10 April Daily Technical Trader


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10 April Daily Technical Trader

  1. 1. Page 1 of 2 TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER QE Index: Short-Term – Uptrend The QE Index after pausing for just a single day on Tuesday continued its relentless rally to close at its intraday high of 12,375.03 on the back of large volumes, indicating a further upside strength. The index comfortably breached the 12,200.0 and 12,300.0 psychological levels for the first time since 2008. We believe the index is in bullish mode and may continue to proceed ahead targeting the 12,400.0-12,450.0 levels. Both indicators look strong. Qatar International Islamic Bank: Short-Term – Upmove QIIK surpassed the resistances of QR75.80 and QR77.30 in a single trading session. We believe this strong breach of resistances has bullish implications and provides an upside target of QR79.72. Any move above this level may spark additional buying interest, which may push the stock to test the QR81.50 level. However, any dip below QR77.30 may result in a false breakout. Meanwhile, both the RSI and the MACD lines are favoring a further advance. Al Rayan Islamic Index: Short-Term – Uptrend The QERI index continued its phenomenal run and surged 2.55% for the twelfth consecutive session on the back of large volumes. Moreover, the index has been consistently tagging new highs and is showing no immediate trend reversal signs. Meanwhile, the RSI’s perpetual overbought territory doesn’t seem to be affecting the index’s uptrend mode, while the MACD continues to grow in a bullish manner. Both indicators support the index for a higher move. United Development Co.: Short-Term – Upmove UDCD breached the resistances of QR21.69 and QR22.0 for the first time since January, which is a positive sign. With volumes also picking up it seems that potential buyers are stepping in. The stock has been gaining strength since moving above the 21-day moving average. The stock faces its immediate resistance of QR22.38. With both the indicators pointing higher, it seems UDCD may be ready for a move above this level and may advance further to test QR22.66. Commercial Bank of Qatar: Short-Term – Upswing CBQK cleared the resistances of QR65.75 and QR67.50 after consolidating below it over the past few days, and surged 4.27% tagging a 52-week high. The recent price action and rising volumes indicate that CBQK will likely continue pushing the price toward QR70.0, followed by QR71.90. Meanwhile, the RSI is going strongly in the overbought territory, while the MACD is diverging away from the signal line on the upside indicating continued strength. Qatar Electricity & Water Co. : Short-Term – Uptrend QEWS moved higher above the QR180.0 level and tagged a new all- time high after consolidating below it over the past few days. Moreover, the stock developed a bullish Marubozu candle pattern indicating a likely continuation of this rally. With both indicators providing bullish signals, QEWS’ preferred direction seems to be on the upside, thus reinforcing our bullish technical outlook for the stock. However, QR180.0 must be closely watched for any reversal signs.
  2. 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) 12,375.03 UP UP 12,300.00 12,216.75 12,450.00 12,513.25 Al Rayan Islamic Index (QERI Index) 3,949.44 UP UP 3,900.00 3,877.63 4,000.00 4,030.00 Banks and Financial Services Banks and Masraf Al Rayan (MARK QD) 43.85 UP UP 42.00 40.00 45.00 48.00 Commercial Bank of Qatar (CBQK QD)* 68.30 UP UP 67.50 65.75 70.00 71.90 Doha Bank (DHBK QD) 61.90 UP DOWN 59.23 58.20 63.30 64.50 Qatar Islamic Bank (QIBK QD) 77.00 UP UP 76.00 75.00 77.20 78.00 Qatar International Islamic Bank (QIIK QD)* 78.30 UP UP 77.30 75.80 79.72 81.50 Qatar Insurance (QATI QD) 74.10 UP UP 72.40 71.00 75.00 76.50 Al Khalij Commercial Bank (KCBK QD) 22.65 UP UP 21.80 21.50 23.00 23.30 Consumer Goods and Services Consumer G Medicare Group (MCGS QD) 79.00 UP UP 76.40 75.40 79.00 80.00 Al Meera Consumer Goods Co. (MERS QD) 179.60 UP UP 175.00 164.00 182.00 185.00 Industrials Industries Qatar (IQCD QD) 186.00 UP UP 181.40 178.30 187.50 190.00 Qatar Electricity & Water Co. (QEWS QD)* 182.00 UP UP 180.00 178.20 185.00 190.00 Gulf International Services (GISS QD) 92.80 UP UP 90.00 86.60 93.00 95.00 Qatari Investors Group (QIGD QD) 59.70 UP UP 58.00 56.20 61.30 64.80 Real Estate Barwa Real Estate Co. (BRES QD) 37.70 UP UP 36.80 35.70 38.40 39.20 United Development Co. (UDCD QD)* 22.29 UP UP 22.00 21.69 22.38 22.66 Telecom Ooredoo (ORDS QD) 150.00 UP DOWN 149.00 145.30 151.00 153.80 Vodafone Qatar (VFQS QD) 13.93 UP UP 12.99 12.66 14.00 14.23 Transportat Nakilat (QGTS QD) 21.11 UP DOWN 20.90 20.50 21.15 21.83 Milaha (QNNS QD) 97.00 UP UP 96.50 95.10 98.40 100.10