7 July Daily technical trader


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7 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 fell for the second straight session and shed around 43 points (-0.35%) to settle below the 12,350.0 level. The index has been repeatedly failing to hold on to its gains above 12,400.0 since the past few days on the back of profit-booking. Meanwhile, the index has its next support near the 12,300.0 level. This level if breached on a closing basis may pull the index to test 12,220.0. However, if the index manages to stay above 12,300.0 it may attempt a rebound. Vodafone Qatar: Short-Term – Pullback VFQS developed a shooting star candlestick pattern on Thursday and further declined yesterday confirming this trend reversal pattern which was bullish until now. Meanwhile, the stock is sitting exactly on its immediate support of QR17.70. Traders could consider selling the stock if it trades below QR17.70 for a target of QR16.89 with a stop loss of QR18.0. Further, both the momentum indicators are providing bearish signals indicating a likely correction from the current level. Al Rayan Islamic Index: Short-Term – Neutral The QERI index gained marginally around 0.05% to close at 4,111.93. The index momentarily moved below the 4,100.0 level but bounced back as buyers stepped in and quickly offset the weakness. Meanwhile, the index faces its resistance at 4,148.0 whereas intermediate support is seen at 4,100.0. Only a move above or below these levels on a closing basis may decide the next direction of the index, until then it may continue to oscillate. Gulf International Services: Short-Term – Upmove GISS built on its gains and advanced 1.23% yesterday. Moreover, the stock cleared its important resistance of QR98.0 on the back of large volumes indicating rising optimism among traders. We believe the stock may continue its bullish momentum and may proceed ahead to test QR100.0. Further, the RSI is in buy zone, while the MACD is diverging away from the signal line in a bullish manner. However, any retreat below the QR98.0 level may result in a pullback. Al Khalij Commercial Bank: Short-Term – Upmove KCBK advanced further and gained around 1.80% yesterday. Moreover, the stock surpassed its resistances of the 21-day moving average and QR22.0 in a single trading session which is a positive signal. We believe this strong breach of resistances has bullish implications and provides an upside target of QR22.35. However, a dip below QR22.0 may halt its upmove. Meanwhile, both the momentum indicators look strong with no immediate reversal signs. Qatar Electricity & Water Co.: Short-Term – Pullback QEWS failed to make any further headway above QR186.0 and reversed penetrating below the 21-day moving average and QR182.0 levels in a single swoop. Moreover, the stock developed a bearish Marubozu candle pattern indicating a likely continuation of this pullback. Further, the negative slop on the RSI is indicating weakness. We believe the stock may continue to drift lower and test QR178.90. However, a move above QR182.0 may attract buyers.
  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) 12,333.54 DOWN DOWN 12,300.00 12,216.75 12,375.03 12,465.50 Al Rayan Islamic Index (QERI Index) 4,111.93 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) 50.00 DOWN DOWN 49.75 48.50 51.00 52.60 Commercial Bank of Qatar (CBQK QD) 65.40 UP 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) 92.30 FLAT FLAT 90.70 90.00 93.90 95.10 Qatar International Islamic Bank (QIIK QD) 82.80 UP DOWN 81.70 80.70 83.00 86.58 Qatar Insurance (QATI QD) 81.00 UP UP 80.00 79.00 81.00 81.40 Al Khalij Commercial Bank (KCBK QD)* 22.10 UP DOWN 21.87 21.49 22.35 22.99 Consumer Goods and Services Consumer G Medicare Group (MCGS QD) 83.20 UP DOWN 81.90 79.00 83.40 86.00 Al Meera Consumer Goods Co. (MERS QD) 174.20 UP DOWN 173.89 164.00 179.00 180.00 Industrials Industrials Industries Qatar (IQCD QD) 174.00 DOWN DOWN 173.90 171.00 174.90 180.10 Qatar Electricity & Water Co. (QEWS QD)* 180.00 DOWN DOWN 178.90 176.27 182.00 185.20 Gulf International Services (GISS QD)* 98.40 UP UP 98.00 97.00 100.00 101.50 Qatari Investors Group (QIGD QD) 56.00 DOWN DOWN 54.40 50.00 56.10 57.00 Real Estate Real Estate Barwa Real Estate Co. (BRES QD) 38.80 DOWN DOWN 38.40 38.05 40.10 41.00 United Development Co. (UDCD QD) 24.55 FLAT DOWN 24.00 23.42 24.75 25.30 Telecom Telecom Ooredoo (ORDS QD) 128.00 DOWN DOWN 125.80 124.37 128.00 130.00 Vodafone Qatar (VFQS QD)* 17.70 DOWN DOWN 17.70 16.89 18.75 19.29 Transportation Transportat Nakilat (QGTS QD) 21.90 DOWN DOWN 21.80 21.45 22.19 22.45 Milaha (QNNS QD) 94.40 UP FLAT 93.10 92.00 95.10 96.50