monthly technical report - Aljazira Capital
MONTHLY TECHNICAL REPORT MAY 07, 2017
The purpose of producing this report is to present a general view on the market, equities and commodities 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, no information in this analysis should be considered as being business, financial and legal advice.
MONTHLY SAUDI TECHNICAL REPORT TECHNICAL MAY 07, 2017
WEEKLY
23 November 2014
Tadawul; Weekly : The outlook for Tadawul index remains stable as it holds above 6700
Technical Summary The index closed at 6924 points. Trend Overview/weekly: For the fourth consecutive month, the Saudi market moved inside a Falling Wedge, pressured by the fall in oil prices over the past few days, even though improved 1Q17 results for many of the listed companies. There is a possibility of another dip to end the falling streak pattern before taking an upward trend. Our forecasts indicate a maximum fall to around 6700 support level would be difficult to break, since the current pattern is continued trend, and we expect the index to bounce above 7035 by weekly closure, marking the end of the current horizontal movement.
•
Also, the index is moving below 10 & 20 weeks average, which forms pressure to the movement of the index over the next period.
•
The RSI indicator is trending lower towards the (50) level, which may add selling pressures ones broken. The MACD indicator is trending below the index line adding pressure to the movement of the index.
•
Estimations: The outlook for Tadawul index remains stable as it holds above 6700 points. A final down trend is possible toward support levels at 6825 – 6700 points consecutively. Most important upward break point at 7035 and then to7290 points.
Daily Movement
Source: Bloomberg
All rights reserved | Disclaimer: Please refer to the Disclaimer on the last page
2
MONTHLY SAUDI TECHNICAL REPORT TECHNICAL MAY 07, 2017
WEEKLY
23 November 2014
Tadawul Index (Monthly): While most technical indicators are stable, the index is expected to test the main monthly Moving Average at 6700 points
Positive averages crossings
Source: Bloomberg
All rights reserved | Disclaimer: Please refer to the Disclaimer on the last page
Technical Summary
The index closed at 6924 points.
•
General Trend: Based on the index movement during the month, it failed to hold above the important resistance level of 7075 for the fourth month represents (38.2% Fibonacci) from the last downtrend. Closing the month above that level is important to end the horizontal movement and continue the rising trend as it builds momentum after positive crossing at the important monthly average of 6700 points. On the medium term, the general perspective remains positive as the market was capable to hold its important monthly moving averages lines.
•
The MACD indicator trends positively after crossing the index line, which may increase buying pressures after testing the important monthly averages. Lower liquidity is the market is considered normal during horizontal movement, as the market reverses the main uptrend started at 5327 points.
•
It is possible that the positive interactions of the main monthly averages provide market momentum on the medium term, so that the interactions area becomes an important support level unlikely to break. Closing the month above 7075 will provide ground for a strong uptrend.
•
Estimations: Current pressures could force the index to test the important level of 6700 points and form a support level for a later uptrend. We also believe that monthly average holding above 7075 would provide an uptrend towards resistance levels between 7610 to 8150 points.
3
MONTHLY SAUDI TECHNICAL REPORT TECHNICAL MAY 07, 2017
WEEKLY
23 November 2014
Brent Index: Expect strong rebounds from support levels of average(20)months at 47 USD.
Technical Summary
The index closed at $ 49.10 per barrel.
Looking at the monthly movement, Brent Index rebounded strongly from simple moving average levels for 20 months at 47 USD/ barrel, after pressures from increased US shale oil supplies as well as Libyan supplies. However, Brent Index still steady over the main monthly averages lines since last penetration by the end of last November. The monthly averages are now considered the most important support levels. On a monthly movement, the level of 47.0 remains a major support level for positive average intercepts, and we do not expect it to beak lower. We also warn that a monthly closing below USD47.0 could end the bullish path.
MACD indicator is still moving positively after the signal line crossed the indicator, which may contribute in increasing purchasing pressure on the index movement
Weekly movement: The index was able to trend above the ascending channel after finding an important support area at $ 46.50 which represents (38.2%Fibonacci ) of the last bullish wave. The overall impression of the oil movement over the med-term remains stable with most of the technical indicators intact and maintaining the MA 20-month support at $ 47.0.
Estimations: The outlook remains stable as it holds above 47.0 USD Where the resistance levels will remain at USD 51.70 - 56.0 . While the supporting area remains at USD 42.5047.0 consecutively.
weekly movement
Monthly movement
Source: Bloomberg
All rights reserved | Disclaimer: Please refer to the Disclaimer on the last page
4
MONTHLY SAUDI TECHNICAL REPORT TECHNICAL MAY 07, 2017
WEEKLY
23 November 2014
Gold / Weekly: Selling pressures are facing Gold with the current trend of tax reductions in the US, USD 1225/Ounce is the most significant current support level.
Technical Summary
The index closed at USD1228 per ounce
On the weekly movement, the gold price index returned to break the downtrend that was breached during the month of April (the blue line). Stability below the mentioned level with breaking the levels of weekly MA(20) at USD 1225 may raise pressure to reach USD1188 per ounce In the medium term.
The weekly RSI indicator also in a bearish trend after failing to consolidate above the 50 area, thus raising expectations of a bearish trend over the next short period. Where we believe that the Current orientation in the United States to reduce the corporate tax rate is a pressure factor on the movement of gold and warn of breaking the levels of USD 1225 with weekly closing below.
On the monthly movement, the index returned to breakdown the 10-month MA at USD1243 after surpassing it during the month of April. We also expect that any return to the monthly close above USD 1243 will restore the movement of gold to the positive and raise the momentum for the next period.
Estimations: With the current technical data, we expect that a lack of consolidation above USD1225 could pave the way for continued bearish action to achieve gold support levels at USD 1210 – 1188 respectively. While the resistance levels remain the most important weekly movement at USD 1230 – 1255.
Daily Movement
Source: Bloomberg
All rights reserved | Disclaimer: Please refer to the Disclaimer on the last page
5
MONTHLY SAUDI TECHNICAL REPORT TECHNICAL MAY 07, 2017
WEEKLY
23 November 2014
USD INDEX Dollar breaks down the most important support levels at 98.70 points, breaking down raises signals for caution.
the weekly movement of Bollinger Bands
Technical Summary
The USD index closed at 98.65 points
On the weekly movement, the dollar index failed to maintain its horizontal movement within a bearish wedge pattern, as the index broke the previously mentioned area at 98.70 points with the weekly close below it, which was considered an important support area. The dollar index also moved in the negative intercept highlights weekly averages, which adds some pressure on the movement of the dollar for the coming period. Our expectations are likely to extend the bearish wave from current levels as the mentioned pattern turns into a reversal pattern for the previous track.
We also note that the US central bank kept interest rates stable at 1% over the past week as the US economic data diverged. While expectations indicate backing off from 3 interest rate increments during the year 2017, in light of the conflict with the economic policy by the current president of the United States. We also note that the US Federal Reserve raised the interest rate by 0.25% by the end of March, which in turn supported the movement of the dollar during the previous period.
Factors of weakness are clear on the weekly MACD indicator after trending below the index line.
Estimations: The dollar index broke key support areas at 98.70 point (according to the chart). We expect that current weekly closing below these levels may push to more profit booking towards the support levels of 96.0 94.50 points. The most important resistance level for the index at 101.30 - 99.50
Negative intersection of averages
94.70 Area break level
Source: Bloomberg
All rights reserved | Disclaimer: Please refer to the Disclaimer on the last page
6
SAUDI TECHNICAL WEEKLY 23 November 2014
Research Division
Acting 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 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 2256000
+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
The purpose of producing this report is to present a general view on the market, equities and commodities 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, no information in this analysis should be considered as being business, financial and legal advice.
MONTHLY SAUDI TECHNICAL REPORT TECHNICAL MAY 07, 2017
WEEKLY
23 November 2014
Tadawul; Weekly : The outlook for Tadawul index remains stable as it holds above 6700
Technical Summary The index closed at 6924 points. Trend Overview/weekly: For the fourth consecutive month, the Saudi market moved inside a Falling Wedge, pressured by the fall in oil prices over the past few days, even though improved 1Q17 results for many of the listed companies. There is a possibility of another dip to end the falling streak pattern before taking an upward trend. Our forecasts indicate a maximum fall to around 6700 support level would be difficult to break, since the current pattern is continued trend, and we expect the index to bounce above 7035 by weekly closure, marking the end of the current horizontal movement.
•
Also, the index is moving below 10 & 20 weeks average, which forms pressure to the movement of the index over the next period.
•
The RSI indicator is trending lower towards the (50) level, which may add selling pressures ones broken. The MACD indicator is trending below the index line adding pressure to the movement of the index.
•
Estimations: The outlook for Tadawul index remains stable as it holds above 6700 points. A final down trend is possible toward support levels at 6825 – 6700 points consecutively. Most important upward break point at 7035 and then to7290 points.
Daily Movement
Source: Bloomberg
All rights reserved | Disclaimer: Please refer to the Disclaimer on the last page
2
MONTHLY SAUDI TECHNICAL REPORT TECHNICAL MAY 07, 2017
WEEKLY
23 November 2014
Tadawul Index (Monthly): While most technical indicators are stable, the index is expected to test the main monthly Moving Average at 6700 points
Positive averages crossings
Source: Bloomberg
All rights reserved | Disclaimer: Please refer to the Disclaimer on the last page
Technical Summary
The index closed at 6924 points.
•
General Trend: Based on the index movement during the month, it failed to hold above the important resistance level of 7075 for the fourth month represents (38.2% Fibonacci) from the last downtrend. Closing the month above that level is important to end the horizontal movement and continue the rising trend as it builds momentum after positive crossing at the important monthly average of 6700 points. On the medium term, the general perspective remains positive as the market was capable to hold its important monthly moving averages lines.
•
The MACD indicator trends positively after crossing the index line, which may increase buying pressures after testing the important monthly averages. Lower liquidity is the market is considered normal during horizontal movement, as the market reverses the main uptrend started at 5327 points.
•
It is possible that the positive interactions of the main monthly averages provide market momentum on the medium term, so that the interactions area becomes an important support level unlikely to break. Closing the month above 7075 will provide ground for a strong uptrend.
•
Estimations: Current pressures could force the index to test the important level of 6700 points and form a support level for a later uptrend. We also believe that monthly average holding above 7075 would provide an uptrend towards resistance levels between 7610 to 8150 points.
3
MONTHLY SAUDI TECHNICAL REPORT TECHNICAL MAY 07, 2017
WEEKLY
23 November 2014
Brent Index: Expect strong rebounds from support levels of average(20)months at 47 USD.
Technical Summary
The index closed at $ 49.10 per barrel.
Looking at the monthly movement, Brent Index rebounded strongly from simple moving average levels for 20 months at 47 USD/ barrel, after pressures from increased US shale oil supplies as well as Libyan supplies. However, Brent Index still steady over the main monthly averages lines since last penetration by the end of last November. The monthly averages are now considered the most important support levels. On a monthly movement, the level of 47.0 remains a major support level for positive average intercepts, and we do not expect it to beak lower. We also warn that a monthly closing below USD47.0 could end the bullish path.
MACD indicator is still moving positively after the signal line crossed the indicator, which may contribute in increasing purchasing pressure on the index movement
Weekly movement: The index was able to trend above the ascending channel after finding an important support area at $ 46.50 which represents (38.2%Fibonacci ) of the last bullish wave. The overall impression of the oil movement over the med-term remains stable with most of the technical indicators intact and maintaining the MA 20-month support at $ 47.0.
Estimations: The outlook remains stable as it holds above 47.0 USD Where the resistance levels will remain at USD 51.70 - 56.0 . While the supporting area remains at USD 42.5047.0 consecutively.
weekly movement
Monthly movement
Source: Bloomberg
All rights reserved | Disclaimer: Please refer to the Disclaimer on the last page
4
MONTHLY SAUDI TECHNICAL REPORT TECHNICAL MAY 07, 2017
WEEKLY
23 November 2014
Gold / Weekly: Selling pressures are facing Gold with the current trend of tax reductions in the US, USD 1225/Ounce is the most significant current support level.
Technical Summary
The index closed at USD1228 per ounce
On the weekly movement, the gold price index returned to break the downtrend that was breached during the month of April (the blue line). Stability below the mentioned level with breaking the levels of weekly MA(20) at USD 1225 may raise pressure to reach USD1188 per ounce In the medium term.
The weekly RSI indicator also in a bearish trend after failing to consolidate above the 50 area, thus raising expectations of a bearish trend over the next short period. Where we believe that the Current orientation in the United States to reduce the corporate tax rate is a pressure factor on the movement of gold and warn of breaking the levels of USD 1225 with weekly closing below.
On the monthly movement, the index returned to breakdown the 10-month MA at USD1243 after surpassing it during the month of April. We also expect that any return to the monthly close above USD 1243 will restore the movement of gold to the positive and raise the momentum for the next period.
Estimations: With the current technical data, we expect that a lack of consolidation above USD1225 could pave the way for continued bearish action to achieve gold support levels at USD 1210 – 1188 respectively. While the resistance levels remain the most important weekly movement at USD 1230 – 1255.
Daily Movement
Source: Bloomberg
All rights reserved | Disclaimer: Please refer to the Disclaimer on the last page
5
MONTHLY SAUDI TECHNICAL REPORT TECHNICAL MAY 07, 2017
WEEKLY
23 November 2014
USD INDEX Dollar breaks down the most important support levels at 98.70 points, breaking down raises signals for caution.
the weekly movement of Bollinger Bands
Technical Summary
The USD index closed at 98.65 points
On the weekly movement, the dollar index failed to maintain its horizontal movement within a bearish wedge pattern, as the index broke the previously mentioned area at 98.70 points with the weekly close below it, which was considered an important support area. The dollar index also moved in the negative intercept highlights weekly averages, which adds some pressure on the movement of the dollar for the coming period. Our expectations are likely to extend the bearish wave from current levels as the mentioned pattern turns into a reversal pattern for the previous track.
We also note that the US central bank kept interest rates stable at 1% over the past week as the US economic data diverged. While expectations indicate backing off from 3 interest rate increments during the year 2017, in light of the conflict with the economic policy by the current president of the United States. We also note that the US Federal Reserve raised the interest rate by 0.25% by the end of March, which in turn supported the movement of the dollar during the previous period.
Factors of weakness are clear on the weekly MACD indicator after trending below the index line.
Estimations: The dollar index broke key support areas at 98.70 point (according to the chart). We expect that current weekly closing below these levels may push to more profit booking towards the support levels of 96.0 94.50 points. The most important resistance level for the index at 101.30 - 99.50
Negative intersection of averages
94.70 Area break level
Source: Bloomberg
All rights reserved | Disclaimer: Please refer to the Disclaimer on the last page
6
SAUDI TECHNICAL WEEKLY 23 November 2014
Research Division
Acting 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 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 2256000
+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
