TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER
QE Index: Short-Term – Upmove
Al Rayan Islamic Index: Short-Term – Upmove
Vodafone Qatar: Short-Term – Upmove
The QE Index continued its strong rally and moved higher around 50
points (0.42%) closing at its highest level in the last five years. The
index momentarily moved above the 11,900.0 level, but later
retreated due to profit-booking and closed at 11,872.40. The index
has been relentlessly tagging new 52-week highs and is in uptrend
mode. We believe the index may continue its bullish run and advance
toward the 11,900.0-11,915.0 levels until it trades above 11,832.0.
The QERI Index continued its uptrend and eventually surpassed the
3,382.68 level, tagging an all-time high. We believe the index may
continue its upward momentum and tag new highs until it trades
above 3,382.68. However, any dip below 3,382.68 may result in
consolidation and halt its further upmove. Meanwhile, the bullishness
in the RSI is intact in the overbought territory, while the MACD is
widening away from the signal line in a bullish manner.
VFQS managed to move above the QR12.40 level on the back of
large volumes. The stock has been in consolidation mode since
topping the rally near QR12.66 over the past few days. We believe if
the stock manages to hold onto QR12.40 a continued rise toward
QR12.66 seems possible. However, any dip below the QR12.40 level
may drag the stock to test the QR12.15 level. Thus, short-term traders
may accumulate at the current level for a target of QR12.66.
Qatar Electricity & Water Co.: Short-Term – Upmove
Al Meera Consumer Goods Co.: Short-Term – Downmove
Doha Bank: Short-Term – Upmove
QEWS moved higher around 0.94% on the back of relatively higher
volumes. However, the stock faces its next hurdle at QR194.30,
which it needs to surpass in order to gain further momentum. We
believe if the stock manages to move above this level, it may spark
additional buying interest which may push it toward QR196.0.
Meanwhile, both the RSI and the MACD lines are providing bullish
signals, thus supporting our bullish outlook for the stock.
MERS penetrated below the support of QR154.90 after holding on to
this level on Wednesday, which is a negative sign. We believe the
stock may move lower and test QR153.70. Any weakness below this
level may pull the stock further down and test QR151.0. Meanwhile,
the RSI is declining from the overbought territory, while the MACD is
stalling from the rising mode indicating a likely correction. However, if
the stock manages to regain QR154.90 it may attract buyers.
DHBK continued its upmove and tagged another new 52-week high
moving above the QR67.0 and QR67.50 levels. The stock is in
upmove mode and is showing no imminent trend reversal signs.
Moreover, the RSI is showing strength in the overbought territory,
while the MACD is pointing higher indicating continuation of this
upmove. We believe the stock may continue to advance and tag new
52-week high until it trades above the QR67.50 level.
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Qatar Exchange Index (QE Index)
Al Rayan Islamic Index (QERI Index)
Masraf Al Rayan (MARK QD)
Commercial Bank of Qatar (CBQK QD)
Doha Bank (DHBK QD)*
Qatar Islamic Bank (QIBK QD)
Qatar International Islamic Bank (QIIK QD)
Qatar Insurance (QATI QD)
National Leasing Holding Co. (NLCS QD)
Widam Food Co. (WDAM QD)
Al Meera Consumer Goods Co. (MERS)*
Industries Qatar (IQCD QD)
Qatar Electricity & Water Co. (QEWS QD)*
Gulf International Services (GISS QD)
Qatari Investors Group (QIGD QD)
Barwa Real Estate Co. (BRES QD)
United Development Co. (UDCD QD)
Ooredoo (ORDS QD)
Vodafone Qatar (VFQS QD)*
Nakilat (QGTS QD)
Milaha (QNNS QD)
Banks and Financial Services
Consumer Goods and Services
*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
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.
Simple Moving Average (SMA): A SMA is the average of the closing price of a security for a given period.
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.
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.
Ahmed M. Shehada
QNB Financial Services SPC
Head of Research
Tel: (+974) 4476 6534
Head of Trading
Tel: (+974) 4476 6535
Head of Sales
Tel: (+974) 4476 6533
Manager - HNWI
Tel: (+974) 4476 6544
Contact Center: (+974) 4476 6666
PO Box 24025
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