TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER
QE Index: Short-Term – Neutral
Al Rayan Islamic Index: Short-Term – Downmove
Qatar Insurance: Short-Term – Breakout
The QE Index declined for the second consecutive day and fell by
around 16 points (-0.14%) to close at 11,839.46. However, the index
respected the support near 11,827.0 and managed to recoup majority
of its losses. We believe if the index trades above 11,827.0 the
uptrend may remain intact and a rise toward 11,900.0 seems
possible. However, a retreat below 11,827.0 may trigger selling
pressure, which may pull the index to test the 11,754.45 level.
The QERI Index continued its decline and moved down around (0.13%) to close the session at 3,373.92. The index witnessed a gapdown opening, but quickly recovered as buyers stepped in and offset
the weakness. However, the index needs to climb above 3,382.68 in
order to proceed toward the 3,400.0 level. We believe the bears may
continue to dominate the bulls till the time the index trades below
3,382.68 and drag it toward the 3,350.0 level.
QATI surged 4.33% and surpassed the key resistances of QR65.68
and QR66.90 after two failed attempts, tagging a new 52-week high.
Moreover, the stock developed a bullish Marubozu candle pattern
indicating the possibility of a further advance. We believe based on
the current higher push the stock may continue to advance and tag
new 52-week highs. However, a decline below QR66.90 may result in
a false breakout. Meanwhile, the RSI has shown a bullish divergence.
Qatar International Islamic Bank: Short-Term – Breakout
Ooredoo: Short-Term – Breakdown
Nakilat: Short-Term – Breakdown
QIIK cleared the resistance of QR74.40 after consolidating below this
level over the past few days, which is a positive signal. Moreover, the
stock developed a bullish engulfing candle pattern which usually
indicates a higher move. However, the stock faces its immediate
resistance at QR75.30. If the stock manages to move above this level
it may spark additional buying interest and push it toward QR76.20.
Meanwhile, both the indicators are pointing up.
ORDS penetrated below the support of QR151.0 on the back of
increased volumes. The stock has been registering lower lows on the
charts since encountering resistance at the QR159.0 level. With the
RSI moving down, and the MACD crossing the signal line into the
negative territory, the stock’s preferred direction seems to be on the
downside and may test the 21-day moving average. However, a close
above the QR151.0 level may attract buying interest.
QGTS dipped below the important support of QR21.83 yesterday.
The stock’s performance has been weak on the charts since topping
the rally at QR22.48. The recent price action is indicating that traders
may witness a sustained decline toward QR21.44, which is also in
proximity to the 21-day moving average. Meanwhile, the RSI is
looking weak and the MACD is about to converge the signal line in a
bearish manner, thus supporting our negative technical outlook.
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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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