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TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER
QE Index: Short-Term – Uptrend
The QE Index showcased a robust performance and gained around
112 points (0.82%), recording an all-time high of 13,928.54. However
it later trimmed its gains. The index remained in a bullish mode as
sustained buying interest pushed the index above the 13,850.0 level.
Meanwhile, the strength in the momentum indicators suggests that
the index may continue its positive momentum and proceed further.
On the flip side, 13,850.0 may act as an intermediate support.
Industries Qatar: Short-Term – Upmove
IQCD continued its upmove and surpassed the resistance of
QR190.0 with increased participation. Moreover, the stock has been
moving along the ascending channel over the past few days and is
gaining momentum. Meanwhile, IQCD is currently sitting exactly on its
key resistance of QR191.0. Any move above this level may trigger
fresh buying and push the stock further to test QR193.50. However,
any failure to move above QR191.0 may result in consolidation.
Al Rayan Islamic Index: Short-Term – Uptrend
The QERI Index after taking a breather scaled to yet another new
peak to record an all-time high. The index has shown a steep ascent
since July and is currently experiencing a bull-run. Further, the RSI is
moving strongly into the overbought territory, while the MACD is
diverging away from the signal line on the upside, indicating strength.
We believe the index may continue its bullish momentum and record
new highs. Conversely, 4,800.0 may act as a psychological support.
United Development Co.: Short-Term – Bounce Back
UDCD found support at its 21-day moving average and rebounded,
breaching its resistance of QR29.85. Moreover, the stock developed
a bullish engulfing candlestick formation, which usually indicates a
positive signal. We believe based on the recent price action and spike
in volumes, the stock may continue to move ahead and test QR30.45.
However, any retreat below QR29.85 may result in a pullback.
Meanwhile, the RSI is moving up in a bullish manner.
Commercial Bank of Qatar: Short-Term – Bounce Back
CBQK cleared the resistances of the ascending pennant and
QR68.30, after feigning a failure in the past few attempts, which is a
positive sign. Moreover, the stock created a sizable bullish candlestick
formation on the daily chart, indicating a likely continuation of this
upmove. Further, the RSI in the buy zone supports this bullish
sentiment. Traders could consider buying the stock at the current
level for a target of QR69.50 with a stop loss of QR68.30.
Qatar International Islamic Bank: Short-Term – Upmove
QIIK continued its bullish momentum and jumped 3.72%, tagging a
52-week high. Moreover, the stock surpassed the resistances of
QR89.0 and QR90.50 in a single swoop. Notably, volumes were also
large on the rise, reflecting optimism among traders. Further, both the
momentum indicators are providing bullish signals. We believe the
stock may continue its advance and test QR93.50, followed by
QR95.80. However, a decline below QR90.50 may halt its upmove.
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
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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,
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*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.
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
Second Qatar Exchange Index (QE Index) 13,865.89 UP UP 13,847.11 13,800.00 13,928.54 14,000.00 Al Rayan Islamic Index (QERI Index) 4,812.73 UP UP 4,800.00 4,770.31 4,830.58 4,870.00 Banks and Financial Services
Banks and Masraf Al Rayan (MARK QD)
61.30 Commercial Bank of Qatar (CBQK QD)* 68.70 UP UP 68.30 67.50 69.50 70.00
Doha Bank (DHBK QD)
63.10 Qatar Islamic Bank (QIBK QD) 123.00 UP UP 121.50 119.50 123.80 125.00
Qatar International Islamic Bank (QIIK QD)*
95.80 Qatar Insurance (QATI QD) 98.50 UP UP 97.00 96.00 99.00 100.00
Al Khalij Commercial Bank (KCBK QD)
22.50 Consumer Goods and Services
Consumer Goods Medicare Group (MCGS QD)
Al Meera Consumer Goods Co. (MERS QD)
Industries Qatar (IQCD QD)*
193.50 Qatar Electricity & Water Co. (QEWS QD) 187.00 UP UP 186.00 184.00 188.00 190.00
Gulf International Services (GISS QD)
124.10 Qatari Investors Group (QIGD QD) 59.60 UP UP 57.70 56.20 59.70 60.60 Real Estate
Barwa Real Estate Co. (BRES QD)
42.50 United Development Co. (UDCD QD)* 30.05 UP UP 29.85 29.50 30.45 30.61 Telecom
Ooredoo (ORDS QD)
124.90 Vodafone Qatar (VFQS QD) 21.60 UP UP 21.40 21.00 21.99 22.30 Transportation
Nakilat (QGTS QD)
25.00 Milaha (QNNS QD) 95.00 UP UP 93.00 91.30 95.10 96.50