20 January Daily technical trader


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20 January Daily technical trader

  1. 1. TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER QE Index: Short-Term – Neutral Al Rayan Islamic Index: Short-Term – Neutral National Leasing Holding Co.: Short-Term – Downmove The QE Index snapped a thirteen-session winning streak and declined around 13 points (-0.12%) to close at 11,093.01. The index tagged a new 52-week high of 11,171.33, but later declined in the day as there was exhaustion on the part of buyers. This action revealed that the index may consolidate or decline after witnessing a strong rally. The index has intermediate support near 11,060.0. Conversely, if the index reclaims 11,100.0, it may resume its uptrend. The QERI Index gained around 0.07% to close the session at 3,228.86. We believe the index is currently in consolidation mode. The support is seen near 3,200.0, while the resistance exists near 3,240.37. Only a move above or below these levels may decide the index’s next direction, until then it may continue to oscillate between these levels. Meanwhile, both indicators are stalling, indicating indecision, thus supporting our neutral outlook. NLCS continued its decline yesterday after penetrating below both the moving averages on Thursday. Notably, volumes were also large on the lower move indicating rising selling pressure. We believe although the stock is trading close to its key support of QR29.95, it may not hold onto it and drift lower to test QR29.15. Meanwhile, the RSI is turning more bearish, while the MACD is about to cross the signal line into the negative territory suggesting extension of this downmove. Barwa Real Estate Co.: Short-Term – Breakout Vodafone Qatar: Short-Term – Breakout United Development Co.: Short-Term – Breakout BRES cleared the key resistance of QR31.60 and managed to close above it which is a positive sign. Notably, volumes were also large on the breakout indicating potential buyers stepping in. We believe the stock is showing strength over the past few days and may continue to move higher targeting QR32.10. Moreover, the bullish RSI and the rising MACD lines provide BRES an upward bias. However, a dip below QR31.60 may drag the stock back into the congestion zone. VFQS surpassed the resistances of QR11.44 and the descending trendline, which had restricted its bullish move in the past on the back of large volumes. We believe if VFQS can manage to cling onto the QR11.44 level, a continued rise toward QR11.60 appears possible. However, a retreat below QR11.44 may result in a false breakout. Meanwhile, the RSI is moving up in a bullish manner, while the MACD has crossed the signal line into the positive territory. UDCD breached the important resistance of QR23.50 for the first time since December. With volumes also picking up at these levels, the stock is expected to witness rising buying interest. We believe the current higher push has enough steam to proceed toward QR23.94. Moreover, the RSI and the MACD lines are providing bullish signals indicating strength in the upmove. However, if the stock declines below QR23.50 it may result in a pullback and may test QR23.15. Page 1 of 2
  2. 2. Name (Ticker) Last Close Trend Short Term Support Long Term First Resistance Second First Second Qatar Exchange Index (QE Index) 11,093.01 UP UP 11,060.00 11,000.00 11,170.00 11,250.00 Al Rayan Islamic Index (QERI Index) 3,228.86 UP UP 3,199.21 3,151.22 3,240.37 3,300.00 Masraf Al Rayan (MARK QD) 35.15 UP UP 35.00 34.15 36.00 37.25 Commercial Bank of Qatar (CBQK QD) 75.10 UP UP 74.50 73.30 75.30 76.00 Doha Bank (DHBK QD) 64.50 UP UP 63.90 63.30 64.50 66.00 Qatar Islamic Bank (QIBK QD) 73.60 UP UP 73.00 72.30 75.00 75.70 Qatar International Islamic Bank (QIIK QD) 69.00 UP UP 68.00 66.20 69.40 71.20 Qatar Insurance (QATI QD) 76.20 UP UP 75.50 74.30 76.90 78.50 National Leasing Holding Co. (NLCS QD)* 30.00 DOWN DOWN 29.95 29.15 30.25 30.60 Widam Food Co. (WDAM QD) 52.00 DOWN UP 51.90 51.00 53.00 54.00 Al Meera Consumer Goods Co. (MERS) 141.90 UP UP 140.50 139.50 142.70 144.00 Industries Qatar (IQCD QD) 178.80 UP UP 178.30 177.50 180.00 181.50 Qatar Electricity & Water Co. (QEWS QD) 180.60 UP UP 180.00 178.90 181.60 184.00 Gulf International Services (GISS QD) 70.10 UP UP 70.00 69.00 72.00 73.15 Qatari Investors Group (QIGD QD) 47.35 DOWN UP 46.00 44.20 47.70 49.50 Barwa Real Estate Co. (BRES QD)* 31.95 UP UP 31.20 30.85 32.10 32.60 United Development Co. (UDCD QD)* 23.57 UP UP 23.50 23.15 23.94 24.24 Ooredoo (ORDS QD) 144.30 UP UP 143.00 141.50 145.00 145.90 Vodafone Qatar (VFQS QD)* 11.45 UP UP 11.44 11.19 11.60 12.09 Nakilat (QGTS QD) 21.10 UP UP 20.60 20.00 21.32 21.44 Milaha (QNNS QD) 90.60 UP UP 90.00 89.40 91.30 93.00 Banks and Financial Services Banks and Consumer Goods and Services Consumer G Industrials Industrials Real Estate Real Estate Telecom Telecom Transportation Transportat *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 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. Contacts Saugata Sarkar Ahmed M. Shehada Keith Whitney Sahbi Kasraoui QNB Financial Services SPC Head of Research Tel: (+974) 4476 6534 saugata.sarkar@qnbfs.com.qa Head of Trading Tel: (+974) 4476 6535 ahmed.shehada@qnbfs.com.qa Head of Sales Tel: (+974) 4476 6533 keith.whitney@qnbfs.com.qa Manager - HNWI Tel: (+974) 4476 6544 sahbi.alkasraoui@qnbfs.com.qa Contact Center: (+974) 4476 6666 PO Box 24025 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