3 March Daily technical trader


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3 March Daily technical trader

  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 – 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 out. 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. 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) 11,771.83 UP UP 11,754.45 11,700.00 11,826.60 11,915.72 Al Rayan Islamic Index (QERI Index) 3,373.89 UP UP 3,350.00 3,329.75 3,382.68 3,400.30 Masraf Al Rayan (MARK QD) 38.95 UP UP 38.00 36.55 40.00 41.00 Commercial Bank of Qatar (CBQK QD)* 77.90 UP UP 77.00 76.00 78.20 78.80 Doha Bank (DHBK QD) 67.00 UP UP 66.50 66.00 67.00 68.50 Qatar Islamic Bank (QIBK QD) 75.70 DOWN UP 75.00 74.50 76.00 77.00 Qatar International Islamic Bank (QIIK QD)* 75.30 UP UP 74.40 73.30 75.30 76.20 Qatar Insurance (QATI QD) 65.10 FLAT UP 64.00 62.56 65.68 66.90 National Leasing Holding Co. (NLCS QD) 29.35 DOWN DOWN 29.15 28.50 29.95 30.60 Widam Food Co. (WDAM QD) 42.10 DOWN DOWN 41.90 40.45 43.45 44.50 Al Meera Consumer Goods Co. (MERS) 151.00 FLAT UP 151.00 148.90 153.70 154.90 Industries Qatar (IQCD QD) 196.00 UP UP 195.00 194.00 197.70 199.00 Qatar Electricity & Water Co. (QEWS QD) 174.00 UP UP 172.00 170.91 176.64 178.60 Gulf International Services (GISS QD)* 85.70 UP UP 84.60 82.80 85.80 90.00 Qatari Investors Group (QIGD QD) 41.50 DOWN DOWN 41.00 39.50 43.45 44.20 Barwa Real Estate Co. (BRES QD) 32.30 UP UP 32.00 31.60 32.85 33.50 United Development Co. (UDCD QD)* 21.40 DOWN DOWN 21.00 20.50 21.70 22.00 Ooredoo (ORDS QD) 150.00 FLAT UP 149.00 145.90 151.00 153.50 Vodafone Qatar (VFQS QD) 12.12 UP UP 12.09 11.89 12.40 12.66 Nakilat (QGTS QD) 21.75 UP UP 21.44 21.25 21.83 22.00 Milaha (QNNS QD) 91.50 DOWN UP 91.30 90.00 93.00 95.10 Banks and Financial Services Banks and Consumer Goods and Services Consumer G Industrials Real Estate Telecom 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 saugata.sarkar@qnbfs.com.qa Head of Trading Tel: (+974) 4476 6535 ahmed.shehada@qnbfs.com.qa Head of Sales Tel: (+974) 4476 6533 keith.whitney@qnbfs.com.qa Manager - HNWI Tel: (+974) 4476 6544 sahbi.alkasraoui@qnbfs.com.qa 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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