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Daily Technical Trader – Qatar

Wednesday, 31 December 2014

Stocks Covered Today

Ticker Price Target

QIBK 103.10 102.10

QEWS 188.50 185.00

QSE Index

Level % Ch. Vol. (mn)

Last 12,327.62 -1.9 19.6

Resistance/Support

Levels 1st

2nd

3rd

Resistance 12,430 12,600 12,800

Support 12,200 11,430 10,900

QSE Index Commentary

Overview: The QSE followed suit with oil prices and regional markets; the Index lost 1.9%. Technical indicators on multiple time frames are giving mixed signals. Furthermore, the Index created a long legged Doji candlestick. All of this indicates indecision by market participants. In conclusion, listed constituents are looking for a clear direction amid persistent market volatility facing the exchange lately. Expected Target Level: 12,600 A break above the 12,430 level should propel the Index back to the 12,600. Volatility is expected to persist. Suggested Stop-Loss Level: 12,430

QSE Index (Daily)

Source: Bloomberg, QNBFS Research

QE Summary

Market Indicators 30 Dec 14 29 Dec 14 %Ch.

Value Traded (QR mn) 1,050.1 872.7 20.3

Ex. Mkt. Cap. (QR bn) 677.8 690.7 -1.9

Volume (mn) 23.4 28.0 -16.4

Number of Trans. 10,596 10,612 -0.2

Companies Traded 43 42 2.4

Market Breadth 5:35 38:1 –

QE Indices

Market Indices Close 1D% RSI

Total Return 18,386.53 -1.9 47.3

All Share Index 3,158.25 -1.6 48.5

Banks 3,215.19 -0.7 49.1

Industrials 4,083.10 -1.4 49.4

Transportation 2,265.44 -2.0 49.8

Real Estate 2,269.08 -4.2 43.6

Insurance 3,958.03 0.6 61.4

Telecoms 1,438.03 -2.2 50.7

Consumer 6,874.66 -2.7 47.8

Al Rayan Islamic 4,117.23 -2.4 47.4

RSI 14 (Over Bought)

Ticker Close 1D% RSI

QGRI 59.90 9.1 83.2

QCFS 48.00 0.0 73.3

RSI 14 (Over Sold)

Ticker Close 1D% RSI

QSE Index (30min)

Source: Bloomberg, QNBFS Research

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QIBK

Price % Ch. Volume

Last 103.10 -2.37 105,758

Resistance/Support

Levels (QR) 1st

2nd

3rd

Resistance 105.60 107.50 110.00

Support 102.10 100.00 96.00

Commentary

Overview: The bank made its way to QR107.50 top and could not maintain the level. The name slipped by session end, creating what is known as a Tombstone Doji in addition to the Spinning Top Doji created the day before. Both candlesticks signify indecision. When such candles are created in combination at a top, we believe it is more likely to see the price lose ground than maintain its upward momentum. It is clear that the resistance at QR107.50 was overwhelming; the name is trading below its 50SMA and 100SMA resistance levels while trying to maintain its position above the 200SMA support level. The MACD is below the zero line and the Histogram has tilted down, indicating more weakness to come. Moreover, on the hourly chart, we see the bank failed to break above the downtrend line and broke below the intraday uptrend line (denoted with the red-dashed line). Expected Price Retreat: QR102.10 – QR100.00 Although indecision dominates among market participants, weakness is expected on the name and a break below the QR103.00 level will be the sell trigger for this recommendation.

(Daily)

Source: Bloomberg, QNBFS Research

(Hourly)

Source: Bloomberg, QNBFS Research

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QEWS

Price % Ch. Volume

Last 188.50 -1.57 73,174

Resistance/Support

Levels (QR) 1st

2nd

3rd

Resistance 193.00 198.00 208.70

Support 187.00 185.00 180.00

Commentary

Overview: QEWS tried to break the QR193.00 level for the fourth consecutive day, creating what is known as an Advanced Block pattern. The QR193.00 price has proven to be a tough resistance to break. Previous tops were built at the level, while a downtrend line is also bundled in the area. The failure to break above this level is a strong sign that sellers were in control and may continue to do so. Unless the name breaks the QR193.00 price, we predict the price could lose momentum as exhibited by its daily MACD and RSI. On the other hand, it is important to mention that the 50SMA and the 100SMA are trenched at the QR187.00 level which could provide a supporting cushion. Expected Price Retreat: QR187.00 – QR185.00 If the price does not rebound above the QR193.00 price level, we could see continuation of selling pressure.

(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 12,327.62 12,055.59 12,166.37 12,234.81 12,345.60 12,456.38 12,524.82 12,635.61 13,018.40 13,354.64 12,959.67

Total Return 18,386.53 17,980.79 18,146.02 18,248.11 18,413.34 18,578.57 18,680.66 18,845.89 19,416.83 19,918.32 19,316.17

All Share 3,158.25 3,085.38 3,113.23 3,130.43 3,158.27 3,186.12 3,203.32 3,231.16 3,306.21 3,383.24 3,290.49

Al Rayan Islamic 4,117.23 3,982.63 4,037.20 4,070.92 4,125.49 4,180.06 4,213.78 4,268.35 4,369.08 4,517.89 4,317.79

Banks & Financials Services

MARK 44.75 43.65 44.20 44.55 45.10 45.65 46.00 46.55 48.32 51.84 50.58

CBQK 68.50 65.83 66.79 67.38 68.33 69.29 69.88 70.83 71.08 70.83 68.76

DHBK 57.40 55.33 55.98 56.38 57.03 57.68 58.08 58.73 57.69 58.85 59.83

QIBK 103.10 101.90 102.59 103.01 103.70 104.39 104.81 105.50 105.59 110.49 100.14

QIIK 82.00 78.33 79.48 80.19 81.33 82.48 83.19 84.33 83.54 85.90 83.88

Insurance

QATI 90.50 86.50 87.84 88.66 90.00 91.34 92.16 93.50 91.84 94.70 85.73

Consumer Goods & Services

MCGS 115.10 111.03 112.94 114.12 116.03 117.94 119.12 121.03 122.63 125.91 104.59

Industrials

IQCD 172.30 167.43 168.96 169.91 171.43 172.96 173.91 175.43 185.73 186.44 183.69

QEWS 188.50 184.50 186.22 187.28 189.00 190.72 191.78 193.50 187.16 187.31 185.14

GISS 98.90 93.63 95.93 97.34 99.63 101.93 103.34 105.63 108.37 114.63 103.99

QIGD 41.00 38.47 39.54 40.20 41.27 42.34 43.00 44.07 44.86 51.49 55.78

Real Estate

BRES 42.00 37.87 39.49 40.49 42.12 43.74 44.74 46.37 45.19 43.07 40.99

UDCD 23.80 23.07 23.30 23.44 23.67 23.90 24.04 24.27 25.52 27.39 25.90

ERES 15.16 14.15 14.59 14.86 15.31 15.75 16.02 16.47 17.54 18.58 21.37

MRDS 19.10 17.72 18.29 18.63 19.20 19.77 20.11 20.68 21.62 22.67 20.43

Telecommunication

ORDS 119.00 117.87 118.25 118.48 118.87 119.25 119.48 119.87 119.27 124.47 132.88

VFQS 16.35 15.48 15.85 16.07 16.43 16.80 17.02 17.38 18.07 19.58 18.43

Transportation

QGTS 22.90 22.17 22.44 22.61 22.87 23.14 23.31 23.57 23.44 23.96 23.34

QNNS 96.00 93.40 94.32 94.88 95.80 96.72 97.28 98.20 97.91 96.54 95.43 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

Disclaimer and Copyright Notice: This publication has been prepared by QNB Financial Services SPC (“QNBFS”) a wholly-owned subsidiary of QNB SAQ (“QNB”). QNBFS is regulated by the Qatar Financial Markets Authority and the Qatar Exchange QNB SAQ 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. QNBFS accepts no liability whatsoever for any direct or indirect losses arising from use of this report. Any investment decision should depend on the individual circumstances of the investor and be based on specifically engaged investment 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. 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. For reports dealing with Technical Analysis, expressed opinions and/or recommendations may be different or contrary to the opinions/recommendations of QNBFS Fundamental Research as a result of depending solely on the historical technical data (price and volume). 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. This report may not be reproduced in whole or in part without permission from QNBFS.