4 March Daily technical trader
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4 March Daily technical trader Presentation Transcript

  • 1. 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. Page 1 of 2
  • 2. Name (Ticker) Last Close Trend Short Term Support Long Term First Resistance Second First Second Qatar Exchange Index (QE Index) 11,664.02 UP UP 11,660.50 11,600.00 11,700.00 11,754.45 Al Rayan Islamic Index (QERI Index) 3,342.79 UP UP 3,329.75 3,300.00 3,350.00 3,382.68 Masraf Al Rayan (MARK QD) 38.95 UP UP 38.00 36.55 40.00 41.00 Commercial Bank of Qatar (CBQK QD) 77.00 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) 76.00 DOWN UP 75.00 74.50 76.00 77.00 Qatar International Islamic Bank (QIIK QD) 74.00 UP UP 73.30 72.80 75.30 76.20 Qatar Insurance (QATI QD) 65.80 UP UP 64.00 62.56 66.90 67.50 National Leasing Holding Co. (NLCS QD)* 29.00 DOWN DOWN 28.50 28.00 29.15 29.95 Widam Food Co. (WDAM QD)* 41.00 DOWN DOWN 40.45 38.70 41.90 42.30 Al Meera Consumer Goods Co. (MERS) 150.00 DOWN DOWN 148.90 147.00 151.00 153.70 Industries Qatar (IQCD QD)* 192.60 UP UP 190.00 185.64 195.00 197.70 Qatar Electricity & Water Co. (QEWS QD) 168.90 DOWN UP 168.00 165.36 170.91 172.00 Gulf International Services (GISS QD) 84.90 UP UP 84.60 82.80 85.80 90.00 Qatari Investors Group (QIGD QD) 41.90 DOWN DOWN 41.00 39.50 43.45 44.20 Barwa Real Estate Co. (BRES QD)* 31.40 DOWN UP 31.17 30.85 32.00 32.85 United Development Co. (UDCD QD) 21.35 DOWN DOWN 21.00 20.50 21.70 22.00 Ooredoo (ORDS QD) 148.40 DOWN UP 145.90 143.50 149.00 151.00 Vodafone Qatar (VFQS QD) 12.17 UP UP 12.09 11.89 12.40 12.66 Nakilat (QGTS QD) 21.58 UP UP 21.44 21.25 21.83 22.00 Milaha (QNNS QD) 93.70 UP UP 93.00 91.30 95.10 96.50 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