19 May Daily technical trader


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19 May Daily technical trader

  1. 1. Page 1 of 2 TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER QE Index: Short-Term – Pullback The QE Index extended its losses for the third straight session and dropped around 84 points (-0.64%). The index started the day on a bullish note by reaching an intraday high of 13,129.37, but later declined and penetrated below its interim support near 13,080.0 as the bears took charge over the bulls. The index has its immediate support of the 13,000.0 level. Traders may witness further retracement if this level is taken off and the index may test 12,940.0. Industries Qatar: Short-Term – Pullback IQCD after failing to move above its stiff resistance of QR191.0 eventually penetrated below its support of QR188.50 yesterday. We believe although the stock is trading close to its immediate support of QR186.40 it may not hold onto it and further drift down to test its 21- day moving average. However, if the stock manages to stay above QR186.40 on a closing basis it may proceed ahead. Meanwhile, both the indicators are providing bearish signals indicating correction. Al Rayan Islamic Index: Short-Term – Neutral The QERI Index failed to make any further headway above 4,341.10 and declined shedding around -0.33% to close at 4,318.46. The support is seen near 4,302.0, whereas the index faces its resistance at 4,341.10. We believe the index may continue to oscillate between these levels. Only a decisive breach above or below these levels may decide the next direction of the index; until then it may continue to be range-bound. Both the indicators are providing mixed signals. Qatar Electricity & Water Co.: Short-Term – Pullback QEWS breached its support of QR188.0 and further drifted down yesterday after feigning a failure to move above QR190.0. Moreover, the stock developed a bearish Marubozu candle pattern indicating that QEWS may continue its decline. We believe the stock may not hold onto its immediate support of QR186.0 and further drift down to test the 21-day moving average. The RSI has shown a bearish divergence, while the MACD has crossed into the negative territory. Qatar Insurance: Short-Term – Pullback QATI has been in declining mode since developing a tweezers top candle pattern on Wednesday. The stock is currently sitting exactly at its support of QR77.0. With both the momentum indicators pointing down it seems unlikely that the stock may hold onto its support of QR77.0, which is also in proximity to the 21-day moving average and further decline to test QR76.0. However, if the stock manages to cling onto the QR77.0 level it may halt its pullback. Ooredoo: Short-Term – Downmove ORDS has been moving along the descending trendline since topping the recent rally at QR149.90. Moreover, the stock developed a bearish Marubozu candle pattern indicating a likely continuation of this downmove. We believe although the stock is sitting exactly at its support of QR145.0, it may not hold onto it and move down further to test the 55-day moving average. Meanwhile, the RSI is drifting down further from the mid-line, while the MACD is growing more bearish.
  2. 2. Contacts Saugata Sarkar Keith Whitney Sahbi Kasraoui QNB Financial Services SPC Head of Research Head of Sales Manager - HNWI Contact Center: (+974) 4476 6666 Tel: (+974) 4476 6534 Tel: (+974) 4476 6533 Tel: (+974) 4476 6544 PO Box 24025 saugata.sarkar@qnbfs.com.qa keith.whitney@qnbfs.com.qa sahbi.alkasraoui@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) 13,020.72 UP UP 13,000.00 12,939.80 13,079.52 13,196.00 Al Rayan Islamic Index (QERI Index) 4,318.46 UP UP 4,301.89 4,247.34 4,341.10 4,370.00 Banks and Financial Services Banks and Masraf Al Rayan (MARK QD) 50.50 UP UP 50.40 49.75 51.80 53.00 Commercial Bank of Qatar (CBQK QD) 68.80 DOWN UP 68.40 67.30 69.80 70.70 Doha Bank (DHBK QD) 64.70 DOWN UP 63.90 62.00 65.70 66.40 Qatar Islamic Bank (QIBK QD) 96.00 UP UP 94.80 93.20 96.50 97.20 Qatar International Islamic Bank (QIIK QD) 86.60 FLAT UP 86.10 83.00 87.80 89.00 Qatar Insurance (QATI QD)* 77.00 FLAT UP 77.00 76.00 79.00 81.40 Al Khalij Commercial Bank (KCBK QD) 22.98 DOWN UP 22.90 22.50 23.23 23.49 Consumer Goods and Services Consumer G Medicare Group (MCGS QD) 87.50 UP UP 87.00 86.25 87.80 90.00 Al Meera Consumer Goods Co. (MERS QD) 184.50 DOWN UP 183.00 180.00 185.00 187.80 Industrials Industrials Industries Qatar (IQCD QD)* 186.50 UP UP 186.40 183.00 188.50 191.00 Qatar Electricity & Water Co. (QEWS QD)* 186.50 UP UP 186.00 184.00 188.00 190.00 Gulf International Services (GISS QD) 97.70 UP UP 97.00 96.20 98.00 100.00 Qatari Investors Group (QIGD QD) 66.90 UP UP 64.70 61.30 68.40 70.00 Real Estate Real Estate Barwa Real Estate Co. (BRES QD) 39.00 UP UP 38.40 37.40 39.20 40.35 United Development Co. (UDCD QD) 25.65 UP UP 25.29 24.65 26.00 26.45 Telecom Telecom Ooredoo (ORDS QD)* 145.00 DOWN UP 145.00 143.00 148.00 149.00 Vodafone Qatar (VFQS QD) 18.73 UP UP 17.99 17.30 18.75 19.29 Transportation Transportat Nakilat (QGTS QD) 24.50 FLAT UP 24.20 23.90 25.00 25.55 Milaha (QNNS QD) 96.50 DOWN UP 96.50 94.00 100.10 102.50