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21 July Daily technical trader


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21 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 snapped its four-day winning streak and shed around 129 points (-0.97%) on the back of profit-booking. The index witnessed a gap-up opening and went very close to test 13,400.0, but took a U-turn and retraced below 13,200.0. On the downside, the index has an immediate support near 13,080.0. We believe the current upmove remains intact until it stays above 13,080.0. However, any dip below this level may result in a pullback. Industries Qatar: Short-Term – Pullback IQCD breached both the supports of QR180.0 and QR178.30 after moving sideways over the past few days, which is a negative sign. The stock has been facing stiff resistance at the ascending trendline and is moving along it over the past few days. Moreover, the stock developed a bearish Marubozu candlestick pattern, indicating it may move further down to test QR175.50. However, a close above QR178.30 may halt its downmove. Al Rayan Islamic Index: Short-Term – Neutral The QERI Index halted its fourth consecutive day of profits and ended the session in red with a cut of -1.08%, as traders opted to book profits. The index made a strong start to the day and momentarily moved above 4,500.0, but it was unable to hold onto its gains and declined below the important support near 4,445.0. Meanwhile, the index needs to reclaim 4,445.0 in order to proceed toward 4,500.0. Any failure to move above 4,445.0 may test the 4,400.0 level. Qatar Islamic Bank: Short-Term – Pullback QIBK developed a Doji candlestick pattern on Thursday and declined further yesterday, confirming the reversal in its trend, which was bullish until now. Moreover, the stock penetrated below both the supports of QR107.0 and QR104.50 in a single swoop, indicating weakness. With the RSI sliding down, we believe the stock may drift further and test QR102.0, followed by QR100.0. However, if the stock manages to move above QR104.50, it may attract buyers. United Development Co.: Short-Term – Uptrend UDCD moved above QR26.45 and surged 5.29%, tagging a new 52- week high. Notably, volumes were also high on the upmove, indicating rising optimism among traders. With both the indicators being bullish, the preferred direction of UDCD seems to be on the upside. We believe the stock may continue its bullish momentum and may record new highs. However, traders may need to keep a close watch on QR27.20 for any reversal signs. Al Khalij Commercial Bank: Short-Term – Pullback KCBK failed to make any further headway above the 55-day moving average and declined to dip below the support of QR22.35. Moreover, the stock developed a bearish candlestick pattern on daily charts, indicating a continuation of this pullback. We believe the stock may decline further to test QR21.87. However, a close above QR22.35 may provide some relief. Meanwhile, both the indicators are pointing lower, indicating the stock may likely move down.
  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 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) 13,155.58 UP UP 13,079.52 13,000.00 13,195.88 13,350.54 Al Rayan Islamic Index (QERI Index) 4,426.01 UP UP 4,400.00 4,350.00 4,444.85 4,528.58 Banks and Financial Services Banks and Masraf Al Rayan (MARK QD) 54.80 UP UP 54.00 52.60 55.80 57.30 Commercial Bank of Qatar (CBQK QD) 70.00 UP UP 69.50 68.30 70.70 71.80 Doha Bank (DHBK QD) 59.30 UP DOWN 59.30 58.10 60.00 61.30 Qatar Islamic Bank (QIBK QD)* 104.00 UP UP 102.00 100.00 104.50 107.00 Qatar International Islamic Bank (QIIK QD) 86.90 UP UP 86.10 85.00 88.00 88.50 Qatar Insurance (QATI QD) 88.50 UP UP 87.30 86.50 90.00 91.50 Al Khalij Commercial Bank (KCBK QD)* 22.10 UP DOWN 21.87 21.60 22.35 22.60 Consumer Goods and Services Consumer G Medicare Group (MCGS QD) 98.40 UP UP 96.50 95.00 99.00 100.00 Al Meera Consumer Goods Co. (MERS QD) 182.50 UP UP 181.60 180.00 183.00 185.00 Industrials Industrials Industries Qatar (IQCD QD)* 177.50 UP DOWN 175.50 173.00 178.30 180.00 Qatar Electricity & Water Co. (QEWS QD) 185.80 UP DOWN 184.00 182.00 187.00 188.90 Gulf International Services (GISS QD) 115.00 UP UP 111.90 109.00 116.00 119.50 Qatari Investors Group (QIGD QD) 55.20 DOWN DOWN 54.40 52.40 56.10 57.00 Real Estate Real Estate Barwa Real Estate Co. (BRES QD) 44.25 UP UP 43.80 43.20 45.00 45.75 United Development Co. (UDCD QD)* 27.85 UP UP 27.20 26.45 28.50 29.35 Telecom Telecom Ooredoo (ORDS QD) 134.50 UP DOWN 133.90 132.00 136.00 138.00 Vodafone Qatar (VFQS QD) 19.70 UP UP 19.29 18.75 20.00 20.78 Transportation Transportat Nakilat (QGTS QD) 23.65 FLAT UP 23.60 23.00 24.12 24.45 Milaha (QNNS QD) 98.50 UP UP 98.30 96.50 99.00 100.10