18 August Daily technical trader


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18 August Daily technical trader

  1. 1. Page 1 of 2 TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER QE Index: Short-Term – Neutral The QE Index shed around 89 points (-0.66%) and fell for the second straight session to close below the 13,450.0 level. The index remained in a bearish mode throughout the day, as the bulls failed to strengthen their grip. Meanwhile, the index needs to move above 13,450.0 in order to proceed ahead and keep its positive momentum intact. However, any failure to surpass 13,450.0 may result in a lower move and the index could test the 13,350.0 level. Qatar Electricity & Water Co.: Short-Term – Pullback QEWS witnessed a gap-up opening, but failed to hold onto its gains and reversed, as sellers pushed the stock down. Moreover, the stock dipped below the 21-day and 55-day moving averages as well as the ascending trendline support in a single session. We believe this strong breach of supports has bearish implications and provides a downside target of QR184.0. However, a close above QR185.42 may halt its pullback. Meanwhile, the RSI is looking weak. Al Rayan Islamic Index: Short-Term – Neutral The QERI Index declined by -0.55% and ended the session in red for the second consecutive day. The index failed to make any further headway toward its all-time high and fell to breach its important support of 4,639.0, as traders continued to book profits. Meanwhile, the bears may try to dominate until the index trades below 4,639.0 and pull the index down toward 4,600.0. On the flip side, a close above 4,639.0 may help the index to regain momentum. Commercial Bank of Qatar: Short-Term – Pullback CBQK continued its decline and penetrated below the supports of QR67.30 and the 55-day moving average in a single swoop. It is possible that CBQK may drift down further and test QR66.50. Any sustained weakness below this level may drag the stock toward QR65.75. However, if the stock manages to close above the 55-day moving average, it may provide some relief. Meanwhile, the RSI has shown a negative divergence, while the MACD is growing bearish. Industries Qatar: Short-Term – Bounce Back IQCD has been showing strength since moving above both the moving averages along with the descending trendline. We expect the stock to rebound from the current level and test QR183.10. Any move above this level may spark additional buying interest that may push the stock toward QR184.50. However, traders may need to exercise caution if the stock dips below QR181.40. Meanwhile, the MACD line is diverging away from the signal line in a bullish manner. Nakilat: Short-Term – Pullback QGTS declined further yesterday and penetrated below the important support of its ascending trendline. Moreover, the stock developed a bearish Marubozu candle pattern for a second day, indicating that the weakness may continue. We believe although the stock is trading close to its immediate support of QR24.45, it may not cling onto it and drift down further to test QR24.12, which is also in proximity to the 21- day moving average. Meanwhile, the RSI is pointing down.
  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) 13,416.30 UP UP 13,350.54 13,300.00 13,447.24 13,584.34 Al Rayan Islamic Index (QERI Index) 4,628.81 UP UP 4,600.00 4,584.50 4,638.81 4,686.00 Banks and Financial Services Banks and Masraf Al Rayan (MARK QD) 54.80 FLAT FLAT 54.00 52.60 55.80 57.30 Commercial Bank of Qatar (CBQK QD)* 66.90 DOWN DOWN 67.30 66.50 68.30 69.50 Doha Bank (DHBK QD) 59.20 UP UP 60.00 58.00 61.00 62.00 Qatar Islamic Bank (QIBK QD) 110.50 UP UP 109.50 107.00 111.00 112.50 Qatar International Islamic Bank (QIIK QD) 84.50 DOWN FLAT 83.50 82.80 85.00 86.10 Qatar Insurance (QATI QD) 95.00 UP UP 94.60 92.40 96.00 97.50 Al Khalij Commercial Bank (KCBK QD) 21.75 DOWN DOWN 21.49 21.10 22.00 22.35 Consumer Goods and Services Consumer G Medicare Group (MCGS QD) 124.90 UP UP 121.50 118.20 126.50 128.80 Al Meera Consumer Goods Co. (MERS QD) 194.10 UP UP 192.00 190.00 194.80 198.80 Industrials Industrials Industries Qatar (IQCD QD)* 182.00 UP UP 181.40 180.00 183.10 184.50 Qatar Electricity & Water Co. (QEWS QD)* 185.00 DOWN DOWN 184.00 182.00 186.00 188.00 Gulf International Services (GISS QD) 120.10 UP UP 118.10 115.00 121.00 122.50 Qatari Investors Group (QIGD QD) 59.50 UP UP 57.70 56.20 60.60 61.30 Real Estate Real Estate Barwa Real Estate Co. (BRES QD) 41.40 DOWN UP 41.00 40.20 41.80 42.50 United Development Co. (UDCD QD) 29.90 UP UP 29.90 29.30 30.61 31.93 Telecom Telecom Ooredoo (ORDS QD) 126.80 DOWN DOWN 126.00 123.70 129.70 131.50 Vodafone Qatar (VFQS QD) 21.00 UP UP 20.78 20.00 21.99 22.30 Transportation Transportat Nakilat (QGTS QD)* 24.53 UP UP 24.45 24.12 25.30 25.90 Milaha (QNNS QD) 96.00 UP UP 95.10 93.00 96.50 97.80