13 October Daily technical trader

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Information about 13 October Daily technical trader
Economy & Finance

Published on October 13, 2014

Author: QNBGROUP

Source: slideshare.net

1. Page 1 of 2 TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER QE Index: Short-Term – Pullback The QE Index ended the session in the red with a sharp cut of around 415 points (-3.0%) to settle near 13,400.0. The index witnessed a gap-down opening and remained in bearish mode, penetrating below many important psychological supports along with the 55-day moving average. We believe traders are likely to witness further weakness and the index may drift down toward 13,350.0. Conversely, a close above 13,450.0 may attract buying interest. Medicare Group: Short-Term – Pullback MCGS after witnessing a brief period of consolidation dipped below the important supports of QR128.80 and QR126.50 along with the 21- day moving average. Moreover, the stock developed a bearish Marubozu candlestick formation, indicating a likely continuation of this pullback. Further, the RSI has shown a negative slope. We believe the stock may not cling onto its immediate support of the 55-day moving average and continue its decline toward QR121.50. Al Rayan Islamic Index: Short-Term – Pullback The QERI Index fell drastically losing around 151 points (-3.22%), caving under sustained selling pressure. The index made a weak start to the day and further retreated breaching its important supports of 4,600.0 and the 55-day moving average in a single swoop. With both the momentum indicators providing bearish signals, the index may continue to drift lower toward 4,500.0. On the flip side, if the index manages to climb above 4,584.0, it may rebound. Barwa Real Estate Co.: Short-Term – Pullback BRES has been facing stiff resistance of the descending trendline and has been unable to clear it even after multiple rejected attempts. Further, the stock breached its supports of QR41.0 and QR40.20 providing a bearish signal. The prognosis of the current time implies a further downside and the stock may test QR39.70. However, if the stock manages to reclaim QR40.20 it may halt its pullback. Meanwhile, both the momentum indicators suggest weakness. Masraf Al Rayan: Short-Term – Pullback MARK failed to make any further headway above QR56.0 and reversed penetrating below the supports of the 55-day moving average and QR54.0 in a single trading session. Notably, volumes were also large on the decline, indicating a negative sign. We believe the stock may continue to weaken further and move lower to test QR52.80, followed by QR51.80. However, MARK may get some relief if it moves above QR54.0. Meanwhile, the RSI is pointing down. Qatar International Islamic Bank: Short-Term – Pullback QIIK has been moving along the descending trendline over the past few days and is in declining mode. Moreover, the stock penetrated below its supports of QR89.0 and QR87.80 along with the 55-day moving average, which has bearish implications. Further, the RSI is drifting down and has enough room before getting oversold, while the MACD is growing in a bearish manner. We believe the stock may continue to drift lower and test QR85.90, followed by QR84.90.

2. 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 saugata.sarkar@qnbfs.com.qa abdullah.amin@qnbfs.com.qa shahan.keushgerian@qnbfs.com.qa sahbi.alkasraoui@qnbfs.com.qa ahmed.alkhoudary@qnbfs.com.qa 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) 13,416.06 DOWN DOWN 13,350.54 13,300.00 13,447.17 13,500.00 Al Rayan Islamic Index (QERI Index) 4,539.47 DOWN DOWN 4,528.58 4,481.57 4,584.50 4,638.81 Banks and Financial Services Banks and Masraf Al Rayan (MARK QD)* 53.20 DOWN DOWN 52.80 51.80 54.00 55.00 Commercial Bank of Qatar (CBQK QD) 71.90 DOWN UP 71.50 70.70 72.40 73.40 Doha Bank (DHBK QD) 58.30 DOWN DOWN 58.00 56.20 59.20 59.90 Qatar Islamic Bank (QIBK QD) 111.00 DOWN DOWN 111.00 110.00 113.00 115.00 Qatar International Islamic Bank (QIIK QD)* 86.50 DOWN DOWN 85.90 84.90 87.80 89.00 Qatar Insurance (QATI QD) 98.60 FLAT UP 98.00 97.00 99.00 100.00 Consumer Goods and Services Consumer Goods Medicare Group (MCGS QD)* 124.50 DOWN FLAT 121.50 118.20 126.50 128.80 Industrials Industrials Industries Qatar (IQCD QD) 185.50 DOWN FLAT 184.00 182.50 186.40 188.50 Qatar Electricity & Water Co. (QEWS QD) 187.00 DOWN DOWN 186.00 184.00 188.00 190.00 Gulf International Services (GISS QD) 117.00 DOWN DOWN 115.00 111.90 118.10 119.50 Qatari Investors Group (QIGD QD) 56.60 DOWN DOWN 56.10 55.20 57.70 59.00 Real Estate Real Estate Barwa Real Estate Co. (BRES QD)* 40.15 DOWN DOWN 39.70 39.20 40.20 41.00 United Development Co. (UDCD QD) 27.80 DOWN DOWN 27.35 27.00 27.85 28.20 Ezdan Holding Group (ERES QD) 19.77 DOWN DOWN 19.71 19.36 20.04 20.36 Mazaya Qatar Real Estate Development (MRDS QD) 23.30 DOWN DOWN 23.00 22.45 23.50 23.90 Telecom Telecom Ooredoo (ORDS QD) 127.10 DOWN DOWN 126.00 124.50 128.00 129.70 Vodafone Qatar (VFQS QD) 20.55 DOWN DOWN 20.40 20.00 20.79 21.00 Transportation Transportation Nakilat (QGTS QD) 24.14 DOWN DOWN 23.90 23.50 24.20 24.45 Milaha (QNNS QD) 95.00 DOWN DOWN 94.50 93.90 95.10 96.50

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