17 June Daily technical trader


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17 June Daily technical trader

  1. 1. Page 1 of 2 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.
  2. 2. Contacts 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 saugata.sarkar@qnbfs.com.qa abdullah.amin@qnbfs.com.qa shahan.keushgerian@qnbfs.com.qa sahbi.alkasraoui@qnbfs.com.qa ahmed.alkhoudary@qnbfs.com.qa 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 *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 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. 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 Industrials Industrials 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 Telecom Telecom 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 Transportation Transportat 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