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TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER
QE Index: Short-Term – Down
The QE Index continues to witness heavy selling pressure, falling
1.81% on Wednesday to close at 12,100.93. The index broke its
support of 12,215, and closed marginally above the next support of
12,100. The index closed near the lowest point of the day, suggesting
there is sustained weakness in the short-term. The RSI and the
MACD continue to indicate a bearish view. The 12,000 level provides
a psychological support, below which index can fall to 11,916.
Vodafone Qatar: Short-Term – Breakdown
After testing its support level at QR19.29 several times over the past
few days, VFQS finally fell and closed at QR18.86. The stock formed
a Marubozu candlestick pattern, suggesting that the stock may fall
further from the current level. The stock is likely to test its 55-day
moving average (at QR18.47), below which its next strong support is
seen at QR17.70. However, investors should exercise caution if the
stock moves back to close above its resistance of QR19.29.
QE Al Rayan Islamic Index: Short-Term – Down
The QERI index fell 1.3% to close at 4,046.54. The index is likely to
test its psychological support level of 4,000 in the coming days. The
MACD is diverging from the signal line on the downside, while the RSI
has moved into the oversold zone. Both the technical indicators
suggest that the index may continue its downtrend in the short-term.
Below 4,000, the index may fall toward 3,974. On the upside, a move
above the 21-day moving average may indicate a trend reversal.
Ooredoo: Short-Term – Downmove
After a couple of days of recovery, ORDS has resumed its downtrend,
falling 3.57% on Wednesday. A move below the QR129.50 can take
the stock to QR125.8. The RSI is close to the oversold zone, while
the MACD is diverging toward the negative side. The 21-day moving
average has also crossed below the 55-day moving average, which is
a clear bearish sign. ORDS will have to close above both the 21-day
and 55-day moving averages to indicate a trend reversal.
Al Khalij Commercial Bank: Short-Term – Downmove
KCBK has been witnessing strong selling pressure for nine
consecutive trading sessions. The stock fell 2.38% to close at its intra-
day low of QR20.50, indicating further weakness in the stock. KCBK
is likely to test its support level of QR20.17, below which it can fall to
QR20.0. The MACD is diverging from the signal line on the downside,
while the RSI is deep in the oversold zone. However, a short-term
bounce back cannot be ruled out after such a sharp drop.
Al Meera Consumer Goods Co.: Short-Term – Upmove
MERS gained on Wednesday, closing 1.42% higher, at QR171.0.
The stock breached above its resistance level of QR175.0 during
intra-day, but pulled back to close the day below it. The RSI has
recovered from the oversold zone, while the MACD has converged
with the signal line. The stock is likely to trend higher and test its
resistance of QR175.0. Above this, the next resistance level is seen at
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
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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
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*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
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.
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) 12,100.93 DOWN DOWN 12,100.00 11,916.92 12,215.00 12,513.65
Al Rayan Islamic Index (QERI Index) 4,046.54 DOWN DOWN 4,000.00 3,974.62 4,148.00 4,231.77
Banks and Financial Services Banks and
Masraf Al Rayan (MARK QD) 50.40 DOWN UP 48.50 47.40 51.80 52.30
Commercial Bank of Qatar (CBQK QD) 65.70 FLAT DOWN 64.15 63.60 66.30 67.20
Doha Bank (DHBK QD) 56.30 DOWN DOWN 56.10 55.00 56.90 57.90
Qatar Islamic Bank (QIBK QD) 85.20 DOWN UP 83.50 81.70 93.90 96.00
Qatar International Islamic Bank (QIIK QD) 77.00 DOWN DOWN 75.50 74.40 80.70 83.00
Qatar Insurance (QATI QD) 79.60 FLAT UP 76.00 74.10 81.40 84.40
Al Khalij Commercial Bank (KCBK QD)* 20.50 DOWN DOWN 20.17 20.00 21.00 22.01
Medicare Group (MCGS QD) 81.20 DOWN DOWN 79.00 78.10 85.00 87.80
Al Meera Consumer Goods Co. (MERS QD)* 171.00 FLAT DOWN 164.00 159.00 175.00 179.00
Industries Qatar (IQCD QD) 170.00 DOWN DOWN 170.00 165.00 180.00 182.50
Qatar Electricity & Water Co. (QEWS QD) 180.00 FLAT DOWN 178.64 177.10 188.00 192.0
Gulf International Services (GISS QD) 95.10 FLAT FLAT 90.00 86.60 98.00 101.70
Qatari Investors Group (QIGD QD) 58.30 DOWN DOWN 57.70 57.00 61.30 62.40
Barwa Real Estate Co. (BRES QD) 38.20 DOWN UP 38.05 37.60 39.20 39.70
United Development Co. (UDCD QD) 23.98 DOWN DOWN 23.42 23.09 24.75 25.30
Ooredoo (ORDS QD)* 129.70 DOWN DOWN 128.00 125.80 137.50 139.00
Vodafone Qatar (VFQS QD)* 18.86 DOWN UP 18.75 17.70 19.29 20.00
Nakilat (QGTS QD) 22.07 DOWN DOWN 22.00 21.80 23.40 23.90
Milaha (QNNS QD) 90.30 DOWN DOWN 90.00 88.70 93.00 94.30