30 March Daily technical trader Presentation Transcript
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TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER
QE Index: Short-Term – Upmove
The QE Index rallied aggressively and gained around 151 points
(1.33%) to close at its weekly high. The index breached its
resistances of the 55-day and 21-day moving averages as well as the
11,400.0 level in a single swoop displaying good strength.
Meanwhile, with the RSI showing a bullish divergence, and the
MACD showing signs of recovery, the index is likely to continue its
bullish move on the back of strong momentum.
Commercial Bank of Qatar: Short-Term – Breakout
CBQK cleared the resistances of QR60.92 as well as the 55-day and
21-day moving averages in a single swoop. The recent price action
and spike in volumes indicate that the stock may continue its advance
targeting the QR63.67 level. However, a retreat below the 21-day
moving average may result in a false breakout. Meanwhile, the RSI
has shown a bullish divergence, while the MACD is closing the signal
line from below indicating the possibility of a short-term rally.
Al Rayan Islamic Index: Short-Term – Upmove
The QERI Index continued its strong run and tagged another new all-
time high settling above the 3,500.0 level as the bulls were under full
control for the third consecutive session. Meanwhile, the index has
been in upmove mode since moving above the 3,490.49 level and is
currently trading in an uncharted territory. We believe the index may
continue to tag new highs as it has strong support from both the
momentum indicators, which are providing bullish signals.
Doha Bank: Short-Term – Upmove
DHBK moved above the resistances of the ascending triangle at
QR59.20 and the 21-day moving average in a single trading session.
With the RSI growing strong and the MACD diverging away from the
signal line in a bullish manner, it appears DHBK’s preferred near-term
direction is toward the upside. We believe the stock may continue its
bullish momentum and test QR62.0. However, a decline below the
21-day moving average may halt its upmove.
National Leasing Holding Co.: Short-Term – Upmove
NLCS penetrated above the resistances of the 21-day moving
average and QR29.15 on the back of large volumes after
consolidating below it over the past few days. We believe this strong
breach of resistances has bullish implications and may test & surpass
the 55-day moving average targeting the QR29.95 level. However, a
dip below QR29.15 may drag the stock back into the congestion
zone. Meanwhile, both the momentum indicators are pointing higher.
Industries Qatar: Short-Term – Upmove
IQCD surpassed its resistances of QR178.30 and the 55-day moving
average after consolidating below it over the past few days. Notably,
volumes were also large on the rise indicating that potential buyers
are stepping in. Moreover, the stock developed a bullish Marubozu
candle pattern indicating the continuation of this upmove. We believe
the stock may march toward its 21-day moving average. The RSI has
rejected the mid-line and is moving up in a bullish manner.
Saugata Sarkar Keith Whitney Sahbi Kasraoui QNB Financial Services SPC
Head of Research Head of Sales Manager - HNWI Contact Center: (+974) 4476 6666
Tel: (+974) 4476 6534 Tel: (+974) 4476 6533 Tel: (+974) 4476 6544 PO Box 24025
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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) 11,482.34 UP UP 11,400.00 11,338.41 11,520.55 11,660.45
Al Rayan Islamic Index (QERI Index) 3,533.01 UP UP 3,490.49 3,481.42 3,550.00 3,580.00
Banks and Financial Services Banks and
Masraf Al Rayan (MARK QD) 38.60 FLAT UP 38.00 36.55 39.10 40.00
Commercial Bank of Qatar (CBQK QD)* 62.80 UP UP 61.67 60.92 63.67 64.58
Doha Bank (DHBK QD)* 60.90 UP DOWN 60.00 58.50 62.00 63.30
Qatar Islamic Bank (QIBK QD) 74.50 UP DOWN 74.10 72.80 75.00 76.00
Qatar International Islamic Bank (QIIK QD) 71.40 DOWN FLAT 70.30 69.40 72.80 74.40
Qatar Insurance (QATI QD) 63.50 DOWN UP 62.64 61.52 65.68 66.90
National Leasing Holding Co. (NLCS QD)* 29.20 UP FLAT 28.00 27.52 29.95 30.25
Consumer Goods and Services Consumer G
Widam Food Co. (WDAM QD) 45.95 DOWN UP 44.50 43.20 47.80 48.75
Al Meera Consumer Goods Co. (MERS) 151.00 FLAT UP 150.00 148.90 151.50 154.90
Industries Qatar (IQCD QD)* 183.00 DOWN UP 181.40 180.00 184.50 190.00
Qatar Electricity & Water Co. (QEWS QD) 170.50 UP UP 168.00 165.36 170.91 174.36
Gulf International Services (GISS QD) 77.40 UP UP 75.20 73.20 78.80 80.00
Qatari Investors Group (QIGD QD) 55.20 UP DOWN 54.00 52.40 56.20 58.00
Barwa Real Estate Co. (BRES QD) 36.25 UP UP 35.80 34.80 36.80 37.40
United Development Co. (UDCD QD) 20.48 DOWN DOWN 20.00 19.75 20.50 21.00
Ooredoo (ORDS QD) 139.00 DOWN DOWN 138.50 136.00 141.00 143.50
Vodafone Qatar (VFQS QD) 12.00 DOWN UP 11.74 11.44 12.09 12.25
Nakilat (QGTS QD) 20.10 DOWN DOWN 19.80 19.50 20.26 20.44
Milaha (QNNS QD) 90.70 DOWN UP 89.40 88.60 91.30 93.00