December 04, 2017 - Aljazira Capital
December 04, 2017
MONTHLY SAUDI TECHNICAL REPORT TECHNICAL December 04, 2017
WEEKLY
23 November 2014
Tadawul; Weekly Index: For the index to regain its bullish trend, it needs to exceed 7250 level, while 6800 points is the main support level over the upcoming period.
Technical Summary The index closed at 7089 points.
7250
Main Support Level at 6800 points
Source: Bloomberg
All rights reserved | Disclaimer: Please refer to the Disclaimer on the last page
General Trend: From the weekly movement, the Saudi market index managed to hold around the most important medium term support at 6800 level. We expect the positive impact from diminishing geopolitical concerns in the region to have reflected positively on the index, along with the fight against corruption and the updates on the situation in Yemen. Market outlook remained positive after a good set of quarterly results and the increase in oil prices. Where current areas around 6800 points continue as the most important support for the index in the medium term, (6800 is the previous peak area for the month of April 2016, which the index exceeded it in December 2016). Moreover, it’s expected that the Tadawul Index is in the process of establishing a third upward wave that started at 6800 level and targeting 8350 points on the medium run. More support to the Index came after the recent increase in oil prices, after OPEC members and Russia agreed to extend the production cut until the end of 2018. The technical indicators could possibly continue the up-trend and test the important resistance level at 7250 points. The Index held and rebounded from the Bollinger Indicator low levels with a strong consolidation, which is likely to form purchasing pressures during the coming period. •Estimations: The outlook remains stable on the medium term, with maintaining 6800 levels as support key, while the index is likely to return to complete the main upward trend towards the resistance levels for the next period at 7250 - 7580 points, respectively. Caution if the index falls below 6800 points and closes the week below.
2
MONTHLY SAUDI TECHNICAL REPORT TECHNICAL December 04, 2017
WEEKLY
23 November 2014
Tadawul/Monthly: The Index was able to rebound from its most significant monthly averages at 6800 points, while crossing 7075 is important to strengthen the bullish trend.
Technical Summary The index closed at 7004 points in Nov 2017. General Trend / Monthly: The index is still holding above the most prominent support levels of 6800 points, which represents the support area for the simple monthly average SMA (20 months). While we currently expect the index to complete the upside movement again to position above 38.2 Fibonacci level of the last bearish wave at 7075 points. The outlook on the medium term remains stable for future movement as the market was capable to hold its important monthly averages. We expect higher liquidity supported by the positive earnings and higher oil prices, as well as overpassing the current horizontal level.
Positive crossings of averages
The MACD indicator trends positively after crossing the index line, which may increase buying pressures after holding above its main monthly average during November. The current level at 6800 points represents the average of the Bollinger Index and is the safety valve for stability in the medium term. Estimations: It is likely that the level of 6800 points continue as an important main support level for a later uptrend, and we do not expect to see a monthly close below it. Holding above a monthly average provide basis for a bullish wave targeting resistance levels at 7075 - 7600 points. While we expect the monthly close below 6800 point could raise the profit taking levels to 6400 points.
Source: Bloomberg
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3
MONTHLY SAUDI TECHNICAL REPORT TECHNICAL December 04, 2017
WEEKLY
23 November 2014
Brent: Supported by the agreement to extend production cuts, Brent reached its highest levels since 2016; whereas, we expect profit taking at US$ 67.0/barrel. weekly movement
Technical Summary The index closed at US$ 63.57 per barrel for Nov. Monthly movement, Brent Index held steady above the previous peaks at US$ 58.40/barrel (January 2017) and continues to hold above its main monthly averages. In addition to the positive impact of extending the production cut agreement until the end of 2018, prices reacted positively to the noticeable drop in US inventory. We expect that the current Brent price movement could target US$ 67.0 levels.
Technical model break area
Brent index continues to move positively amidst the positive interactions of the main monthly averages since crossing for the first time earlier this year, after the first break of the averages by the end of 2014.
USD 108
The monthly indicator MACD positively moves beyond the signal line, the convergence of linear signal and MACD indicate faster positive movement and uptrend momentum.
Positive crossings
Monthly movement
Weekly movement: The index is still moving up after exceeding the broadening pattern mentioned in the chart and crossed the second target at US$ 61.70. Short-term outlook for the oil price movement is more positive after exceeding the previous peak and is expected to achieve new highs. Estimations: Bullish trend is expected to continue towards US$ 67.0 and return to short term profit taking. After which, we expect testing the main resistance levels at US$ 67.00 - 72.40. The main support levels remain at US$ 58.40 - 61.70 consecutively.
Source: Bloomberg
All rights reserved | Disclaimer: Please refer to the Disclaimer on the last page
4
MONTHLY SAUDI TECHNICAL REPORT TECHNICAL December 04, 2017
WEEKLY
23 November 2014
Gold / Weekly: continued its horizontal movement close to the main support level of US$ 1265/ounce, which is expected to be tested further before any upward movement.
Technical Summary The index closed at US$ 1280.6 per ounce.
weekly movement
Considering the weekly movement, the Gold price index was able to hold above the levels mentioned earlier at US$ 1265/Ounce, marking the most important support levels for the current upward trend. Any profit taking is expected to retest the mentioned level at US$ 1265/Ounce, and then to regain the uptrend. The weekly RSI indicator returned to test the current uptrend line, thus raising expectations of an inverse trend on the short-term. We expect the conservative policies of the Fed to raise the US interest rate could be a catalyst for the Gold movement.
Upward tend support area USD 1265
Monthly movement, the index continued movement above its 20 and 10 month averages SMA for the ninth consecutive month. We expect that continued monthly movement above $1265 to add more support for future Gold prices. Estimations: We expect the end of profit taking at support level of US$ 1265, then return to test the important weekly resistance levels at US$ 1320 - US$ 1355/ounce. We expect that breaking the USD 1355 level will provide room for a strong upward movement targeting $1450 in the medium run. While we expect break below US$ 1265 levels may raise the level of caution with the cancellation of the positive scenario mentioned for the movement of gold.
Source: Bloomberg
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5
MONTHLY SAUDI TECHNICAL REPORT TECHNICAL December 04, 2017
WEEKLY
23 November 2014
THE USD INDEX: The inverted hammer candlestick suggest an end of profit taking at 92.60, to target 94.90 - 96.00 points.
Technical Summary The USD index closed at 92.88 points
Looking at the weekly movement, the dollar index took a short bearish trend reaching 61.8% level of the Fibonacci indicator from the last bullish wave. The most important weekly averages SMA intersected positively for the first time since March 2017, which ease pressures on the major dollar movement for the coming period. Our estimations indicate a possible end of profit taking at the current levels with an extended bullish wave targeting 94.90 - 96.0 levels over the short upcoming period. Though improvements in US economic indicators last month, the anticipated tax law and elevated political risks reflected negatively on the Dollar movement recently. Furthermore, the monetary policies of the new Fed board in the US may contribute to the formation of the dollar movement for the next period. It is noteworthy that next February marks the end of the current US Fed Reserve president mandate.
Bounce back area
The weekly MACD indicator is still moving positively after the signal line, which may contribute to an uptrend in the near future. Estimations: We expect the dollar index to recover from the current area after testing 61.8% Fibonacci levels at 92.60 points. Thus, we expect it to take a bullish trend towards 94.90 – 96.00 points due to the improved technical indicators and positive intersections of the weekly averages.
Source: Bloomberg
All rights reserved | Disclaimer: Please refer to the Disclaimer on the last page
6
SAUDI TECHNICAL WEEKLY 23 November 2014
Research Division
Head of Research
Analyst
Analyst
Talha Nazar
Jassim Al-Jubran
Muhanad Al-Odan
+966 11 2256250
+966 11 2256248
+966 11 2256115
[email protected]
[email protected]
[email protected]
Analyst Analyst Sultan Al Kadi, CAIA Waleed Al-Jubayr +966 11 2256374 +966 11 2256146 [email protected] [email protected]
Brokerage And Investment Centers Division
General Manager - Brokerage Division
AGM-Head of international and institutional brokerage
Mr.Ala’a Al-Yousef
LuayJawad Al-Motawa
+966 11 2256060
+966 11 2256277
[email protected]
[email protected]
Regional Manager - West and South Regions
Sales And Investment Centers Central Region Manager
Mansour Hamad Al-Shuaibi +966 12 6618443
[email protected]
Sultan Ibrahim AL-Mutawa +966 11 2256364 [email protected]
All rights reserved | Disclaimer: Please refer to the Disclaimer on the last page
Area Manager –Qassim & Eastern Province Abdullah Al-Rahit +966 16 3617547
[email protected]
7
SAUDI TECHNICAL WEEKLY 23 November 2014
Disclaimer The purpose of producing this report is to present a general view on the company/economic sector/economic subject under research, and not to recommend a buy/sell/hold for any security or any other assets. Based on that, this report does not take into consideration the specific financial position of every investor and/or his/her risk appetite in relation to investing in the security or any other assets, and hence, may not be suitable for all clients depending on their financial position and their ability and willingness to undertake risks. It is advised that every potential investor seek professional advice from several sources concerning investment decision and should study the impact of such decisions on his/her financial/legal/tax position and other concerns before getting into such investments or liquidate them partially or fully. The market of stocks, bonds, macroeconomic or microeconomic variables are of a volatile nature and could witness sudden changes without any prior warning, therefore, the investor in securities or other assets might face some unexpected risks and fluctuations. All the information, views and expectations and fair values or target prices contained in this report have been compiled or arrived at by AlJazira Capital from sources believed to be reliable, but AlJazira Capital has not independently verified the contents obtained from these sources and such information may be condensed or incomplete. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information and opinions contained in this report. Aljazira Capital shall not be liable for any loss as that may arise from the use of this report or its contents or otherwise arising in connection therewith. The past performance of any investment is not an indicator of future performance. Any financial projections, fair value estimates or price targets and statements regarding future prospects contained in this document may not be realized. The value of the security or any other assets or the return from them might increase or decrease. Any change in currency rates may have a positive or negative impact on the value/return on the stock or securities mentioned in the report. The investor might get an amount less than the amount invested in some cases. Some stocks or securities maybe, by nature, of low volume/trades or may become like that unexpectedly in special circumstances and this might increase the risk on the investor. Some fees might be levied on some investments in securities. This report has been written by professional employees in Aljazira Capital, and they undertake that neither them, nor their wives or children hold positions directly in any listed shares or securities contained in this report during the time of publication of this report, however, The authors and/or their wives/children of this document may own securities in funds open to the public that invest in the securities mentioned in this document as part of a diversified portfolio over which they have no discretion. This report has been produced independently and separately by the Research Division at Aljazira Capital and no party (in-house or outside) who might have interest whether direct or indirect have seen the contents of this report before its publishing, except for those whom corporate positions allow them to do so, and/or third-party persons/institutions who signed a non-disclosure agreement with Aljazira Capital. Funds managed by Aljazira Capital and its subsidiaries for third parties may own the securities that are the subject of this document. Aljazira Capital or its subsidiaries may own securities in one or more of the aforementioned companies, and/or indirectly through funds managed by third parties. The Investment Banking division of Aljazira Capital maybe in the process of soliciting or executing fee earning mandates for companies that is either the subject of this document or is mentioned in this document. One or more of Aljazira Capital board members or executive managers could be also a board member or member of the executive management at the company or companies mentioned in this report, or their associated companies. No part of this report may be reproduced whether inside or outside the Kingdom of Saudi Arabia without the written permission of Aljazira Capital. Persons who receive this report should make themselves aware, of and adhere to, any such restrictions. By accepting this report, the recipient agrees to be bound by the foregoing limitations.
All rights reserved | Disclaimer: Please refer to the Disclaimer on the last page
8
MONTHLY SAUDI TECHNICAL REPORT TECHNICAL December 04, 2017
WEEKLY
23 November 2014
Tadawul; Weekly Index: For the index to regain its bullish trend, it needs to exceed 7250 level, while 6800 points is the main support level over the upcoming period.
Technical Summary The index closed at 7089 points.
7250
Main Support Level at 6800 points
Source: Bloomberg
All rights reserved | Disclaimer: Please refer to the Disclaimer on the last page
General Trend: From the weekly movement, the Saudi market index managed to hold around the most important medium term support at 6800 level. We expect the positive impact from diminishing geopolitical concerns in the region to have reflected positively on the index, along with the fight against corruption and the updates on the situation in Yemen. Market outlook remained positive after a good set of quarterly results and the increase in oil prices. Where current areas around 6800 points continue as the most important support for the index in the medium term, (6800 is the previous peak area for the month of April 2016, which the index exceeded it in December 2016). Moreover, it’s expected that the Tadawul Index is in the process of establishing a third upward wave that started at 6800 level and targeting 8350 points on the medium run. More support to the Index came after the recent increase in oil prices, after OPEC members and Russia agreed to extend the production cut until the end of 2018. The technical indicators could possibly continue the up-trend and test the important resistance level at 7250 points. The Index held and rebounded from the Bollinger Indicator low levels with a strong consolidation, which is likely to form purchasing pressures during the coming period. •Estimations: The outlook remains stable on the medium term, with maintaining 6800 levels as support key, while the index is likely to return to complete the main upward trend towards the resistance levels for the next period at 7250 - 7580 points, respectively. Caution if the index falls below 6800 points and closes the week below.
2
MONTHLY SAUDI TECHNICAL REPORT TECHNICAL December 04, 2017
WEEKLY
23 November 2014
Tadawul/Monthly: The Index was able to rebound from its most significant monthly averages at 6800 points, while crossing 7075 is important to strengthen the bullish trend.
Technical Summary The index closed at 7004 points in Nov 2017. General Trend / Monthly: The index is still holding above the most prominent support levels of 6800 points, which represents the support area for the simple monthly average SMA (20 months). While we currently expect the index to complete the upside movement again to position above 38.2 Fibonacci level of the last bearish wave at 7075 points. The outlook on the medium term remains stable for future movement as the market was capable to hold its important monthly averages. We expect higher liquidity supported by the positive earnings and higher oil prices, as well as overpassing the current horizontal level.
Positive crossings of averages
The MACD indicator trends positively after crossing the index line, which may increase buying pressures after holding above its main monthly average during November. The current level at 6800 points represents the average of the Bollinger Index and is the safety valve for stability in the medium term. Estimations: It is likely that the level of 6800 points continue as an important main support level for a later uptrend, and we do not expect to see a monthly close below it. Holding above a monthly average provide basis for a bullish wave targeting resistance levels at 7075 - 7600 points. While we expect the monthly close below 6800 point could raise the profit taking levels to 6400 points.
Source: Bloomberg
All rights reserved | Disclaimer: Please refer to the Disclaimer on the last page
3
MONTHLY SAUDI TECHNICAL REPORT TECHNICAL December 04, 2017
WEEKLY
23 November 2014
Brent: Supported by the agreement to extend production cuts, Brent reached its highest levels since 2016; whereas, we expect profit taking at US$ 67.0/barrel. weekly movement
Technical Summary The index closed at US$ 63.57 per barrel for Nov. Monthly movement, Brent Index held steady above the previous peaks at US$ 58.40/barrel (January 2017) and continues to hold above its main monthly averages. In addition to the positive impact of extending the production cut agreement until the end of 2018, prices reacted positively to the noticeable drop in US inventory. We expect that the current Brent price movement could target US$ 67.0 levels.
Technical model break area
Brent index continues to move positively amidst the positive interactions of the main monthly averages since crossing for the first time earlier this year, after the first break of the averages by the end of 2014.
USD 108
The monthly indicator MACD positively moves beyond the signal line, the convergence of linear signal and MACD indicate faster positive movement and uptrend momentum.
Positive crossings
Monthly movement
Weekly movement: The index is still moving up after exceeding the broadening pattern mentioned in the chart and crossed the second target at US$ 61.70. Short-term outlook for the oil price movement is more positive after exceeding the previous peak and is expected to achieve new highs. Estimations: Bullish trend is expected to continue towards US$ 67.0 and return to short term profit taking. After which, we expect testing the main resistance levels at US$ 67.00 - 72.40. The main support levels remain at US$ 58.40 - 61.70 consecutively.
Source: Bloomberg
All rights reserved | Disclaimer: Please refer to the Disclaimer on the last page
4
MONTHLY SAUDI TECHNICAL REPORT TECHNICAL December 04, 2017
WEEKLY
23 November 2014
Gold / Weekly: continued its horizontal movement close to the main support level of US$ 1265/ounce, which is expected to be tested further before any upward movement.
Technical Summary The index closed at US$ 1280.6 per ounce.
weekly movement
Considering the weekly movement, the Gold price index was able to hold above the levels mentioned earlier at US$ 1265/Ounce, marking the most important support levels for the current upward trend. Any profit taking is expected to retest the mentioned level at US$ 1265/Ounce, and then to regain the uptrend. The weekly RSI indicator returned to test the current uptrend line, thus raising expectations of an inverse trend on the short-term. We expect the conservative policies of the Fed to raise the US interest rate could be a catalyst for the Gold movement.
Upward tend support area USD 1265
Monthly movement, the index continued movement above its 20 and 10 month averages SMA for the ninth consecutive month. We expect that continued monthly movement above $1265 to add more support for future Gold prices. Estimations: We expect the end of profit taking at support level of US$ 1265, then return to test the important weekly resistance levels at US$ 1320 - US$ 1355/ounce. We expect that breaking the USD 1355 level will provide room for a strong upward movement targeting $1450 in the medium run. While we expect break below US$ 1265 levels may raise the level of caution with the cancellation of the positive scenario mentioned for the movement of gold.
Source: Bloomberg
All rights reserved | Disclaimer: Please refer to the Disclaimer on the last page
5
MONTHLY SAUDI TECHNICAL REPORT TECHNICAL December 04, 2017
WEEKLY
23 November 2014
THE USD INDEX: The inverted hammer candlestick suggest an end of profit taking at 92.60, to target 94.90 - 96.00 points.
Technical Summary The USD index closed at 92.88 points
Looking at the weekly movement, the dollar index took a short bearish trend reaching 61.8% level of the Fibonacci indicator from the last bullish wave. The most important weekly averages SMA intersected positively for the first time since March 2017, which ease pressures on the major dollar movement for the coming period. Our estimations indicate a possible end of profit taking at the current levels with an extended bullish wave targeting 94.90 - 96.0 levels over the short upcoming period. Though improvements in US economic indicators last month, the anticipated tax law and elevated political risks reflected negatively on the Dollar movement recently. Furthermore, the monetary policies of the new Fed board in the US may contribute to the formation of the dollar movement for the next period. It is noteworthy that next February marks the end of the current US Fed Reserve president mandate.
Bounce back area
The weekly MACD indicator is still moving positively after the signal line, which may contribute to an uptrend in the near future. Estimations: We expect the dollar index to recover from the current area after testing 61.8% Fibonacci levels at 92.60 points. Thus, we expect it to take a bullish trend towards 94.90 – 96.00 points due to the improved technical indicators and positive intersections of the weekly averages.
Source: Bloomberg
All rights reserved | Disclaimer: Please refer to the Disclaimer on the last page
6
SAUDI TECHNICAL WEEKLY 23 November 2014
Research Division
Head of Research
Analyst
Analyst
Talha Nazar
Jassim Al-Jubran
Muhanad Al-Odan
+966 11 2256250
+966 11 2256248
+966 11 2256115
[email protected]
[email protected]
[email protected]
Analyst Analyst Sultan Al Kadi, CAIA Waleed Al-Jubayr +966 11 2256374 +966 11 2256146 [email protected] [email protected]
Brokerage And Investment Centers Division
General Manager - Brokerage Division
AGM-Head of international and institutional brokerage
Mr.Ala’a Al-Yousef
LuayJawad Al-Motawa
+966 11 2256060
+966 11 2256277
[email protected]
[email protected]
Regional Manager - West and South Regions
Sales And Investment Centers Central Region Manager
Mansour Hamad Al-Shuaibi +966 12 6618443
[email protected]
Sultan Ibrahim AL-Mutawa +966 11 2256364 [email protected]
All rights reserved | Disclaimer: Please refer to the Disclaimer on the last page
Area Manager –Qassim & Eastern Province Abdullah Al-Rahit +966 16 3617547
[email protected]
7
SAUDI TECHNICAL WEEKLY 23 November 2014
Disclaimer The purpose of producing this report is to present a general view on the company/economic sector/economic subject under research, and not to recommend a buy/sell/hold for any security or any other assets. Based on that, this report does not take into consideration the specific financial position of every investor and/or his/her risk appetite in relation to investing in the security or any other assets, and hence, may not be suitable for all clients depending on their financial position and their ability and willingness to undertake risks. It is advised that every potential investor seek professional advice from several sources concerning investment decision and should study the impact of such decisions on his/her financial/legal/tax position and other concerns before getting into such investments or liquidate them partially or fully. The market of stocks, bonds, macroeconomic or microeconomic variables are of a volatile nature and could witness sudden changes without any prior warning, therefore, the investor in securities or other assets might face some unexpected risks and fluctuations. All the information, views and expectations and fair values or target prices contained in this report have been compiled or arrived at by AlJazira Capital from sources believed to be reliable, but AlJazira Capital has not independently verified the contents obtained from these sources and such information may be condensed or incomplete. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information and opinions contained in this report. Aljazira Capital shall not be liable for any loss as that may arise from the use of this report or its contents or otherwise arising in connection therewith. The past performance of any investment is not an indicator of future performance. Any financial projections, fair value estimates or price targets and statements regarding future prospects contained in this document may not be realized. The value of the security or any other assets or the return from them might increase or decrease. Any change in currency rates may have a positive or negative impact on the value/return on the stock or securities mentioned in the report. The investor might get an amount less than the amount invested in some cases. Some stocks or securities maybe, by nature, of low volume/trades or may become like that unexpectedly in special circumstances and this might increase the risk on the investor. Some fees might be levied on some investments in securities. This report has been written by professional employees in Aljazira Capital, and they undertake that neither them, nor their wives or children hold positions directly in any listed shares or securities contained in this report during the time of publication of this report, however, The authors and/or their wives/children of this document may own securities in funds open to the public that invest in the securities mentioned in this document as part of a diversified portfolio over which they have no discretion. This report has been produced independently and separately by the Research Division at Aljazira Capital and no party (in-house or outside) who might have interest whether direct or indirect have seen the contents of this report before its publishing, except for those whom corporate positions allow them to do so, and/or third-party persons/institutions who signed a non-disclosure agreement with Aljazira Capital. Funds managed by Aljazira Capital and its subsidiaries for third parties may own the securities that are the subject of this document. Aljazira Capital or its subsidiaries may own securities in one or more of the aforementioned companies, and/or indirectly through funds managed by third parties. The Investment Banking division of Aljazira Capital maybe in the process of soliciting or executing fee earning mandates for companies that is either the subject of this document or is mentioned in this document. One or more of Aljazira Capital board members or executive managers could be also a board member or member of the executive management at the company or companies mentioned in this report, or their associated companies. No part of this report may be reproduced whether inside or outside the Kingdom of Saudi Arabia without the written permission of Aljazira Capital. Persons who receive this report should make themselves aware, of and adhere to, any such restrictions. By accepting this report, the recipient agrees to be bound by the foregoing limitations.
All rights reserved | Disclaimer: Please refer to the Disclaimer on the last page
8
