TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER
QE Index: Short-Term – Upmove
Al Rayan Islamic Index: Short-Term – Neutral
Masraf Al Rayan: Short-Term – Upswing
The QE Index continued its strong rally for the fifth consecutive
session and rose around 91 points (0.80%), tagging another new 52week high. Moreover, the index surpassed the 11,400.0-11,450.0
levels for the first time since 2008 in a single swoop. In addition, the
index developed a bullish Marubozu candle pattern indicating the
possibility of a further rise toward the 11,480.0-11,500.0 levels.
Meanwhile, the RSI is looking strong in the overbought territory.
The QERI Index continued its bullish run and tagged another new alltime high of 3,284.77. However, the index was not able to hold onto
its gains and reversed to close at 3,274.30. This action reveals that
the index is in need of consolidation as buyers backed away from
higher prices. We believe the index may drift lower near the 3,270.24
level before its next upmove. However, the index could continue to
advance and tag new highs, if it clings on to the 3,270.24 level.
MARK extended its upmove and tagged another all-time high.
Moreover, the stock has been registering strong gains over the past
few days and is accelerating on the upside. Further, the RSI and the
MACD lines are in uptrend mode and are showing no immediate
trend reversal signs indicating continued strength in the stock. We
believe MARK may continue to move higher and tag new highs.
However, any dip below the QR39.0 level may halt its upmove.
Qatar Islamic Bank: Short-Term – Upswing
Al Meera Consumer Goods Co.: Short-Term – Breakout
Nakilat: Short-Term – Breakout
QIBK continued to move higher yesterday tagging another new 52week high. The stock has been gaining strength over the past few
days and is in bullish mode. Meanwhile, with the RSI moving strongly
in the overbought territory, and the MACD diverging away from the
signal line in a bullish manner, indicating QIBK’s preferred direction to
be on the upside. We believe the stock may continue to rise toward
QR79.70, followed by the QR80.20 level.
MERS breached the important resistance of QR149.0 after
consolidating below this level for the past few days, which is a positive
signal. With volumes also picking up at this level, it appears potential
buyers are stepping in. We believe the current higher push has
enough steam to test and surpass its next resistance of QR151.50,
targeting QR153.68. Both the RSI and the MACD lines are providing
bullish signals indicating the possibility of a short-term rally.
QGTS surpassed the key resistances of the QR21.07, QR21.44 and
QR21.60 levels in a single trading session and tagged a 52-week
high. We believe this strong breach of resistances and a recent spike
in volumes have bullish implications. Moreover, QGTS developed a
long bullish Marubozu candle pattern indicating a likely higher move
toward QR22.0. Meanwhile, the RSI has shown a bullish divergence,
while the MACD has crossed the signal line into the positive territory.
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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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