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TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER
QE Index: Short-Term – Uptrend
The QE Index maintained its bullish momentum for the second
consecutive session, recording another all-time high. The index
remained in an upbeat mode throughout the day and closed above
the 14,100.0 mark for the first time. With both the momentum
indicators looking strong and showing no trend reversal signs, the
index may rally further to tag new highs. Conversely, the index may
find support at the 14,100.0 and 14,050.0 levels.
Al Khalij Commercial Bank: Short-Term – Bounce Back
KCBK advanced 3.05% and surpassed its resistances of QR22.85,
QR23.23 and the ascending pennant in a single swoop. We believe
this strong breach of resistances has bullish implications and the
stock may continue its rally to target QR23.50. However, traders may
need to exercise caution if the stock slips below QR23.23. Meanwhile,
the RSI is moving up in a bullish manner, while the MACD is diverging
away from the signal line toward the upside.
Al Rayan Islamic Index: Short-Term – Upmove
The QERI Index extended its gains and moved higher for the fifth
session in a row to settle at 4,787.18. Moreover, the index breached
its important resistance of 4,770.0 and managed to close above it,
after failing to cross in the past few attempts. Further, the RSI in the
buy zone is suggesting continued upside. Hence, the bias remains
positive and the index may advance above 4,800.0. On the flip side,
4,770.0 may provide an immediate support for the index.
Qatari Investors Group: Short-Term – Rebound
QIGD jumped 3.72% and cleared its resistances of QR60.60,
QR61.30 and the ascending pennant in a single trading session. With
volumes picking up at these levels, it appears potential buyers are
stepping in. We believe the current higher push has enough steam to
push the stock further toward QR62.40. Moreover, both the
momentum indicators are providing bullish signals, indicating a likely
higher move. However, a dip below QR61.30 may result in a pullback.
Qatar International Islamic Bank: Short-Term – Bounce Back
QIIK gained 2.58% and cleared its important resistances of QR90.50
and QR91.50, after consolidating below them over the past few days.
Notably, both these developments came on the back of strong
volumes. The breakout suggests a continued near-term rise in QIIK,
targeting the QR93.50 level. However, a retreat below QR91.50 on a
closing basis may drag the stock down. Meanwhile, the RSI has
shown a bullish divergence, indicating strength.
Vodafone Qatar: Short-Term – Upmove
VFQS breached the important resistance of QR21.97 and made
further headway yesterday. Moreover, the stock developed a bullish
engulfing candlestick formation on daily charts, which is usually a
positive signal. Further, the RSI is moving strongly in the buy zone,
which is supporting this positive sentiment. Thus traders may consider
buying the stock at the current level for a target price of QR22.80 in
the near-term, with a strict stop loss of QR21.97.
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 [email protected] [email protected] [email protected] [email protected] [email protected] 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) 14,109.16 UP UP 14,100.00 14,050.00 14,135.50 14,200.00
Al Rayan Islamic Index (QERI Index) 4,787.18 UP UP 4,770.31 4,750.00 4,811.58 4,850.00
Banks and Financial Services Banks and Financial Services
Masraf Al Rayan (MARK QD) 56.50 UP UP 55.80 54.00 57.30 58.20
Commercial Bank of Qatar (CBQK QD) 73.40 UP UP 72.40 70.70 74.30 75.00
Doha Bank (DHBK QD) 62.30 UP UP 62.00 61.00 63.30 64.50
Qatar Islamic Bank (QIBK QD) 117.80 UP UP 117.40 115.00 119.90 123.70
Qatar International Islamic Bank (QIIK QD)* 91.60 UP UP 91.50 90.50 93.50 96.00
Qatar Insurance (QATI QD) 99.50 UP UP 98.00 97.00 100.00 101.00
Al Khalij Commercial Bank (KCBK QD)* 23.29 UP UP 23.23 22.85 23.50 24.00
Consumer Goods and Services Consumer Goods and Services
Medicare Group (MCGS QD) 130.30 DOWN UP 128.80 126.50 131.40 135.20
Al Meera Consumer Goods Co. (MERS QD) 188.90 UP UP 187.80 185.00 190.00 191.50
Industrials Industrials
Industries Qatar (IQCD QD) 194.00 UP UP 193.50 192.10 194.60 198.00
Qatar Electricity & Water Co. (QEWS QD) 190.80 UP UP 190.00 188.00 192.00 194.00
Gulf International Services (GISS QD) 125.60 UP UP 124.10 122.50 127.00 129.80
Qatari Investors Group (QIGD QD)* 61.40 UP UP 61.30 60.60 62.40 64.70
Real Estate Real Estate
Barwa Real Estate Co. (BRES QD) 42.50 UP UP 42.50 41.80 42.75 43.20
United Development Co. (UDCD QD) 29.55 FLAT UP 29.50 29.05 30.00 30.45
Telecom Telecom
Ooredoo (ORDS QD) 132.50 UP UP 132.00 129.70 134.00 136.50
Vodafone Qatar (VFQS QD)* 22.00 UP UP 21.97 21.40 22.80 23.00
Transportation Transportation
Nakilat (QGTS QD) 24.93 UP UP 24.90 24.45 25.30 25.90
Milaha (QNNS QD) 97.70 UP UP 96.50 95.10 97.80 98.80
