8 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 slipped around 39 points (-0.30%) for the second straight session and closed below the 12,900.0 psychological level. The index momentarily managed to move above its key resistance near 12,940.0, but could not cling onto it and gradually declined as buyers once again booked profits at a higher level. The index has its interim support near 12,850.0, but a breach below this level may warn of a further correction, which could drag it to test 12,770.0. Vodafone Qatar: Short-Term – Pullback VFQS breached its interim support of QR18.75 on Tuesday and continued its decline penetrating below the QR17.99 level. Moreover, volumes were also large on the lower move, which is a negative sign. We believe the stock may weaken further and drift down toward QR17.30. However, a close above QR17.99 may attract buyers. Meanwhile, the RSI has shown a bearish divergence, while the MACD has crossed the signal line into the negative territory. Al Rayan Islamic Index: Short-Term – Neutral The QERI Index continued to books profits for the second consecutive day and shed around 19 points (-0.44%) to settle at 4,272.49. The support is seen near the 4,250.0 level, while the index faces its resistance near the 4,302.0 level. We believe the index may oscillate within this range. Only a move above or below these levels may decide the next direction of the index; until then it may consolidate, thus supporting our neutral outlook. Al Meera Consumer Goods Co.: Short-Term – Uptrend MERS cleared the resistance of QR187.80 and tagged a new all-time high. The stock has been in consolidation mode over the past few days and finally gave a breakout above QR187.80. We believe based on the recent price action and pick up in volumes the stock may continue to move higher recording new highs. However, traders may keep a close watch on QR187.80 for any reversal signs. Meanwhile, the RSI is moving up in a bullish manner. Gulf International Services: Short-Term – Bounce Back GISS gained 1.47% and moved higher on the back of large volumes indicating rising buying interest. The stock developed a bullish engulfing candle pattern suggesting a continuation of this upmove. The stock is currently sitting exactly at its resistance of QR90.0, which is also in proximity to the 21-day moving average. A move above these levels may trigger a fresh higher wave, which could test QR93.0. Any failure to clear QR90.0 may result in consolidation. Barwa Real Estate Co.: Short-Term – Pullback BRES penetrated below its descending triangle support of QR38.40 and has been in declining mode since topping the rally at QR40.20. Moreover, the stock developed a bearish Marubozu candle pattern indicating a likely continuation of this pullback. Although BRES is trading close to its immediate support of the 21-day moving average it seems unlikely that the stock may cling onto it and decline further to test QR37.40. Both the indicators are providing bearish signals.
  • 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 saugata.sarkar@qnbfs.com.qa keith.whitney@qnbfs.com.qa sahbi.alkasraoui@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) 12,894.93 UP UP 12,854.20 12,768.17 12,939.80 13,000.00 Al Rayan Islamic Index (QERI Index) 4,272.49 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) 48.00 UP UP 47.00 45.90 48.50 49.75 Commercial Bank of Qatar (CBQK QD) 69.00 FLAT UP 68.40 67.30 69.80 70.70 Doha Bank (DHBK QD) 65.10 UP UP 63.90 62.00 65.70 66.40 Qatar Islamic Bank (QIBK QD) 87.50 UP UP 86.00 84.70 89.00 90.70 Qatar International Islamic Bank (QIIK QD) 86.90 UP UP 86.10 83.00 89.00 90.50 Qatar Insurance (QATI QD) 76.00 FLAT UP 74.80 72.50 77.00 79.00 Al Khalij Commercial Bank (KCBK QD) 23.07 FLAT UP 22.90 22.49 23.49 24.00 Consumer Goods and Services Consumer G Medicare Group (MCGS QD) 87.60 UP UP 87.00 86.00 87.80 90.00 Al Meera Consumer Goods Co. (MERS QD)* 189.80 UP UP 187.50 185.00 190.00 194.80 Industrials Industries Qatar (IQCD QD) 188.50 UP UP 186.40 183.00 188.50 194.00 Qatar Electricity & Water Co. (QEWS QD) 183.50 FLAT UP 180.00 178.18 184.00 186.00 Gulf International Services (GISS QD)* 90.00 FLAT UP 86.60 84.80 90.00 93.00 Qatari Investors Group (QIGD QD) 70.20 UP UP 68.40 64.70 71.70 74.00 Real Estate Barwa Real Estate Co. (BRES QD)* 38.00 FLAT UP 37.40 36.80 38.40 39.20 United Development Co. (UDCD QD) 25.90 UP UP 25.29 24.70 26.50 27.35 Telecom Ooredoo (ORDS QD) 145.80 DOWN UP 145.00 143.00 148.00 149.00 Vodafone Qatar (VFQS QD)* 17.89 UP UP 17.30 16.89 17.99 18.75 Transportat Nakilat (QGTS QD) 24.60 UP UP 24.20 23.90 25.00 25.90 Milaha (QNNS QD) 96.90 FLAT UP 96.50 95.10 98.30 100.10