TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER
QE Index: Short-Term – Upmove
Al Rayan Islamic Index: Short-Term – Upmove
National Leasing Holding Co.: Short-Term – Breakdown
The QE Index extended its relentless run and moved higher around
63 points (0.55%), tagging another new 52-week. The index
witnessed a gap-down opening, but rebounded from its day’s low of
11,415.38, recording an impressive rally closing at its highest level
since 2008. Bulls continued their domination over the bears for the
sixth consecutive session and pushed the index above 11,500.0.
Further, both indicators support the index for a higher move.
The QERI Index respected the 3,270.24 level and continued its
advance, tagging another new all-time high. We believe the index has
been in uptrend mode and may continue to accelerate further, tagging
new highs. Meanwhile, the RSI is moving strongly in the overbought
territory, while the MACD has crossed the signal line into the positive
territory indicating the strength to continue. However, traders may
need to keep a close watch near 3,285.0 for any reversal signs.
NLCS witnessed a gap-down opening and penetrated below the
important support of QR29.95 along with both the 21-day and 55-day
moving averages for the first time since October. Moreover, volumes
were also large on the breakdown which is a negative signal. In
addition, the RSI has shown a bearish divergence and the MACD is
pointing down indicating the weakness to continue. We believe the
stock may drift down further and test QR29.15, followed by QR28.50.
Qatar Islamic Bank: Short-Term – Upswing
Al Meera Consumer Goods Co.: Short-Term – Breakout
Vodafone Qatar: Short-Term – Breakout
QIBK continued its upward momentum and cleared the QR79.70 and
QR80.20 levels, tagging another new 52-week high. With volumes
also picking up we believe QIBK may continue to proceed ahead
toward QR81.50. Meanwhile, the bullishness in the RSI is intact, while
the RSI is diverging away from the signal line in a bullish manner
indicating that this rally may continue for a longer time. However, any
pullback below the QR80.20 level may result in consolidation.
MERS continued to move higher on Thursday and cleared the
resistance of QR151.50. The stock has been gradually moving up
over the past few days and is showing strength. We believe the stock
may continue its upmove and may march toward its next resistance of
QR153.70. Meanwhile, the RSI is moving strongly in the overbought
territory, while the MACD is widening away from the signal line on the
upside, thus supporting our bullish outlook for the stock.
VFQS after consolidating for a single day on Wednesday resumed its
upmove clearing the QR12.09 and QR12.15 levels, tagging a 52week high on the back of large volumes. We believe the stock may
continue to advance toward QR12.50, followed by QR13.0 until it
holds onto the QR12.15 level. However, any dip below this level may
halt its upmove. Meanwhile, both the momentum indicators are
providing bullish signals indicating the possibility of a short-term 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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