22 June Daily technical trader


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22 June Daily technical trader

  1. 1. Page 1 of 2 TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER QE Index: Short-Term – Down The QE Index opened strong on Thursday, but fell sharply in the second half of the day to close at 12,453.76, down 1.09%. The index closed near the lowest point of the day, indicating further weakness. Both technical indicators are in line with this view. However, the index held on to its support level of 12,450, below which, the next strong support is not seen before 12,250. On the flip side, investors should turn cautious if the index moves above the 12,600 resistance level. Qatar Insurance: Short-Term – Upmove QATI jumped 4.03% on Thursday to close at QR80.0. The stock formed a bullish Marubozu pattern, suggesting further strength in the stock. The stock will witness resistance at the QR81.40 level (the high level touched in May). The MACD has crossed over the signal line into the positive side, which is a bullish signal, while the RSI is also trending higher. On the downside, investors should turn cautious if the stock moves below its 55-day moving average (currently at QR76.45). Qatar Al Rayan Islamic Index: Short-Term – Neutral The QERI index also closed near its intra-day low on Thursday, suggesting that the index may fall further from its current levels. The QERI index has a support at 4,148, whereas the next support is seen at 4,100 level. Both the RSI and the MACD are trending lower, indicating weakness in the QERI Index. On the upside, a close above the resistance level of 4,250 would indicate strength, and may point toward a reversal from the current short-term downtrend. Qatar International Islamic Bank: Short-Term – Downmove QIIK slipped further on Thursday, after it formed a bearish engulfing pattern on Wednesday. However, the stock held onto its support level of QR78.9, and recovered from the day’s lows to close at QR80.0. The stock continues to look weak with both the RSI and the MACD trending lower. The 21-day moving average is also about to cross below the 55-day moving average, which is a negative sign. A move below the support level of QR78.90 can take the stock to QR75.50. Masraf Al Rayan: Short-Term – Downtrend MARK broke its support level of QR51.80 on Thursday, and fell 1.92% to close at QR51.20. The stock is just above its 55-day moving average (currently at QR51.05). If the stock slips below this, it can fall toward QR49.75 and then QR48.50. The MACD is diverging from the signal line on the downside, while the RSI is also trending lower, indicating weakness in the stock. However, investors should turn cautious if the stock moves back above the QR51.80 level. Doha Bank: Short-Term – Downmove DHBK formed a bearish engulfing pattern on Thursday, creating a long red candlestick on the charts, and closing at QR58.50, near the day’s low. Both the MACD and the RSI are moving lower, indicating continued weakness in the stock. The first support level for the stock is at QR57.90, and then at QR57.50. On the upside, the stock will need to close above the QR61.0 level to indicate a reversal in its current short-term downtrend.
  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) 12,453.76 DOWN DOWN 12,513.65 12,465.50 12,678.84 12,768.18 Al Rayan Islamic Index (QERI Index) 4,170.72 DOWN DOWN 4,148.08 4,100.00 4,231.77 4,247.18 Banks and Financial Services Banks and Masraf Al Rayan (MARK QD)* 51.20 DOWN UP 49.75 48.50 52.30 55.00 Commercial Bank of Qatar (CBQK QD) 65.50 DOWN DOWN 64.15 63.60 65.75 66.30 Doha Bank (DHBK QD)* 58.50 DOWN DOWN 57.40 56.50 61.0 62.50 Qatar Islamic Bank (QIBK QD) 91.60 DOWN UP 91.50 90.00 93.90 96.00 Qatar International Islamic Bank (QIIK QD)* 80.00 DOWN DOWN 78.90 78.30 80.70 83.00 Qatar Insurance (QATI QD)* 80.00 DOWN UP 76.00 74.10 81.40 85.00 Al Khalij Commercial Bank (KCBK QD) 21.60 FLAT DOWN 21.49 21.00 22.01 22.50 Consumer G Medicare Group (MCGS QD) 83.80 DOWN DOWN 83.00 81.70 85.00 87.80 Al Meera Consumer Goods Co. (MERS QD) 168.90 DOWN DOWN 164.00 159.00 171.00 175.00 Industrials Industries Qatar (IQCD QD) 177.20 DOWN DOWN 175.50 172.60 180.00 181.40 Qatar Electricity & Water Co. (QEWS QD) 183.50 FLAT DOWN 182.00 180.00 188.00 192.0 Gulf International Services (GISS QD) 94.10 FLAT FLAT 90.00 86.60 95.00 98.00 Qatari Investors Group (QIGD QD) 61.00 DOWN DOWN 59.70 57.80 61.30 62.40 Real Estate Barwa Real Estate Co. (BRES QD) 38.70 DOWN UP 38.40 37.40 39.20 39.70 United Development Co. (UDCD QD) 24.79 DOWN DOWN 24.50 24.00 25.30 25.65 Telecom Ooredoo (ORDS QD) 130.00 DOWN DOWN 130.0 125.10 137.50 139.00 Vodafone Qatar (VFQS QD) 19.60 DOWN UP 19.29 18.75 20.00 20.79 Transportat Nakilat (QGTS QD) 23.00 DOWN DOWN 23.00 22.45 23.40 23.90 Milaha (QNNS QD) 91.10 DOWN DOWN 90.00 88.70 91.30 93.00