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TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER
QE Index: Short-Term – Uptrend
The QE Index continued its rising mode for the third session in a row
and recorded yet another all-time high. The index has been
relentlessly moving up since the past few days and is showing no
immediate trend reversal signs. We believe based on the current
higher move the index may continue its positive momentum tagging
new highs. Moreover, both the momentum indicators are moving up.
On the flip side, 14,100.0 may act as a psychological support.
Al Khalij Commercial Bank: Short-Term – Upmove
KCBK built on its gains and made further headway yesterday.
Moreover, the RSI is moving up in a bullish manner, while the MACD
is diverging away from the signal line toward the upside, indicating
strength in the current rally. We believe based on the recent price
action, the stock has enough steam to surpass QR23.50 and target
QR24.0. However, a retreat below QR23.23 on a closing basis may
drag the stock back into the congestion zone.
Al Rayan Islamic Index: Short-Term – Neutral
The QERI Index maintained its winning streak for the sixth
consecutive session and gained marginally to settle at 4,787.68.
However, the index developed a Doji candlestick formation, indicating
indecision on the part of buyers and sellers. Meanwhile, the index has
its immediate support near 4,770.0, which if breached may result in a
pullback toward 4,750.0. Conversely, the index may extend its gains if
it stays above the 4,770.0 level.
Barwa Real Estate Co.: Short-Term – Pullback
BRES penetrated below its important support of QR42.50 after
holding above it, which is a negative sign. The stock has been facing
stiff resistance of the descending trendline and is struggling to move
above it, even after repeated failed attempts. We believe the stock
might drift lower toward its immediate support of QR41.80. Further,
the RSI is indicating weakness. If the stock manages to reclaim
QR42.50, it may provide some relief.
Ooredoo: Short-Term – Upmove
ORDS breached its resistance of QR132.0 on Sunday and advanced
further to clear the QR134.0 level, confirming this upmove. Moreover,
the stock developed a sizable bullish candlestick formation, indicating
a likely continuation of this upmove. Further, both the momentum
indicators are proving bullish signals. Thus, traders may consider
buying the stock at the current level for an immediate target of
QR135.90 with a strict stop loss of QR134.0.
Gulf International Services: Short-Term – Pullback
GISS has been in a declining mode since topping the current rally at
QR129.80. We believe although the stock is trading close to its
immediate support of QR124.10, it is unlikely to cling onto it and it
may drift down further to test QR122.50. However, if the stock
manages to stay above QR124.10, it may attempt a rebound.
Meanwhile, the RSI has shown a negative slope, while the MACD is
closing the signal line in a bearish manner.
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) 14,137.33 UP UP 14,100.00 14,050.00 14,149.02 14,200.00
Al Rayan Islamic Index (QERI Index) 4,787.68 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) 56.30 FLAT UP 55.80 54.00 57.30 58.20
Commercial Bank of Qatar (CBQK QD) 73.30 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) 117.90 DOWN UP 117.40 115.00 119.90 123.70
Qatar International Islamic Bank (QIIK QD) 92.30 UP UP 91.50 90.50 93.50 96.00
Qatar Insurance (QATI QD) 98.60 DOWN UP 98.00 97.00 100.00 101.00
Al Khalij Commercial Bank (KCBK QD)* 23.40 UP UP 23.23 22.85 23.50 24.00
Consumer Goods and Services Consumer Goods and Services
Medicare Group (MCGS QD) 130.00 DOWN UP 128.80 126.50 131.40 135.20
Al Meera Consumer Goods Co. (MERS QD) 189.00 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) 191.90 UP UP 190.00 188.00 192.00 194.00
Gulf International Services (GISS QD)* 124.20 UP UP 124.10 122.50 127.00 129.80
Qatari Investors Group (QIGD QD) 61.50 UP UP 61.30 60.60 62.40 64.70
Real Estate Real Estate
Barwa Real Estate Co. (BRES QD)* 42.35 UP UP 41.80 41.00 42.50 42.75
United Development Co. (UDCD QD) 29.70 UP UP 29.50 29.05 30.00 30.45
Telecom Telecom
Ooredoo (ORDS QD)* 134.20 UP UP 134.00 132.00 135.90 138.50
Vodafone Qatar (VFQS QD) 21.82 UP UP 21.40 21.00 21.97 22.30
Transportation Transportation
Nakilat (QGTS QD) 25.00 UP UP 24.90 24.45 25.30 25.90
Milaha (QNNS QD) 97.30 UP UP 96.50 95.10 97.80 98.80
