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27 May Daily technical trader


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27 May Daily technical trader

  1. 1. Page 1 of 2 TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER QE Index: Short-Term – Neutral The QE Index continued its exceptional run and gained around 43 points (0.32%) for the third straight session to close at a fresh record high. The index remained volatile throughout the day touching an intraday low of 13,209.20 and simultaneously reached an intraday high of 13,447.17. We believe the index may continue to tag new highs until it trades above 13,350.0. Any retreat below 13,350.0 may result in consolidation. Meanwhile, both indicators look strong. Qatar Electricity & Water Co.: Short-Term – Upmove QEWS surpassed its resistance of QR190.0 and made further headway. Notably, volumes were also large reflecting optimism among traders. We believe the stock may further continue its rally and advance toward QR192.0. Meanwhile, the RSI is stalling while the MACD is about to cross the signal line and enter the bullish territory indicating the possibility of a further rise. However, any pullback below QR190.0 may drag the stock back into the congestion zone. Al Rayan Islamic Index: Short-Term – Neutral The QERI Index extended its rally and moved higher around 0.07%, hitting a fresh new all-time high; however, it trimmed its gains after making an intraday high of 4,468.06. Meanwhile, the index momentarily dipped below 4,400.0, but recouped its losses staging a smart recovery. We believe the index has been in uptrend mode and may continue to record new highs. However, a decline below 4,445.0 may pull the index back to test the 4,400.0 level. Qatar Islamic Bank: Short-Term – Upmove QIBK continued its rally and gained 1% after testing its support at QR96.0 yesterday. The stock is trading well above its strong support of QR99.50 on the daily charts indicating the continuation of the positive momentum. We believe the stock may further advance and test QR102.0. Meanwhile, the RSI is moving strongly in the overbought territory, while the MACD is diverging away from the signal line on the upside signifying upside potential in the stock. Doha Bank: Short-Term – Upmove DHBK cleared the resistance of QR64.80 on the back of large volumes. Moreover, the stock has been gaining strength over the past few days and is advancing. We believe if the stock manages to cling onto QR64.80, which is also in proximity to the 21-day moving average it may set the stage for a further higher move toward QR65.70, followed by QR66.50. However, a dip below QR64.80 may pull the stock. Meanwhile, the RSI is positively poised for an upmove. Ooredoo: Short-Term – Upmove ORDS penetrated above its resistances of QR149.0 and QR151.0 in a single swoop with increased participation. We believe this strong breach of resistances has bullish implications and provides an upside target of QR153.50. Meanwhile, the RSI is moving up in a bullish manner, while the MACD line is indicating that the upward momentum may continue over the near-term. Traders could consider buying the stock at the current level with a stop loss of the QR151.0 level.
  2. 2. Contacts 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 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 *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 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. Name (Ticker) Last Close Trend Support Resistance Short Term Long Term First Second First Second Qatar Exchange Index (QE Index) 13,393.34 UP UP 13,350.54 13,300.00 13,450.00 13,600.00 Al Rayan Islamic Index (QERI Index) 4,448.03 UP UP 4,444.86 4,400.00 4,500.00 4,550.00 Banks and Financial Services Banks and Masraf Al Rayan (MARK QD) 58.60 UP UP 58.00 57.30 59.00 60.00 Commercial Bank of Qatar (CBQK QD) 68.80 UP UP 67.80 66.30 69.80 70.70 Doha Bank (DHBK QD)* 65.20 UP UP 64.80 64.00 65.70 66.50 Qatar Islamic Bank (QIBK QD)* 101.10 UP UP 99.50 96.00 102.00 104.50 Qatar International Islamic Bank (QIIK QD) 86.10 DOWN UP 86.10 83.00 87.80 89.00 Qatar Insurance (QATI QD) 75.50 DOWN UP 74.80 72.50 76.00 77.00 Al Khalij Commercial Bank (KCBK QD) 23.40 UP UP 23.23 22.90 23.49 24.00 Consumer Goods and Services Consumer G Medicare Group (MCGS QD) 86.00 DOWN UP 85.20 83.00 87.80 90.50 Al Meera Consumer Goods Co. (MERS QD) 184.00 DOWN UP 183.00 182.00 187.00 189.00 Industrials Industrials Industries Qatar (IQCD QD) 191.00 UP UP 188.50 186.40 191.00 194.60 Qatar Electricity & Water Co. (QEWS QD)* 190.40 UP UP 190.00 188.00 192.00 196.00 Gulf International Services (GISS QD) 94.40 UP UP 93.00 91.80 95.00 97.00 Qatari Investors Group (QIGD QD) 66.20 DOWN UP 64.80 62.40 68.40 70.00 Real Estate Real Estate Barwa Real Estate Co. (BRES QD) 40.50 UP UP 40.40 39.70 41.40 42.00 United Development Co. (UDCD QD) 26.25 UP UP 26.00 25.29 26.45 27.10 Telecom Telecom Ooredoo (ORDS QD)* 152.00 UP UP 151.00 149.00 153.50 155.20 Vodafone Qatar (VFQS QD) 18.70 UP UP 18.49 17.99 18.75 19.29 Transportation Transportat Nakilat (QGTS QD) 23.48 DOWN UP 23.40 22.45 23.90 24.20 Milaha (QNNS QD) 94.80 DOWN DOWN 93.00 93.00 95.10 96.50