TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER
QE Index: Short-Term – Upmove
Al Rayan Islamic Index: Short-Term – Neutral
Al Meera Consumer Goods Co.: Short-Term – Breakout
The QE Index continued its uptrend and gained around 36 points
(0.33%) to close at 10,834.84. The positive development was that the
index managed to close above the 10,800.0 level, thus holding on to
its gains. Meanwhile, the index faces its next key resistance of the
ascending trendline near 10,850.0, which needs to be cleared in
order to keep its upward momentum going. On the flip side, the
10,800.0 level may act as an immediate support for the index.
The QERI Index respected its support of 3,151.22 and moved higher
around 0.25% after consolidating just for a single day on Tuesday.
We believe as long as the index trades above the 3,152.22 level, bulls
may continue to be in action and may push the index toward the
ascending trendline. Conversely, if the index dips below 3,151.22 it
may result in a bearish implication, and may drag it to test the 3,123.0
level. Meanwhile, both indicators are providing mixed signals.
MERS surpassed the resistance of the 55-day moving average
(currently at QR134.61) for the first time since December. The stock is
currently sitting right at its next resistance of QR135.80. We believe
with volumes also picking up the stock may be ready for a breakout
above this level targeting the QR136.90 level. Meanwhile, the RSI
and the MACD lines are moving higher, thus supporting our bullish
outlook for the stock.
Doha Bank: Short-Term – Upswing
Milaha: Short-Term – Breakout
Qatar International Islamic Bank: Short-Term – Upswing
DHBK continued its upmove and tagged another new 52-week high
yesterday. Moreover, the RSI is trending strongly in the overbought
territory, while the MACD is widening away from the signal line and is
rising upward with no immediate trend reversal signs. We believe the
stock is in an uptrend mode and may continue to tag a new 52-week
high. However, traders may need to keep a close watch near the
ascending trendline support for any reversal signs.
QNNS cleared the resistances of QR88.60 and QR89.40 in a single
swoop for the first time since November, which is a positive sign.
Moreover, the stock has been in strong upmove mode since clearing
both the moving averages and is gaining strength over the past few
days. We believe the stock may continue its momentum and may
proceed ahead to test QR91.0. Meanwhile, the RSI and the MACD
lines are moving up in a bullish manner.
QIIK moved higher and tagged a new 52-week high on the back of
large volumes yesterday. The stock has been moving up aggressively
since clearing the QR62.0 level and is showing no trend reversal
signs. We believe based on the current higher push the stock is
poised to tag a new 52-week high. Moreover, the bullishness in the
RSI is intact, while the MACD line is rising further up, indicating that
the stock has enough steam to accelerate further.
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Qatar Exchange Index (QE Index)
Al Rayan Islamic Index (QERI Index)
Masraf Al Rayan (MARK QD)
Commercial Bank of Qatar (CBQK QD)
Doha Bank (DHBK QD)*
Qatar Islamic Bank (QIBK QD)
Qatar International Islamic Bank (QIIK QD)*
Qatar Insurance (QATI QD)
National Leasing Holding Co. (NLCS QD)
Widam Food Co. (WDAM QD)
Al Meera Consumer Goods Co. (MERS)*
Industries Qatar (IQCD QD)
Qatar Electricity & Water Co. (QEWS QD)
Gulf International Services (GISS QD)
Qatari Investors Group (QIGD QD)
Barwa Real Estate Co. (BRES QD)
United Development Co. (UDCD QD)
Ooredoo (ORDS QD)
Vodafone Qatar (VFQS QD)
Nakilat (QGTS QD)
Milaha (QNNS QD)*
Banks and Financial Services
Consumer Goods and Services
*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
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.
Simple Moving Average (SMA): A SMA is the average of the closing price of a security for a given period.
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.
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.
Ahmed M. Shehada
QNB Financial Services SPC
Head of Research
Tel: (+974) 4476 6534
Head of Trading
Tel: (+974) 4476 6535
Head of Sales
Tel: (+974) 4476 6533
Manager - HNWI
Tel: (+974) 4476 6544
Contact Center: (+974) 4476 6666
PO Box 24025
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