30 June Daily technical trader
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  • 1. Page 1 of 2 TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER QE Index: Short-Term – Down The QE Index tumbled further, falling 1.24% to close at 11,669.43. The index fell below the 11,500 level momentarily, before recovering from the day’s low to move above its support level of 11,646. Although the short-term trend remains bearish, the intra-day recovery suggests that the index may witness a temporary bounce back. The RSI and the MACD continue to indicate weakness in the QE index. On the upside, 11,826.6 would be a strong resistance level. Al Khalij Commercial Bank: Short-Term – Downmove KCBK has been trading alongside a descending trend-line and fell 2.44% on Sunday to close at QR20.0. The stock broke its support level of QR20.0 during the day, but recovered later. The stock formed a bearish engulfing candlestick pattern, suggesting further downside. Both RSI and MACD are trending lower, supporting the bearish view on the stock. If KCBK closes below QR20, it can test its next support level at 19.60. QE Al Rayan Islamic Index: Short-Term – Down The QERI index declined another 2.83% on Sunday to close at 3,828.37. The index gave a gap down opening and broke the support of 3,873.14. The recent fall in the index has been accompanied by slightly increased volumes, while both the technical indicators continue to remain on the downside. The index is likely to continue its downward move and test its support at 3,692. The earlier support of 3,828 now acts as its immediate resistance. Medicare Group: Short-Term – Downmove MCGS dropped 3.61% to close at QR74.70. The stock has been trending lower for the past couple of months, but the latest fall shows further weakness. The MACD is diverging from the signal line on the negative side, while the RSI has moved lower into the oversold zone. The stock is likely to test its support level of QR73.0, below which the next support level is seen at QR67.50. However, investors should exercise caution if the stock moves above the QR78.1 level. Qatar Insurance Co.: Short-Term – Upmove QATI has made a new high of QR82.5 on an intraday basis and closed at its immediate resistance of QR80.0, with the 55-day moving average providing support. A bullish engulfing candlestick pattern has formed, suggesting positive sentiments. The RSI is trending higher, while the MACD is flat. The stock is likely to test its resistance of QR81.40. However, investors should exercise caution if the stock slips below the support level of QR79.0 on a closing basis. Gulf International Services: Short-Term – Downmove After making a pattern of higher highs and higher lows till May, GISS has been trending lower over the last few weeks. The stock fell on Sunday to close just above both the 21-day and 55-day moving averages. A close below the 21-day moving average (QR92.68) can lead the stock to test its support of QR90.0. The RSI is trending lower, while the MACD is flat. However, investors should exercise caution if the stock closes above the QR95.0 level.
  • 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) 11,669.43 DOWN DOWN 11,646.44 11,561.56 11,754.45 11,826.60 Al Rayan Islamic Index (QERI Index) 3,828.37 DOWN DOWN 3,692.56 3,498.31 3,873.14 3,974.62 Banks and Financial Services Banks and Masraf Al Rayan (MARK QD)* 46.50 DOWN UP 44.15 43.50 47.20 48.50 Commercial Bank of Qatar (CBQK QD) 62.70 DOWN DOWN 62.50 62.17 63.00 63.25 Doha Bank (DHBK QD) 55.50 DOWN DOWN 55.00 54.50 55.80 56.10 Qatar Islamic Bank (QIBK QD) 84.00 DOWN UP 83.50 81.70 86.90 90.00 Qatar International Islamic Bank (QIIK QD) 75.70 DOWN DOWN 75.50 74.40 78.90 80.70 Qatar Insurance (QATI QD) 80.00 FLAT UP 79.00 77.28 80.00 81.40 Al Khalij Commercial Bank (KCBK QD) 20.00 DOWN DOWN 20.00 19.60 20.17 20.88 Consumer G Medicare Group (MCGS QD) 74.70 DOWN DOWN 73.00 67.50 78.10 79.00 Al Meera Consumer Goods Co. (MERS QD) 168.00 FLAT DOWN 164.00 161.00 175.00 179.00 Industrials Industries Qatar (IQCD QD) 169.00 DOWN DOWN 167.80 166.80 169.50 173.90 Qatar Electricity & Water Co. (QEWS QD) 177.00 FLAT DOWN 176.27 172.91 177.10 178.64 Gulf International Services (GISS QD) 92.90 FLAT FLAT 92.00 90.00 93.00 95.00 Qatari Investors Group (QIGD QD) 50.50 DOWN DOWN 50.00 48.40 54.40 56.00 Real Estate Barwa Real Estate Co. (BRES QD)* 35.60 DOWN UP 34.80 34.60 36.50 37.20 United Development Co. (UDCD QD) 22.35 DOWN DOWN 22.00 21.69 22.80 23.09 Telecom Ooredoo (ORDS QD) 124.40 DOWN DOWN 124.37 123.70 125.80 128.00 Vodafone Qatar (VFQS QD)* 16.16 DOWN UP 14.03 13.50 16.89 17.70 Transportat Nakilat (QGTS QD) 21.00 DOWN DOWN 20.98 20.83 21.56 21.80 Milaha (QNNS QD)* 88.90 DOWN DOWN 88.00 87.30 90.20 91.20