8 January Daily technical trader


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8 January Daily technical trader

  1. 1. TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER QE Index: Short-Term – Neutral Al Rayan Islamic Index: Short-Term – Neutral Qatar Islamic Bank: Short-Term – Breakout The QE Index continued its rally and rose around 14 points (0.13%) tagging another new 52-week high. However, the index reversed from its day’s high of 10,867.57 as there was exhaustion on the part of buyers. This action reveals that the index may consolidate or decline before its next upmove. Traders may need to keep a close watch on 10,748.19 for support. Conversely, the index needs to move above the ascending trendline for continuation of the rally. The QERI Index failed to clear the ascending trendline resistance and witnessed a decline around (-0.51%) after a good run over the past few days. Meanwhile, the index developed a bearish engulfing candle pattern, which is a negative signal. The index is currently trading close to its immediate support of 3,151.22. Any dip below this level may further drag the index and test 3,123.0. However, if the index clings on to 3,151.22, it could proceed ahead. QIBK breached the resistances of QR72.30 and QR74.0 for the first time since January 2013 in a single swoop. Notably, volumes were also large on the breakout. We believe this strong breach of resistances has bullish implications and provides an upside target of QR75.0. In addition, QIBK has support for a further higher move from the RSI and the MACD lines, which are in uptrend mode. However, any dip below the QR74.0 level may indicate a false breakout. Doha Bank: Short-Term – Breakout Qatar Electricity & Water Co.: Short-Term – Pullback Barwa Real Estate Co.: Short-Term – Pullback DHBK surpassed the resistances of QR61.95 and the ascending trendline around QR62.30, tagging a 52-week high yesterday. The stock has been gaining strength over the past few days and may continue to advance tagging a new 52-week high. Moreover, the RSI is trending strongly in the overbought territory, while the MACD is widening away from the signal line in a bullish manner, thus supporting our positive technical outlook for the stock. QEWS penetrated below the support of QR180.0 and developed a bearish Marubozu candle pattern, which usually indicates a likely correction from the current level. The stock has been consolidating near QR180.0 over the past few days and eventually moved lower. We believe the stock may decline and test QR177.20 as it has little support until then. Meanwhile, the RSI is heading down. However, a close above QR180.0 may attract buyers. BRES failed to make any further headway above QR31.60 and dipped below the support of QR31.20 yesterday. Moreover, the stock developed a bearish engulfing candle pattern indicating that the stock may further drift down. Although the stock is trading close to its immediate support of QR30.85, we believe it may not hold on to it and move lower to test the 21-day moving average (currently at QR30.52). The RSI has shown a bearish divergence indicating weakness. 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) 10,798.69 UP UP 10,748.19 10,700.00 10,850.00 10,900.00 Al Rayan Islamic Index (QERI Index) 3,158.51 UP UP 3,151.22 3,123.00 3,199.21 3,220.00 Masraf Al Rayan (MARK QD) 33.65 UP UP 32.75 32.00 34.15 34.40 Commercial Bank of Qatar (CBQK QD) 73.90 UP UP 73.30 72.80 74.00 74.50 Doha Bank (DHBK QD)* 63.00 UP UP 62.30 61.95 64.00 64.45 Qatar Islamic Bank (QIBK QD)* 74.10 UP UP 74.00 72.30 75.00 75.50 Qatar International Islamic Bank (QIIK QD) 65.20 UP UP 64.30 63.50 65.20 65.50 Qatar Insurance (QATI QD) 72.00 UP UP 71.41 71.00 72.80 73.50 National Leasing Holding Co. (NLCS QD) 31.00 UP UP 30.60 30.00 31.45 31.80 Widam Food Co. (WDAM QD) 53.50 UP UP 53.00 51.90 54.00 54.70 Al Meera Consumer Goods Co. (MERS) 134.00 UP DOWN 133.40 132.00 134.50 135.80 Industries Qatar (IQCD QD) 172.30 UP UP 171.00 169.50 173.00 174.20 Qatar Electricity & Water Co. (QEWS QD)* 179.00 UP UP 177.20 176.00 180.00 182.50 Gulf International Services (GISS QD) 68.00 UP UP 67.00 66.20 68.80 69.40 Qatari Investors Group (QIGD QD) 50.20 UP UP 49.50 47.70 52.40 56.20 Barwa Real Estate Co. (BRES QD)* 30.90 UP UP 30.85 30.50 31.20 31.90 United Development Co. (UDCD QD) 23.00 DOWN UP 22.85 22.50 23.35 23.50 Ooredoo (ORDS QD) 141.00 UP UP 139.90 139.40 141.50 142.90 Vodafone Qatar (VFQS QD) 10.98 DOWN UP 10.83 10.50 11.00 11.19 Nakilat (QGTS QD) 20.54 DOWN UP 20.35 20.00 20.74 21.07 Milaha (QNNS QD) 88.50 UP UP 88.00 87.30 88.60 89.40 Banks and Financial Services Banks and Consumer Goods and Services Consumer G Industrials Industrials Real Estate Real Estate Telecom Telecom Transportation 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