6 July Daily technical trader


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6 July 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 declined marginally around 8 points (-0.06%) to close at 12,376.62. The index after reaching an intraday high of 12,469.52 reversed and moved below the 12,400.0 mark as traders opted to book profits. However, the index witnessed a sharp recovery near the 12,270.0 level as buyers stepped in to offset the weakness. Meanwhile, the index needs to clear 12,400.0 and sustain it in order to proceed higher, or else it may have a range-bound movement. Masraf Al Rayan: Short-Term – Pullback MARK failed to make any further headway above the 21-day moving average and retreated below its support of QR51.0. Moreover, the stock formed a Doji candlestick pattern on Wednesday and declined on Thursday, confirming this reversal pattern, which was bullish until now. Further, the RSI has shown a negative divergence, indicating weakness. Thus, traders could consider selling the stock at the current level for a target of QR49.75 with a stop loss of QR51.0. Al Rayan Islamic Index: Short-Term – Neutral The QERI index shed around 10 points to settle at 4,109.0 on the back of profit-booking. The index momentarily moved above the 4,150.0 level, but failed to cling on to its gains and reversed as the bears took charge. Meanwhile, the index has a support near the 4,100.0 level. We believe until the index stays above 4,100.0, the upmove remains intact and the index may once again test 4,150.0. However, any retreat below 4,100.0 may drag the index. Gulf International Services: Short-Term – Upmove GISS moved above the resistance of QR95.0 on Wednesday and further advanced around 1.25% on Thursday, which is a positive sign. We believe the stock has been gaining strength over the past few days and may continue its bullish momentum to test QR98.0. Any move above QR98.0 may spark additional buying interest, which may push the stock toward QR100.0. However, a dip below QR96.50 may halt its upmove. Meanwhile, both the indicators look strong. Al Khalij Commercial Bank: Short-Term – Bounce Back KCBK continued its rebound and gained 0.65% on Thursday. Moreover, the stock developed a bullish candlestick formation on the daily charts, indicating sustained upmove. Further, the RSI is moving up in a bullish manner toward the mid-line, while the MACD has crossed the signal line into the positive territory. We believe until KCBK stays above QR21.49, it may continue its positive momentum and may surpass the 21-day moving average targeting QR21.87. Barwa Real Estate Co.: Short-Term – Pullback BRES momentarily managed to cross above both the moving averages, but reversed and moved down. This action revealed exhaustion on the part of buyers. Meanwhile, the stock is currently sitting exactly on its immediate support of QR39.20. Traders could consider selling the stock if it trades below QR39.20 for a target of QR38.40 with a stop loss of QR39.37. Further, a negative slope on the RSI is indicating a likely correction from the current 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 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) 12,376.62 DOWN DOWN 12,375.03 12,216.75 12,465.50 12,513.50 Al Rayan Islamic Index (QERI Index) 4,109.77 DOWN DOWN 4,100.00 4,065.50 4,148.08 4,211.12 Banks and Financial Services Banks and Masraf Al Rayan (MARK QD)* 50.30 DOWN DOWN 49.75 48.50 51.00 52.60 Commercial Bank of Qatar (CBQK QD) 65.00 FLAT DOWN 64.92 63.67 65.75 66.30 Doha Bank (DHBK QD) 57.00 DOWN DOWN 56.50 55.80 57.40 58.10 Qatar Islamic Bank (QIBK QD) 92.00 FLAT DOWN 90.70 90.00 93.90 95.10 Qatar International Islamic Bank (QIIK QD) 82.40 UP DOWN 81.70 80.70 83.00 86.58 Qatar Insurance (QATI QD) 80.30 UP UP 80.00 79.00 81.00 81.40 Al Khalij Commercial Bank (KCBK QD)* 21.71 FLAT DOWN 21.49 20.88 21.87 22.00 Consumer Goods and Services Consumer G Medicare Group (MCGS QD) 83.00 UP UP 81.90 79.00 83.40 86.00 Al Meera Consumer Goods Co. (MERS QD) 175.00 UP DOWN 173.89 164.00 179.00 180.00 Industrials Industrials Industries Qatar (IQCD QD) 174.60 DOWN DOWN 173.90 171.00 175.50 178.30 Qatar Electricity & Water Co. (QEWS QD) 184.50 UP UP 184.00 182.00 186.00 188.00 Gulf International Services (GISS QD)* 97.20 UP UP 96.50 95.00 98.00 100.00 Qatari Investors Group (QIGD QD) 55.40 DOWN DOWN 54.40 50.00 56.10 57.00 Real Estate Real Estate Barwa Real Estate Co. (BRES QD)* 39.20 DOWN DOWN 39.20 38.40 40.10 41.00 United Development Co. (UDCD QD) 24.50 FLAT DOWN 24.00 23.42 24.75 25.30 Telecom Telecom Ooredoo (ORDS QD) 127.20 DOWN DOWN 125.80 124.37 128.00 130.00 Vodafone Qatar (VFQS QD) 17.98 DOWN DOWN 17.70 16.89 18.75 19.29 Transportation Transportat Nakilat (QGTS QD) 22.29 DOWN DOWN 22.19 21.80 22.45 23.60 Milaha (QNNS QD) 93.00 UP DOWN 93.00 91.30 94.50 96.00