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4 August 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 – Neutral The QE Index extended its losses for the fourth consecutive day and ended the volatile session in red. The index momentarily moved above the 12,900.0 level and went close to clear its important resistance of 12,940.0, but failed to hold onto its gains and retreated. Meanwhile, the index is trading close to the 55-day moving average. If the index manages to sustain above this level, it may attempt to bounce back, or else it may retreat further. Al Meera Consumer Goods Co.: Short-Term – Rebound MERS advanced 2.37% and cleared both the resistances of QR185.0 and the ascending wedge line in a single trading session. Moreover, the stock developed a bullish Marubozu candlestick pattern, indicating a likely continuation of this bounce back. We believe based on the recent price swing and spike in volumes, the stock may march toward QR187.80. Meanwhile, the RSI has shown a bullish divergence. However, a retreat below QR185.0 may drag the stock. Al Rayan Islamic Index: Short-Term – Bounce Back The QERI Index snapped its three-day losing streak and rebounded by 0.91% to settle above 4,300.0 and kept its upward hopes alive. The index faces its immediate resistance at 4,341.10. However, traders are advised to wait and watch if there is any further follow- through to yesterday’s bounce back. The index needs to close above the 4,341.10 level in order to proceed toward 4,400.0. Conversely, any failure to move above this level may result in consolidation. Industries Qatar: Short-Term – Pullback IQCD declined further and penetrated below its support of QR172.30 yesterday. The stock has been experiencing selling pressure after failing to move above the 55-day moving average and has been underperforming. Further, both the momentum indicators are providing bearish signals, indicating a continuation of this pullback. We believe the stock may drift down further and test QR170.10. Conversely, a close above QR172.30 may provide some relief. Al Khalij Commercial Bank: Short-Term - Rebound KCBK gained 1.11% and cleared both the resistances of QR22.60 and the descending trendline, which had restricted its bullish move in the past. Notably, volumes were also large on the rise, indicating increased optimism among traders. We believe the stock may advance toward QR22.85. Any move above this level may spark additional buying interest and push the stock further to test QR23.23. However, a dip below QR22.60 may pull the stock down. Medicare Group: Short-Term – Uptrend MCGS jumped 3.37% and moved above the interim resistance of QR104.50 to tag a new all-time high. The stock has been in an uptrend mode since moving above both the moving averages. We believe the stock may continue its bullish momentum and register further gains. Moreover, both the momentum indicators are moving higher with no immediate trend reversal signs. However, a dip below QR105.90 may halt its current uptrend.
  • 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) 12,865.50 UP FLAT 12,850.00 12,768.70 12,939.80 13,000.00 Al Rayan Islamic Index (QERI Index) 4,334.19 UP UP 4,301.89 4,247.34 4,341.10 4,400.00 Banks and Financial Services Banks and Masraf Al Rayan (MARK QD) 52.80 DOWN DOWN 52.50 51.80 54.00 55.80 Commercial Bank of Qatar (CBQK QD) 67.50 FLAT FLAT 67.30 66.50 68.30 69.50 Doha Bank (DHBK QD) 55.90 DOWN DOWN 55.50 54.40 56.50 57.40 Qatar Islamic Bank (QIBK QD) 106.00 UP UP 104.50 102.00 107.00 109.50 Qatar International Islamic Bank (QIIK QD) 83.70 DOWN DOWN 81.50 80.70 85.00 86.10 Qatar Insurance (QATI QD) 89.10 UP UP 88.90 87.30 91.00 92.40 Al Khalij Commercial Bank (KCBK QD)* 22.75 UP UP 22.60 22.35 22.85 23.23 Consumer Goods and Services Consumer G Medicare Group (MCGS QD)* 107.50 UP UP 105.90 104.50 110.50 112.00 Al Meera Consumer Goods Co. (MERS QD)* 186.00 UP UP 185.00 181.60 187.80 190.00 Industrials Industrials Industries Qatar (IQCD QD)* 172.00 DOWN DOWN 170.10 168.00 172.30 173.90 Qatar Electricity & Water Co. (QEWS QD) 182.00 DOWN DOWN 182.00 180.00 184.00 186.00 Gulf International Services (GISS QD) 113.50 UP UP 111.90 109.00 115.00 119.50 Qatari Investors Group (QIGD QD) 50.80 DOWN DOWN 49.75 47.70 51.00 52.40 Real Estate Real Estate Barwa Real Estate Co. (BRES QD) 38.95 DOWN DOWN 38.40 37.50 39.20 39.70 United Development Co. (UDCD QD) 28.20 UP UP 27.20 26.45 28.55 29.00 Telecom Telecom Ooredoo (ORDS QD) 128.80 DOWN DOWN 126.00 123.70 129.70 132.00 Vodafone Qatar (VFQS QD) 19.10 UP FLAT 18.75 17.99 19.29 20.00 Transportation Transportat Nakilat (QGTS QD) 23.93 UP FLAT 23.60 23.00 24.12 24.45 Milaha (QNNS QD) 91.00 DOWN DOWN 90.20 88.80 91.30 92.90