22.0 on Wednesday and
continued its decline on Thursday dipping below QR21.70. Moreover,
the stock has been tagging lower lows on the charts since the stock
fell below the 21-day moving average. The next downside targets are
at QR21.0 and QR20.50 either of which could provide some relief.
Meanwhile, the prognosis at this time frame implies further correction,
with both momentum indicators in downtrend mode.
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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
PO Box 24025
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