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TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER
QE Index: Short-Term – Downmove
The QE Index dropped for the second straight session and fell
around 211 points (-1.65%). Moreover, the index slipped below
12,700.0 as well as the 12,600.0 levels in a single swoop as the
bears were under complete control over the bulls. Meanwhile, with
both momentum indicators are providing bearish signals, indicating
further weakness, which may pull it lower to test 12,500.0. However,
the bias may become positive if the index closes above 12,600.0.
Industries Qatar: Short-Term – Pullback
IQCD has been in declining mode over the past few days and further
moved below its support of QR178.30 yesterday. Moreover, the stock
developed a bearish Marubozu candle pattern indicating a likely
continuation of this pullback. Further, both the momentum indicators
are suggesting a continuation of this weakness. Thus, traders may
consider selling the stock at the current level for a target of QR175.50
with a strict stop loss of QR178.30.
Al Rayan Islamic Index: Short-Term – Downmove
The QERI Index extended its losses for the second consecutive day
and fell sharply by -2.06% to settle below the 4,200.0 level. Moreover,
the index penetrated below its important supports of 4,248.0 and the
55-day moving average, as sustained selling pressure pulled it lower.
We believe with the RSI and the MACD lines showing a negative
slope, the index is expected to drift down further and test 4,150.0.
However, if the index manages to reclaim 4,222.16 it may rebound.
Doha Bank: Short-Term – Downmove
DHBK continued its decline and penetrated below the important
support of QR59.0 on the back of large volumes. Moreover, the stock
has been experiencing sustained selling pressure over the past few
weeks and is registering losses. Further, with the RSI and the MACD
lines in downtrend mode, the stock is likely to move further down and
test QR57.40, followed by QR56.50. However, if the stock manages
to climb above QR58.50 on a closing basis it may halt its downmove.
Barwa Real Estate Co.: Short-Term – Pullback
BRES drifted lower and dipped below its important supports of the
ascending wedge line at QR40.40 and QR39.70 in a single trading
session. Notably, volumes were also large on the decline which is a
negative sign. We believe although the stock is trading close to its
immediate support of the 55-day moving average, it is unlikely that
BRES may cling onto it and decline further to test QR38.40.
Meanwhile, both the momentum indicators are looking weak.
Al Meera Consumer Goods Co.: Short-Term – Downmove
MERS breached its supports of QR179.0 and QR175.0 in a single
swoop and caved under sustained selling pressure. We believe this
strong breach of supports along with a pick-up in volumes has bearish
implications. Moreover, both the momentum indicators are providing
bearish signals with no trend reversal signs, supporting this bearish
sentiment. Thus, traders could consider selling the stock at the current
level for a target of QR164.0 with a stop loss of QR175.0.
Saugata Sarkar Abdullah Amin, CFA Shahan Keushgerian Sahbi Kasraoui Ahmed Al-Khoudary QNB Financial Services SPC
Head of Research Senior Research Analyst Senior Research Analyst Manager - HNWI Head of Sales Trading – Institutional Contact Center: (+974) 4476 6666
Tel: (+974) 4476 6534 Tel: (+974) 4476 6569 Tel: (+974) 4476 6509 Tel: (+974) 4476 6544 Tel: (+974) 4476 6548 PO Box 24025
firstname.lastname@example.org email@example.com firstname.lastname@example.org email@example.com firstname.lastname@example.org 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
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*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
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.
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) 12,562.54 DOWN DOWN 12,513.65 12,465.50 12,678.84 12,768.18
Al Rayan Islamic Index (QERI Index) 4,195.17 DOWN DOWN 4,148.08 4,100.00 4,222.16 4,247.18
Banks and Financial Services Banks and
Masraf Al Rayan (MARK QD) 51.70 DOWN FLAT 49.75 48.50 52.30 55.00
Commercial Bank of Qatar (CBQK QD) 64.90 DOWN DOWN 64.15 63.60 64.92 65.75
Doha Bank (DHBK QD)* 58.00 DOWN DOWN 57.40 56.50 59.00 60.10
Qatar Islamic Bank (QIBK QD) 94.00 DOWN UP 93.90 90.00 96.00 98.50
Qatar International Islamic Bank (QIIK QD) 81.50 DOWN DOWN 80.70 78.90 83.00 86.10
Qatar Insurance (QATI QD) 77.60 FLAT UP 77.00 76.00 78.00 79.00
Al Khalij Commercial Bank (KCBK QD) 22.12 DOWN DOWN 21.90 21.49 22.50 22.90
Consumer Goods and Services Consumer G
Medicare Group (MCGS QD) 83.20 DOWN DOWN 83.00 81.70 85.00 87.80
Al Meera Consumer Goods Co. (MERS QD)* 171.00 DOWN DOWN 164.00 159.00 175.00 179.00
Industries Qatar (IQCD QD)* 178.10 DOWN DOWN 175.50 173.90 178.30 180.00
Qatar Electricity & Water Co. (QEWS QD) 186.50 DOWN FLAT 185.00 182.00 188.00 190.00
Gulf International Services (GISS QD) 91.00 DOWN FLAT 90.00 86.60 91.40 93.00
Qatari Investors Group (QIGD QD) 59.70 DOWN DOWN 59.70 57.80 61.30 62.40
Real Estate Real Estate
Barwa Real Estate Co. (BRES QD)* 39.20 DOWN UP 38.40 37.40 39.70 40.40
United Development Co. (UDCD QD) 24.49 DOWN DOWN 24.00 23.60 24.75 25.30
Ooredoo (ORDS QD) 143.00 DOWN DOWN 142.50 141.80 145.00 147.40
Vodafone Qatar (VFQS QD) 19.61 DOWN UP 19.29 18.75 20.00 20.79
Nakilat (QGTS QD) 22.90 DOWN DOWN 22.45 21.98 23.00 23.40
Milaha (QNNS QD) 91.50 DOWN DOWN 90.00 88.70 93.00 94.50