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15 January Daily technical trader


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15 January Daily technical trader

  1. 1. TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER QE Index: Short-Term – Upmove Al Rayan Islamic Index: Short-Term – Neutral Qatar Islamic Bank: Short-Term – Downmove The QE Index extended its bull run for the twelfth straight session, tagging another new 52-week high. The index is currently in uptrend mode and showing no immediate trend reversal signs. Moreover, the RSI and the MACD lines look strong for a further upside. We believe the index may continue to scale higher toward the 11,100.0 level as bulls may continue to dominate the bears. However, traders may need to keep a close watch on 11,000.0 for any reversal. The QERI Index tagged another new all-time high of 3,240.57, but reversed later in the day. This action revealed that the index may consolidate as there was exhaustion on the part of buyers. The index has immediate support near 3,200.0. We believe the upmove in the index may remain intact until it trades above this level. However, a dip below 3,200.0 may result in bearish implications. Meanwhile, the RSI is pointing down indicating a likely correction before its next upmove. QIBK penetrated below the support of QR75.0 and caved into selling pressure. The stock after topping the rally at QR77.0 reversed on Monday and drifted further down yesterday, thus confirming its downmove. QIBK is currently sitting right at its support at QR74.0. We believe the stock may not hold onto QR74.0 and move further down to test QR72.30 as it has little support until then. Meanwhile, the RSI has shown bearish divergence indicating a likely downmove. Al Meera Consumer Goods Co.: Short-Term – Downmove Industries Qatar: Short-Term – Breakout Gulf International Services: Short-Term – Breakout MERS moved lower yesterday with the most recent rally experiencing resistance near QR146.0. Moreover, the RSI is heading down, while the MACD is stalling from the above, suggesting MERS may drift lower to test its immediate support at QR142.70. If the stock dips below this level, more selling pressure is likely to develop and may pull it further down to test QR140.50. However, if the stock manages to move above QR144.0, it may attract buying interest. IQCD cleared the resistance of QR175.10 and tagged a 52-week high yesterday. Notably, volumes were also large on the breakout indicating potential buyers stepping in. We believe based on the momentum of the current higher move, IQCD is poised to tag new 52week highs. Moreover, the stock has support for a further higher move from both momentum indicators, which are rising up, thus supporting our bullish outlook for the stock. GISS breached the key resistance of QR68.80 and gained around 3.20%, tagging an all time high. Moreover, the stock moved above QR68.80 after consolidating below it over the past few days, which is a positive sign. With volumes also picking up on the breakout, it seems GISS may continue to tag new highs. Meanwhile, the RSI is moving strongly in the overbought territory, while the MACD is turning more bullish suggesting a further rally. Page 1 of 2
  2. 2. Name (Ticker) Last Close Trend Short Term Support Long Term First Resistance Second First Second Qatar Exchange Index (QE Index) 11,051.48 UP UP 11,000.00 10,950.00 11,100.00 11,170.00 Al Rayan Islamic Index (QERI Index) 3,218.47 UP UP 3,199.21 3,151.22 3,250.00 3,300.00 Masraf Al Rayan (MARK QD) 34.80 UP UP 34.15 33.50 35.00 36.00 Commercial Bank of Qatar (CBQK QD) 74.10 UP UP 73.30 72.80 74.50 75.00 Doha Bank (DHBK QD) 63.50 UP UP 63.30 62.00 63.90 64.50 Qatar Islamic Bank (QIBK QD)* 74.00 UP UP 74.00 72.30 75.00 75.70 Qatar International Islamic Bank (QIIK QD) 68.70 UP UP 68.00 67.25 70.00 70.75 Qatar Insurance (QATI QD) 71.20 UP UP 71.00 70.00 72.50 73.15 National Leasing Holding Co. (NLCS QD) 30.75 UP FLAT 30.60 30.00 31.45 31.80 Widam Food Co. (WDAM QD) 53.10 DOWN UP 53.00 51.90 54.00 54.70 Al Meera Consumer Goods Co. (MERS)* 143.00 UP UP 142.70 140.50 144.00 145.00 Industries Qatar (IQCD QD)* 178.00 UP UP 177.00 175.10 180.00 181.50 Qatar Electricity & Water Co. (QEWS QD) 182.60 UP UP 181.60 180.00 184.00 185.00 Gulf International Services (GISS QD)* 71.00 UP UP 70.00 69.00 72.00 73.15 Qatari Investors Group (QIGD QD) 50.80 UP UP 49.50 47.70 52.40 56.20 Barwa Real Estate Co. (BRES QD) 31.00 UP UP 30.85 30.50 31.20 31.90 United Development Co. (UDCD QD) 23.10 UP UP 22.85 22.50 23.35 23.50 Ooredoo (ORDS QD) 141.80 UP UP 141.50 139.90 143.00 145.00 Vodafone Qatar (VFQS QD) 11.19 UP UP 11.19 11.00 11.44 11.60 Nakilat (QGTS QD) 20.86 UP UP 20.35 20.00 21.07 21.32 Milaha (QNNS QD) 91.40 UP UP 91.30 90.00 93.00 94.00 Banks and Financial Services Banks and Consumer Goods and Services Consumer G Industrials Industrials Real Estate Real Estate Telecom Telecom Transportation Transportat *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 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. Contacts Saugata Sarkar Ahmed M. Shehada Keith Whitney Sahbi Kasraoui 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 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