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11 May Daily technical trader


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11 May 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 witnessing two consecutive days of profit- booking, moved higher around 66 points to close at a day’s high of 12,961.40. The index remained in a bullish mode and breached its important resistance near 12,940.0, which is a positive development. We believe the index may extend its gains and proceed toward its all- time high, if it manages to hold onto 12,940.0. However, a retreat below this level may pull the index back into the congestion zone. Masraf Al Rayan: Short-Term – Upmove MARK cleared the resistance of QR48.50 as well as the descending trendline, after consolidating below it over the past few days. Moreover, the stock developed a bullish Marubozu candle pattern, indicating a likely continuation of this upmove. We believe the stock may rally further to test QR49.75 based on the recent price action and a spike in volumes. However, a dip below QR48.50 may result in a pullback. Meanwhile, the RSI is moving up in a bullish manner. Al Rayan Islamic Index: Short-Term – Neutral The QERI Index gained around 0.22% after correcting for two straight days to settle at 4,281.97. However, the index needs to move above the 4,302.0 level in order to gain further momentum and rally toward its all-time high of 4,317.91. We believe until the index trades below 4,302.0, it may continue to be range-bound and trade in a narrow range of 4,250.0 on the downside and 4,302.0 on the upside. Meanwhile, the indicators are providing mixed signals. Qatar Electricity & Water Co.: Short-Term – Upmove QEWS surpassed the resistances of QR184.0 and the 21-day moving average in a single swoop on the back of large volumes, indicating rising buying interest. We believe the current higher push has enough steam to test and surpass its immediate resistance of QR186.0, targeting the QR188.0 level. However, a retreat below QR184.0 may drag the stock to test its 21-day moving average. Meanwhile, the RSI is supporting this bullish sentiment by moving in an upward direction. Gulf International Services: Short-Term – Upmove GISS finally managed to move above the key resistance of QR90.0 and the 21-day moving average, after witnessing a sideways movement over the past few days. Notably, volumes were also high, indicating that potential buyers are stepping in. The stock faces its next resistance at QR93.0. If the stock manages to move above this level, it may trigger a fresh buying interest. Meanwhile, the RSI is moving up and has enough room before getting overbought. Barwa Real Estate Co.: Short-Term – Pullback BRES continued to drift lower and breached its support of the 21-day moving average on Thursday. Further, volumes were also large on the decline, which is a negative sign. We believe the stock may not cling onto its immediate support of QR37.40 and continue its decline to test QR36.80. However, if the stock manages to remain above QR37.40, it may halt its pullback. Meanwhile, both the indicators look weak, indicating that the stock may further move down.
  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 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) 12,961.40 UP UP 12,939.80 12,854.20 13,000.00 13,070.00 Al Rayan Islamic Index (QERI Index) 4,281.97 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)* 48.90 UP UP 48.50 47.00 49.75 51.50 Commercial Bank of Qatar (CBQK QD) 68.50 DOWN UP 68.40 67.30 69.80 70.70 Doha Bank (DHBK QD) 64.90 UP UP 63.90 62.00 65.70 66.40 Qatar Islamic Bank (QIBK QD) 87.70 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) 75.50 DOWN UP 74.80 72.50 76.00 77.00 Al Khalij Commercial Bank (KCBK QD) 23.08 FLAT UP 22.90 22.49 23.49 24.00 Consumer Goods and Services Consumer G Medicare Group (MCGS QD) 88.90 UP UP 87.80 87.00 90.00 92.00 Al Meera Consumer Goods Co. (MERS QD) 188.10 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)* 185.40 UP UP 184.00 180.00 186.00 188.00 Gulf International Services (GISS QD)* 92.00 UP UP 90.00 86.60 93.00 95.50 Qatari Investors Group (QIGD QD) 69.60 UP UP 68.40 64.70 71.70 74.00 Real Estate Barwa Real Estate Co. (BRES QD)* 37.50 DOWN UP 37.40 36.80 38.40 39.20 United Development Co. (UDCD QD) 25.85 UP UP 25.29 24.70 26.00 26.50 Telecom Ooredoo (ORDS QD) 147.90 UP UP 145.00 143.00 148.00 149.00 Vodafone Qatar (VFQS QD) 18.30 UP UP 17.99 17.30 18.75 19.29 Transportat Nakilat (QGTS QD) 24.60 UP UP 24.20 23.90 25.00 25.90 Milaha (QNNS QD) 96.90 DOWN UP 96.50 95.10 98.30 100.10