6 March Daily technical trader


Published on

Published in: Economy & Finance
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

6 March Daily technical trader

  1. 1. TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER QE Index: Short-Term – Downmove Al Rayan Islamic Index: Short-Term – Downmove Gulf International Services: Short-Term – Breakout The QE Index continued its decline and fell sharply around 242 points (-2.09%) breaching the important supports of the 21-day moving average and the 11,400.0 psychological levels in a single swoop. The index moved higher during the mid-session touching its intraday high of 11,712.54, but caved under heavy selling pressure suffering the largest single day loss in the past six months. Traders are likely to witness further retracement on the back of weak indicators. The QERI Index penetrated below the key supports of the 21-day moving average and 3,329.75 in a single trading session after witnessing a relief rally on Tuesday. The index tagged a new all-time high, but later plunged around 57 points losing -1.68%. This action reveals that there is exhaustion on the part of buyers and the index may continue to witness sustained selling pressure. Meanwhile, both momentum indicators are exhibiting bearish signals. GISS cleared the important resistance of QR88.00 and made further headway on the back of large volumes. Both momentum indicators are indicating that the stock may continue its advance. Hence, it appears that the current higher push has enough steam to test and surpass its resistance at QR91.80, targeting the QR94.0 level. The interim support is at QR88.0; a drop below this level indicates that GISS may move down to test the QR85.80 level. Qatar Islamic Bank: Short-Term – Downmove National Leasing Holding Co.: Short-Term – Downmove Vodafone Qatar: Short-Term – Downmove QIBK penetrated below the supports of the 55-day moving average and QR74.10 in a single swoop. Moreover, the stock has been sliding down over the past few days along the descending trendline. Although the stock is trading close to the QR72.80 level, it is unlikely that the stock may hold onto this support targeting the QR70.50 level. In addition, the recent spike in volumes is indicating further weakness in the stock. Further, both indicators are in downtrend mode. NLCS has been registering losses over the past few trading sessions and continued its decline moving below the QR28.50 level. The significant support area is near the QR27.52 level, where a prior February 2011 low could provide some relief. However, a dip below this level may trigger additional selling pressure toward QR27.0. Meanwhile, both momentum indicators are trending weak, indicating mounting selling pressure. VFQS dipped below the support of the 21-day moving average and continued its slide yesterday. Notably, volumes were also large on the declines indicating further weakness. The prognosis on this time frame implies a further downside with the RSI crossing the mid-line in a bearish manner, while the MACD is providing a negative convergence. On the downside VFQS may test QR11.44 which is also in proximity to the 55-day moving average. Page 1 of 2
  2. 2. Name (Ticker) Last Close Trend Short Term Support Long Term First Resistance Second First Second Qatar Exchange Index (QE Index) 11,346.58 DOWN UP 11,300.00 11,171.00 11,400.00 11,484.55 Al Rayan Islamic Index (QERI Index) 3,307.72 DOWN UP 3,300.00 3,275.00 3,329.75 3,3350.00 Masraf Al Rayan (MARK QD) 37.20 DOWN UP 36.55 35.10 38.00 39.10 Commercial Bank of Qatar (CBQK QD) 75.20 UP UP 74.70 74.00 76.00 77.00 Doha Bank (DHBK QD) 59.40 DOWN DOWN 58.20 57.40 60.00 62.00 Qatar Islamic Bank (QIBK QD)* 73.00 DOWN DOWN 72.80 70.50 74.10 75.00 Qatar International Islamic Bank (QIIK QD) 73.50 UP UP 73.30 72.80 75.30 76.20 Qatar Insurance (QATI QD) 63.50 DOWN UP 62.56 60.00 64.00 66.90 National Leasing Holding Co. (NLCS QD)* 28.20 DOWN DOWN 27.52 27.00 28.50 29.15 Widam Food Co. (WDAM QD) 40.30 DOWN DOWN 38.70 37.30 41.90 42.30 Al Meera Consumer Goods Co. (MERS) 151.00 FLAT UP 148.90 147.00 151.50 153.70 Industries Qatar (IQCD QD) 193.00 UP UP 190.00 185.64 195.00 197.70 Qatar Electricity & Water Co. (QEWS QD) 166.30 DOWN FLAT 165.36 164.00 170.91 172.00 Gulf International Services (GISS QD)* 90.00 UP UP 88.00 85.80 91.80 94.00 Qatari Investors Group (QIGD QD) 40.55 DOWN DOWN 39.50 36.00 41.00 43.45 Barwa Real Estate Co. (BRES QD) 31.30 DOWN DOWN 30.85 30.10 32.00 32.85 United Development Co. (UDCD QD) 21.06 DOWN DOWN 21.00 20.50 21.70 22.00 Ooredoo (ORDS QD) 136.40 DOWN DOWN 136.00 133.90 138.50 139.90 Vodafone Qatar (VFQS QD)* 11.80 DOWN FLAT 11.60 11.44 12.09 12.40 Nakilat (QGTS QD) 21.40 DOWN UP 20.90 20.50 21.83 22.19 Milaha (QNNS QD) 92.50 DOWN UP 91.30 90.00 93.00 95.10 Banks and Financial Services Banks and Consumer Goods and Services Consumer G Industrials Real Estate Telecom Transportat *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 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. Contacts Saugata Sarkar Ahmed M. Shehada Keith Whitney Sahbi Kasraoui QNB Financial Services SPC Head of Research Tel: (+974) 4476 6534 saugata.sarkar@qnbfs.com.qa Head of Trading Tel: (+974) 4476 6535 ahmed.shehada@qnbfs.com.qa Head of Sales Tel: (+974) 4476 6533 keith.whitney@qnbfs.com.qa Manager - HNWI Tel: (+974) 4476 6544 sahbi.alkasraoui@qnbfs.com.qa Contact Center: (+974) 4476 6666 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