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Daily Technical Trader – Qatar

Wednesday, 17 December 2014

Stocks Covered Today

Ticker Price Target

VFQS* 14.00 12.60

UDCD 20.29 21.80 *Medium-term

QSE Index

Level % Ch. Vol. (mn)

Last 11,057.33 -3.5 16.2

Resistance/Support

Levels 1st

2nd

3rd

Resistance 11,430 11,230 11,640

Support 10,900 10,500 10,000

QSE Index Commentary

Overview: The Index is at a critical level. Stability is critical above the 10,900 level where the support comes from a medium-term uptrend. A breach below the level means the start of a medium-term downtrend which may drag the Index below the 10,000 level. There is some light at the end of the tunnel. The Index, over the past sessions, did not close below the 10,900. Thus creating what can be considered as Tweezers Bottom reversal formation. This can only be confirmed with a strong move above the 11,600 points. Expected Target Level: 11,600 This is a best case scenario given the drop in oil prices and regional contagion. Suggested Stop-Loss Level: 10,900 If broken, then sell and watch.

QSE Index (Weekly)

Source: Bloomberg, QNBFS Research

QE Summary

Market Indicators 16 Dec 14 15 Dec 14 %Ch.

Value Traded (QR mn) 929.4 1,008.1 -7.8

Ex. Mkt. Cap. (QR bn) 612.0 634.0 -3.5

Volume (mn) 20.3 25.2 -19.4

Number of Trans. 8,192 11,034 -25.8

Companies Traded 41 41 0.0

Market Breadth 5:34 37:4 –

QE Indices

Market Indices Close 1D% RSI

Total Return 16,491.91 -3.5 21.6

All Share Index 2,822.41 -3.5 21.6

Banks 2,972.31 -1.6 29.8

Industrials 3,574.16 -5.3 19.7

Transportation 2,010.31 -4.9 20.3

Real Estate 1,970.48 -5.0 15.0

Insurance 3,309.04 0.4 18.1

Telecoms 1,278.80 -5.6 27.0

Consumer 6,022.43 -5.0 23.2

Al Rayan Islamic 3,601.85 -4.9 20.9

RSI 14 (Over Bought)

Ticker Close 1D% RSI

RSI 14 (Over Sold)

Ticker Close 1D% RSI

AHCS 10.60 -8.2 6.8

MPHC 25.70 -5.3 8.1

ERES 13.18 -4.3 9.9

SIIS 12.57 -5.5 12.6

QOIS 11.30 -9.2 14.6

QSE Index (Daily)

Source: Bloomberg, QNBFS Research

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VFQS (Medium-Term)

Price % Ch. Volume

Last 14.00 -7.59 1,647,995

Resistance/Support

Levels (QR) 1st

2nd

3rd

Resistance 15.90 17.20 18.20

Support 13.90 12.60 10.70

Commentary

Overview: The name, over the medium-term, is bearish. It created a double-top that can be seen on the weekly chart. Indicators are supporting the idea that more weakness is ahead of us. The MACD just dropped below the zero line and the RSI is just reaching the oversold area, suggesting more drops to come. Bounces are possible, but should be treated as exits of long positions. These expected bounces are exhibited by the daily chart’s indicators. The RSI is positively diverging vs. the price while it is still in the oversold area. Betting on these bounces can be very tricky because traders are catching a falling knife; it is a high risk business with low return while most of the market players are against the buyer. Expected Price Retreat: QR12.60 – QR10.70 This needs a break below the QR14.00 price with high volumes for a couple of sessions to trigger the sell order.

(Weekly)

Source: Bloomberg, QNBFS Research

(Daily)

Source: Bloomberg, QNBFS Research

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UDCD

Price % Ch. Volume

Last 20.29 -6.93 1,029,155

Resistance/Support

Levels (QR) 1st

2nd

3rd

Resistance 21.90 21.14 24.10

Support 20.00 19.70 18.00

Commentary

Overview: UDCD created what is possibly called a Tweezers Bottom candlestick, which is a reversal pattern. There is a probability that the name will bounce from the QR20.00 price level; previous bottoms made last March can create a support level there. Indicators are mainly bearish, manifesting the previous downtrend. These bearish indicators reached extreme levels, thus overselling could be unfolding. The RSI on the daily is at the oversold area while on the hourly it is bouncing off the oversold area and positively diverging vs. price. Expected Target Price: QR21.80 A bounce is expected from this level. For more conservative traders, a break above QR20.00 is needed to buy into the name. Suggested Stop-Loss Price: QR19.70 A drop below the level means continuation of the previous downtrend.

(Daily)

Source: Bloomberg, QNBFS Research

(Hourly)

Source: Bloomberg, QNBFS Research

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Intra-day Fibonacci Support and Resistance Levels Daily Moving Averages* Support Levels Resistance Levels

Ticker Close 3rd

2nd

1st

Pivot 1st

2nd

3rd

50 SMA 100 SMA 200 SMA

QSE Index 11,057.33 10,746.57 10,873.60 10,952.07 11,079.10 11,206.13 11,284.60 11,411.63 13,222.86 13,429.76 12,932.30

Total Return 16,491.91 16,028.40 16,217.86 16,334.91 16,524.38 16,713.84 16,830.89 17,020.36 19,721.77 20,030.36 19,256.00

All Share 2,822.41 2,747.68 2,778.31 2,797.23 2,827.86 2,858.49 2,877.41 2,908.04 3,353.40 3,399.73 3,282.34

Al Rayan Islamic 3,601.85 3,459.47 3,519.92 3,557.27 3,617.72 3,678.17 3,715.52 3,775.97 4,449.63 4,547.71 4,286.87

Banks & Financials Services

MARK 41.60 38.93 39.77 40.29 41.13 41.97 42.49 43.33 49.60 52.61 50.24

CBQK 62.80 59.00 60.49 61.41 62.90 64.39 65.31 66.80 71.81 71.00 68.62

DHBK 50.10 48.30 49.26 49.85 50.80 51.76 52.35 53.30 57.94 58.98 60.11

QIBK 85.80 81.40 83.42 84.68 86.70 88.72 89.98 92.00 107.45 110.83 98.97

QIIK 71.80 64.67 67.30 68.93 71.57 74.20 75.83 78.47 84.41 86.26 83.63

Insurance

QATI 77.00 75.07 76.17 76.86 77.97 79.07 79.76 80.87 93.74 94.85 84.69

Consumer Goods & Services

MCGS 96.00 86.47 90.32 92.71 96.57 100.42 102.81 106.67 124.78 124.98 102.41

Industrials

IQCD 162.20 158.07 159.59 160.54 162.07 163.59 164.54 166.07 187.88 186.73 184.63

QEWS 170.00 159.00 162.25 164.25 167.50 170.75 172.75 176.00 187.03 187.11 184.45

GISS 72.30 69.10 70.82 71.88 73.60 75.32 76.38 78.10 112.45 116.49 102.99

QIGD 35.00 33.67 34.05 34.28 34.67 35.05 35.28 35.67 47.36 52.62 55.86

Real Estate

BRES 36.90 33.97 35.04 35.70 36.77 37.84 38.50 39.57 44.74 43.01 40.52

UDCD 20.29 19.36 19.76 20.01 20.41 20.81 21.06 21.46 26.34 27.81 25.78

ERES 13.18 12.53 12.87 13.08 13.43 13.77 13.98 14.33 18.36 19.19 21.43

MRDS 15.90 15.17 15.53 15.75 16.11 16.47 16.69 17.05 22.37 22.73 20.15

Telecommunication

ORDS 107.00 103.53 105.52 106.75 108.73 110.72 111.95 113.93 121.21 125.63 134.03

VFQS 14.00 13.43 13.72 13.90 14.18 14.47 14.65 14.93 18.89 19.91 18.25

Transportation

QGTS 20.35 20.05 20.20 20.30 20.45 20.60 20.70 20.85 23.64 24.07 23.29

QNNS 85.00 81.00 82.91 84.09 86.00 87.91 89.09 91.00 97.86 96.43 95.38 Source: Bloomberg, QNBFS Research; Note: Numbers in Italics denote moving averages that are above the given index level/stock price

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Definitions:

Candlestick: A chart that displays the high, low, opening and closing prices for a security in a single period. The body of the candle is made up by the opening

and the closing prices, i.e., the taller the body the greater the range between these two prices and vice versa. A colored candle denotes a closing price that is

lower than the opening price, while a white candle shows the opposite. The candlestick's shadows or wicks show the period's high and low prices and how they

compare to the opening and closing price. In general, the shape of the candle will vary upon the positions of the period's high, low, opening and closing prices.

Support: A level that could cause more buyers to step in in order to prevent the security from falling or causing the security price to head higher.

Resistance: An inverse of a support level. A resistance area or level could cause more sellers to step in in order to prevent the security from rising or causing the

security price to head lower.

SMA (Simple Moving Average): Is an arithmetic average, which calculates the average price of a security over a defined number of periods and is thus

considered a lagging indicator. SMAs used in our analysis refer to closing prices. In general, SMAs serve many purposes, such as a smoothing tool, an indicative

price direction and potential support/resistance levels.

Market Breadth: Breadth indicates the number of securities that have closed higher vs. the number of decliners in a particular exchange.

MACD (Moving Average Convergence/Divergence): Is a trading indicator, which shows changes in the strength, direction, momentum and duration of a trend in

a stock's price through a collection of three time series calculated from historical closing price data.

RSI (Relative Strength Index): Is a momentum indicator that compares a security’s price gains to its losses for a predetermined number of periods (we generally

use 14 periods). The RSI attempts to point out how a security, in relative terms, is in the overbought/oversold zone. Securities with a RSI above 70 could be

considered as overbought, and below 30 could be considered as oversold.

Pattern/Formation: Is a graphical presentation of a security’s price activity over a certain period of time. Formations come in different shapes (such as, head &

shoulders, triangles, flags, and so on). They can be used to identify potential trends, reversal of trends, price targets, entry and exit points, etc.

Fibonacci Retracements: Are horizontal lines that indicate expected areas of support/resistance for a security based on a predetermined price movement. These

levels are usually indicated by Fibonacci ratios of 23.6%, 38.2%, 50.0%, 61.8% and 100% from that particular movement.

Fibonacci Pivot and Intra-day Support/Resistance: A Pivot Point is generally used to formulate expected future support/resistance levels. From the base Pivot

Point, Fibonacci multiples of the high-low differential are added to form resistance levels and subtracted to form support levels.

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Contacts

Saugata Sarkar Abdullah Amin, CFA Shahan Keushgerian

Head of Research Senior Research Analyst Senior Research Analyst

Tel: (+974) 4476 6534 Tel: (+974) 4476 6569 Tel: (+974) 4476 6509 saugata.sarkar@qnbfs.com.qa abdullah.amin@qnbfs.com.qa shahan.keushgerian@qnbfs.com.qa

Sahbi Kasraoui Ahmed Al-Khoudary QNB Financial Services SPC

Manager – HNWI Head of Sales Trading – Institutional Contact Center: (+974) 4476 6666

Tel: (+974) 4476 6544 Tel: (+974) 4476 6548 PO Box 24025 sahbi.alkasraoui@qnbfs.com.qa ahmed.alkhoudary@qnbfs.com.qa Doha, Qatar

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