26 February Daily technical trader


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26 February 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 – Downmove Industries Qatar: Short-Term – Breakout The QE Index snapped its four-day winning streak and fell around 44 points (-0.37%), moving below the support of the ascending trendline on the back of profit-booking. The index failed to clear the important resistance of 11,915.72 and retreated as sellers pushed the price lower. However, traders may need to watch out for support near 11,827.0 as a dip below this level may test 11,754.45. Conversely, the index needs to move above the trendline in order to test 11,900.0. The QERI Index declined for the second consecutive day and breached the important support of 3,382.68, which is a negative signal. We believe the bears may continue to dominate the bulls until the index trades below 3,382.68 and drag it toward the 3,350.0 level. However, the index needs to reclaim 3,382.68 in order to keep its upmove intact. Meanwhile, the RSI is declining from the overbought territory, while the MACD is stalling from the rising mode. IQCD cleared the resistance of the ascending triangle at QR197.70 and tagged a new 52-week high. Notably, volumes were also large on the breakout indicating that potential buyers are stepping in. Moreover, the stock has been steadily moving higher and gaining strength over the past few days. We believe based on the current higher push and recent price action, the stock may continue to rise and tag new 52-week highs. Both indicators are looking strong. Widam Food Co. : Short-Term – Breakdown Vodafone Qatar: Short-Term – Downmove Gulf International Services: Short-Term – Pullback WDAM breached the support of QR43.45 and continued its downtrend yesterday. The stock has been witnessing selling pressure over the past few days and is moving down. Moreover, with the RSI and MACD lines in downtrend mode, the immediate direction for the stock seems to be on the downside. We believe the stock is trending weak, and may continue to drift lower to test QR41.90. However, a close above QR43.45 may halt its downmove. VFQS dipped below the support of QR12.40 on Monday and continued its downmove yesterday. Moreover, the stock has been in declining mode since topping the rally near QR12.66 and is steadily moving down. We believe the weakness in the stock may continue and pull it further down to test QR12.09. If the stock declines below this level, VFQS may witness additional selling pressure and test the QR11.89 level. Meanwhile, both indicators are moving down. GISS witnessed a gap-up opening and tagged a new all-time high of QR94.0, but reversed and closed near its day’s open. Moreover, GISS developed a shooting star candle pattern, which usually signifies exhaustion on the part of the buyers and often leads to trend reversal which was bullish until now. We believe GISS may drift down and test its immediate support of QR85.80 before its next upmove. However, a close above the QR90.0 level may keep its uptrend intact. 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) 11,855.94 UP UP 11,826.60 11,754.45 11,915.72 12,000.00 Al Rayan Islamic Index (QERI Index) 3,378.17 UP UP 3,350.00 3,329.75 3,382.68 3,400.30 Masraf Al Rayan (MARK QD) 38.95 UP UP 38.00 36.55 40.00 41.00 Commercial Bank of Qatar (CBQK QD) 75.30 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) 76.00 DOWN UP 76.00 75.00 77.00 78.30 Qatar International Islamic Bank (QIIK QD) 73.50 UP UP 73.30 72.80 74.00 74.40 Qatar Insurance (QATI QD) 64.70 UP FLAT 64.00 62.56 65.68 66.80 National Leasing Holding Co. (NLCS QD) 29.45 DOWN DOWN 29.15 28.50 29.95 30.60 Widam Food Co. (WDAM QD)* 42.90 DOWN DOWN 41.90 40.45 43.45 44.50 Al Meera Consumer Goods Co. (MERS) 152.00 UP UP 151.00 148.90 153.70 154.90 Industries Qatar (IQCD QD)* 198.10 UP UP 197.70 195.00 199.00 200.00 Qatar Electricity & Water Co. (QEWS QD) 194.00 UP UP 192.00 190.00 198.00 200.00 Gulf International Services (GISS QD)* 89.00 UP UP 85.80 84.60 90.00 92.00 Qatari Investors Group (QIGD QD) 41.65 DOWN DOWN 41.00 39.50 43.45 44.20 Barwa Real Estate Co. (BRES QD) 32.60 UP UP 32.00 31.60 32.85 33.50 United Development Co. (UDCD QD) 22.87 UP FLAT 22.38 22.00 22.84 23.10 Ooredoo (ORDS QD) 152.00 UP UP 151.00 149.00 153.50 155.00 Vodafone Qatar (VFQS QD)* 12.19 UP UP 12.09 11.89 12.66 12.80 Nakilat (QGTS QD) 21.85 UP UP 21.83 21.44 22.00 22.19 Milaha (QNNS QD) 94.50 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