25 February Daily technical trader


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25 February Daily technical trader

  1. 1. TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER QE Index: Short-Term – Upmove Al Rayan Islamic Index: Short-Term – Neutral National Leasing Holding Co.: Short-Term – Breakout The QE Index continued its strong uptrend and rose around 15 points (0.12%) to close at 11,900.38. Moreover, the index closed above the 11,900.0 psychological level for the first time since 2008. However, the index faces its immediate resistance at the 11,915.72 level which it needs to surpass in order to proceed toward the 12,000.0 mark. Any failure to move above this level may lead to sideways movement. Meanwhile, both the indicators are looking strong. The QERI Index snapped the three day winning streak and declined marginally around 2 points (-0.05%) to close at 3,391.42. We believe until the time the index trades above the 3,382.68 level the uptrend may remain intact and a further rise seems possible. However, a close below this level may result in bearish implications. Meanwhile, both the momentum indicators are providing mixed signals, thus supporting our neutral outlook for the index. NLCS surged 5.17% and cleared the resistances of QR29.95 as well as both the 21-day and 55-day moving averages in a single swoop. This strong breach of resistances has bullish implications. Moreover, the recent price action and spike in volumes indicate that NLCS may be ready for a move above QR30.60 targeting QR31.45. However, a dip below the 55-day moving average on a closing basis may indicate a false breakout. Meanwhile, the RSI has shown a bullish divergence. Milaha: Short-Term – Breakdown Widam Food Co.: Short-Term – Breakdown Gulf International Services: Short-Term – Breakout QNNS breached the supports of QR96.50 & QR95.10 and moved lower on the back of large volumes. Moreover, the stock has been witnessing a steady decline over the past few days since developing a Tweezer top candle pattern near QR100.10. With the RSI and the MACD lines pointing lower QNNS’ preferred direction seems to be on the downside. The nearest support is seen at the QR93.0 level, with a decline below it may test the 21-day moving average. WDAM witnessed a gap-down opening and continued its decline penetrating below its support of QR45.50 & QR44.65 in a single trading session. Moreover, the stock has been falling aggressively over the past two days on the back of large volumes which is a negative sign. Hence, we expect the stock to decline further and test the QR41.90 level. Meanwhile, the RSI and the MACD lines are in downtrend mode with no immediate trend reversal signs. GISS surpassed the resistances of QR84.60 & QR85.50 and tagged a new all-time high yesterday. Notably, volumes were also high on the breakout indicating rising buying interest. Moreover, the stock developed a bullish Marubozu candle pattern indicating that GISS may continue its advance tagging new highs. Meanwhile, the RSI has shown a positive divergence and moved into the overbought territory indicating the possibility of a further rise. 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) 11,900.38 UP UP 11,832.00 11,754.45 11,915.72 12,000.00 Al Rayan Islamic Index (QERI Index) 3,391.42 UP UP 3,382.68 3,350.00 3,400.30 3,430.00 Masraf Al Rayan (MARK QD) 39.05 UP UP 38.00 36.55 40.00 41.00 Commercial Bank of Qatar (CBQK QD) 75.40 UP UP 74.50 74.00 76.00 77.00 Doha Bank (DHBK QD) 67.00 UP UP 67.00 66.50 68.50 69.30 Qatar Islamic Bank (QIBK QD) 81.00 UP UP 80.20 79.40 82.20 83.00 Qatar International Islamic Bank (QIIK QD) 74.30 UP UP 74.00 73.30 75.50 76.25 Qatar Insurance (QATI QD) 63.20 DOWN UP 62.56 60.96 64.00 66.80 National Leasing Holding Co. (NLCS QD)* 30.50 UP UP 29.95 29.15 30.60 31.45 Widam Food Co. (WDAM QD)* 43.60 DOWN DOWN 41.90 40.45 44.50 48.10 Al Meera Consumer Goods Co. (MERS) 153.00 UP UP 151.00 148.90 153.70 154.90 Industries Qatar (IQCD QD) 196.90 UP UP 195.00 192.40 197.70 199.00 Qatar Electricity & Water Co. (QEWS QD) 194.00 UP UP 192.00 190.00 198.00 200.00 Gulf International Services (GISS QD)* 88.00 UP UP 85.80 84.60 90.00 92.00 Qatari Investors Group (QIGD QD) 42.90 DOWN DOWN 41.00 39.50 43.45 44.50 Barwa Real Estate Co. (BRES QD) 32.70 UP UP 32.00 31.60 32.85 33.50 United Development Co. (UDCD QD) 22.55 DOWN DOWN 22.38 22.00 22.84 23.10 Ooredoo (ORDS QD) 151.90 UP UP 149.00 148.25 153.00 155.00 Vodafone Qatar (VFQS QD) 12.33 UP UP 12.15 12.09 12.80 13.00 Nakilat (QGTS QD) 22.35 UP UP 22.00 21.83 22.50 22.80 Milaha (QNNS QD)* 95.00 UP UP 93.00 91.30 95.10 96.50 Banks and Financial Services Banks and Consumer Goods and Services Consumer G Industrials Real Estate Telecom 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