4 June Daily technical trader


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4 June Daily technical trader

  1. 1. Page 1 of 2 TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER QE Index: Short-Term – Pullback The QE Index continued its bearish spell for the second straight session and fell sharply around 330 points (-2.43%). The index witnessed heavy selling pressure as soon as it slipped below 13,500.0 as the bears took complete control over the bulls. However, the index recovered from its intraday low of 13,104.21 to close at 13,221.29. Meanwhile, the bulls would ideally want to see a pause near 13,196.0, but a dip below it may result in a further decline. Qatar Electricity & Water Co.: Short-Term – Pullback QEWS penetrated below its important supports of QR196.0 and QR192.0 along with the ascending trendline in a single trading session. Moreover, the stock developed a bearish candlestick formation indicating a likely continuation of this pullback. Further, both momentum indicators have shown a negative divergence. Thus, traders could consider selling this stock at the current level for a target price of QR188.0 with a stop loss at the QR192.0 level. Al Rayan Islamic Index: Short-Term – Pullback The QERI Index continued its southward journey for the third consecutive day and plunged -2.08% to settle below 4,450.0. The index after touching its intraday high of 4,551.16 reversed and dipped below the support near 4,530.0, caving under heavy selling pressure. However, the index rebounded from its day’s low of 4,396.44 as buying interest helped to trim its losses. Meanwhile, the index needs to hold 4,440.0 to keep its uptrend intact or else it may further retreat. Vodafone Qatar: Short-Term – Pullback VFQS declined yesterday after developing a Tweezer top formation on Monday. The stock is currently trading close to its immediate support of QR20.79. Traders may consider selling this stock if it trades below QR20.79 targetting QR20.0. However, if the stock manages to cling onto QR20.79 on a closing basis it may attempt an advance. Meanwhile, the RSI is retreating further from the overbought territory, thus supporting this bearish sentiment. Qatar Islamic Bank: Short-Term – Pullback QIBK dipped below its supports of QR102.0, QR100.0 and QR98.50 in a single swoop on the back of large volumes, which is a negative sign. Moreover, the stock has been experiencing selling pressure since topping the rally at QR115.0 over the past two days. With the RSI and the MACD lines pointing lower, it seems the stock may further drift down and test its immediate support of QR96.0, which is also in proximity to the 21-day moving average. Industries Qatar: Short-Term – Pullback IQCD continued its decline and further breached the support of the 21-day moving average on the back of increased volumes. Moreover, the stock has been moving along the descending trendline over the past few days and is struggling to move above it. We believe although the stock is trading close to its immediate support of QR186.40, it may not cling onto it and drift down further to test QR185.0. However, if IQCD manages to hold onto QR186.40 it may halt its pullback.
  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 saugata.sarkar@qnbfs.com.qa abdullah.amin@qnbfs.com.qa shahan.keushgerian@qnbfs.com.qa sahbi.alkasraoui@qnbfs.com.qa ahmed.alkhoudary@qnbfs.com.qa 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) 13,221.29 UP UP 13,195.88 13,100.00 13,350.54 13,447.17 Al Rayan Islamic Index (QERI Index) 4,444.48 UP UP 4,400.00 4,341.10 4,500.00 4,528.58 Banks and Financial Services Banks and Masraf Al Rayan (MARK QD) 59.40 UP UP 57.30 56.00 59.90 61.00 Commercial Bank of Qatar (CBQK QD) 67.00 DOWN DOWN 65.75 64.92 67.30 68.40 Doha Bank (DHBK QD) 61.70 DOWN DOWN 61.00 59.75 62.00 63.00 Qatar Islamic Bank (QIBK QD)* 97.00 UP UP 96.00 93.90 98.50 100.00 Qatar International Islamic Bank (QIIK QD) 84.90 DOWN UP 83.00 80.70 86.10 87.80 Qatar Insurance (QATI QD) 77.00 UP UP 76.00 74.80 78.00 79.00 Al Khalij Commercial Bank (KCBK QD) 23.10 DOWN UP 22.90 22.50 23.23 23.49 Consumer Goods and Services Consumer G Medicare Group (MCGS QD) 85.00 DOWN UP 85.00 83.00 87.80 90.50 Al Meera Consumer Goods Co. (MERS QD) 183.50 DOWN UP 183.00 182.00 185.00 187.50 Industrials Industrials Industries Qatar (IQCD QD)* 186.50 DOWN FLAT 186.40 185.00 188.50 191.00 Qatar Electricity & Water Co. (QEWS QD)* 191.90 UP UP 188.00 186.00 192.00 196.00 Gulf International Services (GISS QD) 92.00 DOWN UP 90.00 86.60 93.00 95.00 Qatari Investors Group (QIGD QD) 64.00 DOWN UP 62.40 61.30 66.50 68.40 Real Estate Real Estate Barwa Real Estate Co. (BRES QD) 42.00 UP UP 42.00 41.40 44.50 46.00 United Development Co. (UDCD QD) 26.30 FLAT UP 26.00 25.29 26.45 27.35 Telecom Telecom Ooredoo (ORDS QD) 154.00 UP UP 153.50 151.00 155.20 157.30 Vodafone Qatar (VFQS QD)* 20.89 UP UP 20.79 20.00 21.00 21.50 Transportation Transportat Nakilat (QGTS QD) 23.70 DOWN UP 23.40 22.45 24.20 24.61 Milaha (QNNS QD) 94.00 DOWN DOWN 93.10 87.30 95.10 96.50