TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER
QE Index: Short-Term – Upmove
Al Rayan Islamic Index: Short-Term – Upmove
Qatar Islamic Bank: Short-Term – Upswing
The QE Index continued its uptrend and rose around 38 points
(0.35%), tagging a new 52-week high and eventually surpassed the
resistance of the ascending trendline, indicating a positive
development. We believe the index is in uptrend mode and may
continue to advance targeting the 10,900.0 level. Meanwhile, both the
momentum indicators are moving higher. However, traders may need
to keep a close watch on the 10,850.0 level for any reversal signs.
The QERI Index gained around 0.47% to close the session at
3,181.33. The bulls were in full control and pushed the index closer to
the ascending trendline. We believe the index may continue to
proceed ahead toward the 3,199.21 level until it holds onto 3,151.22.
Meanwhile, the RSI is trending strongly in the overbought territory,
while the MACD is diverging away from the signal line in a bullish
manner indicating a likely advance.
QIBK respected the support of QR74.0 and gained around 1.08%.
The stock is currently at the threshold of its next resistance of
QR75.0. The recent spike in volumes indicates rising buying interest.
We believe with both the momentum indicators pointing higher, QIBK
may be ready for a breakout above QR75.0, targeting the QR75.70
level. However, a retreat below the QR74.0 level on a closing basis
may indicate a bearish signal.
Al Meera Consumer Goods Co.: Short-Term – Breakout
Ooredoo: Short-Term – Breakout
Qatar International Islamic Bank: Short-Term – Upswing
MERS cleared the resistances of QR136.90, QR139.0 and QR140.50
in a single swoop for the first time since May and gained around
4.71% on Thursday. Notably, volumes were also large on the
breakout indicating potential buyers stepping in. We believe this
strong breach of resistances has enough steam to test and surpass
QR142.70, targeting the QR146.0 level as it has little resistance until
then. The RSI and the MACD lines support a further upside.
ORDS breached the resistances of QR141.50 and QR143.0 on the
back of large volumes. Moreover, the stock developed a bullish
Marubozu candle pattern, which usually indicates a likely advance
from the current level. We believe the stock has been gaining strength
since clearing both the moving averages and may continue to move
ahead toward QR145.0. Meanwhile, the RSI is moving strongly in the
overbought territory, while the MACD is rising up.
QIIK continued its bullish momentum and tagged another new 52week high. The stock is relentlessly tagging new 52-week highs over
the past few days and is in uptrend mode. Meanwhile, the RSI is
trending strongly in the overbought territory, while the MACD is
widening further away from the signal line and is rising upward with no
immediate trend reversal signs. In addition, the stock developed a
bullish Marubozu candle pattern indicating continuation of this rally.
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Qatar Exchange Index (QE Index)
Al Rayan Islamic Index (QERI Index)
Masraf Al Rayan (MARK QD)
Commercial Bank of Qatar (CBQK QD)
Doha Bank (DHBK QD)
Qatar Islamic Bank (QIBK QD)*
Qatar International Islamic Bank (QIIK QD)*
Qatar Insurance (QATI QD)
National Leasing Holding Co. (NLCS QD)
Widam Food Co. (WDAM QD)
Al Meera Consumer Goods Co. (MERS)*
Industries Qatar (IQCD QD)
Qatar Electricity & Water Co. (QEWS QD)
Gulf International Services (GISS QD)
Qatari Investors Group (QIGD QD)
Barwa Real Estate Co. (BRES QD)
United Development Co. (UDCD QD)
Ooredoo (ORDS QD)*
Vodafone Qatar (VFQS QD)
Nakilat (QGTS QD)
Milaha (QNNS QD)
Banks and Financial Services
Consumer Goods and Services
*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
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.
Simple Moving Average (SMA): A SMA is the average of the closing price of a security for a given period.
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.
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.
Ahmed M. Shehada
QNB Financial Services SPC
Head of Research
Tel: (+974) 4476 6534
Head of Trading
Tel: (+974) 4476 6535
Head of Sales
Tel: (+974) 4476 6533
Manager - HNWI
Tel: (+974) 4476 6544
Contact Center: (+974) 4476 6666
PO Box 24025
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