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5 June Daily technical trader


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5 June 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 to move southward for the third straight session and fell around 79 points (-0.59%). The index started the day on a positive note and touched 13,249.31. However sustained selling pressure at a higher level pulled the index below its important supports of 13,196.0 and the 21-day moving average. Meanwhile, the RSI is stalling while the MACD line is moving down. Conversely, the index may attempt a rebound if it reclaims 13,169.41. Ooredoo: Short-Term – Pullback ORDS continued its decline and dipped below the supports of QR153.50 and QR151.0 in a single trading session yesterday. Meanwhile, the stock failed to make any further headway above QR157.80 and has been drifting lower over the past two days. Moreover, ORDS developed a red Marubozu candle pattern indicating a likely continuation of this pullback. Traders could consider selling the stock for a target of QR149.33 with a stop loss of QR151.0. Al Rayan Islamic Index: Short-Term – Neutral The QERI Index extended its losses for the fourth consecutive day and shed around -0.59% to settle at 4,418.46. The index failed to cling onto the 4,440.0 level and subsequently witnessed selling pressure as the bears were under complete control over the bulls. We believe the index may continue to witness further weakness if it fails to move above 4,440.0. However, a close above 4,440.0 may attract buyers. Meanwhile, both indicators are providing mixed signals. Al Khalij Commercial Bank : Short-Term – Bounce Back KCBK witnessed a gap-up opening and breached its resistances of QR23.23 and the 21-day moving average in a single swoop. We believe if the stock manages to cling onto the 21-day moving average on a closing basis, it could advance toward QR23.49. However, a dip below the 21-day moving average may result in a pullback. Meanwhile, the RSI is showing signs of recovery and is moving up toward the mid-line, thus supporting this bullish sentiment. Masraf Al Rayan: Short-Term – Rebound MARK respected its support of QR57.30 and developed a Doji candle pattern yesterday. This pattern usually indicates a trend reversal which was bearish until now. We believe MARK may bounce back from the current level and move ahead. Meanwhile, both the RSI and the MACD lines are stalling from the declining mode, which is a positive sign. Thus, traders could consider buying the stock at the current level for a target of QR59.90 with a stop loss of QR57.90. Qatar Electricity & Water Co.: Short-Term – Pullback QEWS has been in declining mode over the past few days and further drifted lower yesterday. Moreover, the stock developed a bearish Marubozu candle pattern indicating a likely continuation of this pullback. Further, both indicators look weak. We believe although the stock is trading close to its immediate support of the 21-day moving average it may not cling onto it and decline further to test QR188.0. However, if the stock holds onto QR189.35 it may advance.
  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) 13,142.69 UP UP 13,100.00 13,019.60 13,195.88 13,350.54 Al Rayan Islamic Index (QERI Index) 4,418.46 UP UP 4,400.00 4,341.10 4,444.86 4,500.00 Banks and Financial Services Banks and Masraf Al Rayan (MARK QD)* 58.50 UP UP 57.30 56.00 59.90 61.00 Commercial Bank of Qatar (CBQK QD) 66.80 DOWN DOWN 65.75 64.92 67.30 68.40 Doha Bank (DHBK QD) 61.00 DOWN DOWN 61.00 59.75 62.00 63.00 Qatar Islamic Bank (QIBK QD) 97.50 UP UP 96.00 93.90 98.50 100.00 Qatar International Islamic Bank (QIIK QD) 85.40 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)* 23.19 UP UP 23.23 22.90 23.49 24.00 Consumer Goods and Services Consumer G Medicare Group (MCGS QD) 84.70 DOWN UP 83.00 81.70 85.00 87.80 Al Meera Consumer Goods Co. (MERS QD) 182.00 DOWN UP 180.00 175.00 183.00 185.00 Industrials Industrials Industries Qatar (IQCD QD) 183.60 DOWN DOWN 182.50 180.00 185.00 186.40 Qatar Electricity & Water Co. (QEWS QD)* 189.60 FLAT UP 188.00 186.00 192.00 196.00 Gulf International Services (GISS QD) 91.00 DOWN FLAT 90.00 86.60 93.00 95.00 Qatari Investors Group (QIGD QD) 64.00 DOWN FLAT 62.40 61.30 66.50 68.40 Real Estate Real Estate Barwa Real Estate Co. (BRES QD) 41.80 UP UP 41.40 41.00 42.00 43.50 United Development Co. (UDCD QD) 26.25 FLAT UP 26.00 25.29 26.45 27.35 Telecom Telecom Ooredoo (ORDS QD)* 150.30 UP UP 149.00 147.40 151.00 153.50 Vodafone Qatar (VFQS QD) 20.55 UP UP 20.00 19.29 20.79 21.00 Transportation Transportat Nakilat (QGTS QD) 23.80 FLAT UP 23.40 22.45 24.20 24.61 Milaha (QNNS QD) 93.50 DOWN DOWN 93.10 87.30 95.10 96.50