4 March Daily technical trader Presentation Transcript
TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER
QE Index: Short-Term – Downmove
Al Rayan Islamic Index: Short-Term – Downmove
National Leasing Holding Co.: Short-Term – Downmove
The QE Index fell for the fourth consecutive session, breaching the
supports of 11,754.45 & 11,700.0 levels in a single swoop and caved
under selling pressure. The index is currently trading just above its
immediate support of 11,660.50. We believe if the weakness
continues below this level, the index may drift down and test
11,600.0. Meanwhile, the prognosis at this time frame is supporting a
further decline as both momentum indicators are looking weak.
The QERI Index failed to make any further headway above the
resistance of 3,382.68 and continued its decline closing below the
3,350.0 level. We believe the bears may continue their domination
over the bulls and pull the index down to test its support at 3,329.75.
Meanwhile, the RSI is moving down from the overbought territory,
while the MACD has crossed the signal line in a bearish manner
suggesting a continued weakness.
NLCS breached the supports of QR29.15 and the descending triangle
pattern in a single trading session yesterday. With the RSI moving
down further from the mid-line and the MACD growing more bearish,
NLCS’ preferred direction seems to be on the downside. We believe
the stock is steadily declining over the past few days and may
continue to drift lower and test QR28.50. However, if the stock
manages to reclaim the QR29.15 level it may halt its downmove.
Widam Food Co.: Short-Term – Downmove
Industries Qatar: Short-Term – Downmove
Barwa Real Estate Co.: Short-Term – Downmove
WDAM continued its decline yesterday after breaching the support of
QR42.30 on Thursday. Moreover, the stock has been in downtrend
mode since facing uncertainty in clearing the 55-day moving average.
The recent price action and increased volumes indicate that WDAM
may continue to push the price toward QR40.45. Moreover, both
momentum indicators are providing bearish signals with no immediate
trend reversal signs.
IQCD penetrated below the interim support of QR195.0 on the back
of large volumes. Moreover, the stock has been experiencing selling
pressure since topping the rally at QR202.90, and has been declining
over the past few days. With both momentum indicators moving
down, IQCD may continue to head lower and test QR190.0. Any
sustained weakness below this level may drag the stock further down
and test the 21-day moving average.
BRES dipped below the supports of QR32.0 and the 21-day moving
average in a single swoop. Moreover, the stock has been moving
along the descending trendline over the past few days, which had
restricted its bullish move. In addition, the stock developed a bearish
Marubozu candle pattern indicating a likely continuation of this
downmove. We believe the stock may continue to move lower and
test the 55-day moving average, followed by the QR30.85 level.
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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
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Tel: (+974) 4476 6535
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Manager - HNWI
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