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7 May 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 snapped its four-day winning streak and shed around 54 points (-0.42%) penetrating below its support of 12,939.80. The index witnessed a gap-up opening and touched its intraday high of 13,015.82, but later reversed as buyers booked profit at a higher level. The index needs to move above 12,939.80 on a closing basis in order to continue its bullish momentum toward 13,000.0. Any failure to move above 12,939.80 may result in consolidation. Ooredoo: Short-Term – Pullback ORDS failed to make any further headway above QR148.0 on Monday and penetrated below the 21-day moving average yesterday. We expect the stock to drift down further and test its support of QR145.0, which is also in proximity to the 55-day moving average. However, if the stock manages to reclaim the 21-day moving average it may attract buyers. Meanwhile, the RSI is declining toward the mid- line, while the MACD is growing more bearish. Al Rayan Islamic Index: Short-Term – Neutral The QERI Index halted its four straight day of gains and declined around 10 points (-0.24%) to close in the red at 4,291.46. The index went close to its all-time high of 4,317.91, but failed to make any further headway and reversed on the back of profit-booking. However, the index’s short-term uptrend remains intact. The index has support near 4,248.0. Only a dip below this level may drag the index down; until then the bulls need not worry. Al Meera Consumer Goods Co.: Short-Term – Upmove MERS moved above the ascending triangle resistance of QR185.0 and gained 0.32% even after market turbulence. Moreover, the stock developed a bullish Marubozu candle pattern indicating a likely continuation of this upmove. We believe the stock may now approach its next resistance of QR187.50. However, a dip below QR185.0 may result in a pullback. Meanwhile, the RSI is showing signs of a further upmove, thus reinforcing our bullish outlook for the stock. United Development Co.: Short-Term – Upmove UDCD cleared the resistance of the ascending triangle at QR26.0 after repeated failed attempts in the past supported by large volumes, which is a positive sign. We believe if the stock manages to cling onto QR26.0 it may proceed toward QR26.50, followed by QR27.35. However, any retreat below QR26.0 may pull the stock back into the congestion zone. Meanwhile, the RSI is moving up toward the overbought territory, while the MACD is widening away on the upside. Qatar Electricity & Water Co.: Short-Term – Pullback QEWS reversed after testing the QR186.0 level on Monday and breached its supports of QR184.0 & the 21-day moving average in a single swoop. Moreover, the stock developed a red Marubozu candle pattern indicating a bearish sign. With both the momentum indicators in declining mode QEWS’s preferred direction seems to be on the downside and the stock may test QR180.0. However, in case the stock manages to move above QR183.49 it may halt its downmove.
  • 2. Contacts 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 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) 12,933.83 UP UP 12,900.00 12,850.00 12,939.80 13,000.00 Al Rayan Islamic Index (QERI Index) 4,291.46 UP UP 4,247.34 4,200.00 4,301.89 4,318.00 Banks and Financial Services Banks and Masraf Al Rayan (MARK QD) 48.05 UP UP 47.00 45.90 48.50 49.75 Commercial Bank of Qatar (CBQK QD) 69.00 FLAT UP 67.30 66.50 69.80 70.70 Doha Bank (DHBK QD) 65.40 UP UP 63.90 62.00 65.70 66.40 Qatar Islamic Bank (QIBK QD) 88.30 UP UP 87.80 86.00 89.00 90.70 Qatar International Islamic Bank (QIIK QD) 87.00 UP UP 86.10 83.00 89.00 90.50 Qatar Insurance (QATI QD) 76.80 UP UP 74.80 72.50 77.00 79.00 Al Khalij Commercial Bank (KCBK QD) 23.16 UP UP 22.90 22.49 23.49 24.00 Consumer Goods and Services Consumer G Medicare Group (MCGS QD) 88.40 UP UP 87.80 85.00 90.00 92.50 Al Meera Consumer Goods Co. (MERS QD)* 185.60 UP UP 185.00 183.00 187.50 190.00 Industrials Industries Qatar (IQCD QD) 186.50 UP UP 186.40 183.00 188.50 194.00 Qatar Electricity & Water Co. (QEWS QD)* 182.00 DOWN UP 180.00 178.18 184.00 186.00 Gulf International Services (GISS QD) 88.70 DOWN UP 86.60 84.80 90.00 93.00 Qatari Investors Group (QIGD QD) 69.00 UP UP 68.40 64.70 71.70 74.00 Real Estate Barwa Real Estate Co. (BRES QD) 38.80 UP UP 38.40 37.40 39.70 40.50 United Development Co. (UDCD QD)* 26.05 UP UP 25.29 24.70 26.50 27.35 Telecom Ooredoo (ORDS QD)* 146.90 DOWN UP 145.00 143.00 148.00 149.00 Vodafone Qatar (VFQS QD) 18.71 UP UP 17.99 17.30 19.29 20.00 Transportat Nakilat (QGTS QD) 25.40 UP UP 25.00 24.61 26.00 26.50 Milaha (QNNS QD) 96.30 DOWN UP 95.10 93.00 96.50 98.30