TASI 8,214.85 Volume Value Trades 0.43% 220.5mn SAR5,582.3mn 140,308 Research Department research@alrajhi-capital.com Tel: +966 1 211 9332/ Fax: +966 1 2119422 Market Commentary Global markets end lower US stocks fell amid the release of minutes of FOMC s July meeting, which indicated that the Fed officials support the stimulus cuts this year provided the US economy shows signs of improvement. However, there was lack of clarity regarding the exact timing of the tapering of the US$85bn per month bondby the National buying program. Meanwhile, the data released Association of Realtors showed that the existing home sales jumped 6.5% in July to an annual rate of 5.39 million units, more than the analysts forecast of 5.15 million. European stocks declined after concerns over tapering of the quantitative easing program intensified further. Asian markets are trading lower as US stimulus concerns outweighed the upbeat data of China s manufacturing sector. The preliminary HSBC China Manufacturing Purchasing Managers Index unexpectedly rose to 50.1 in August, as compared to a final reading of 47.7 in July. At 1:14 pm JST Nikkei 225 and Hang Seng are down 0.6% and 0.7% respectively. TASI Intra-day Movement 8,217 8,202 8,187 8,172 11:00 12:00 13:00 14:00 15:00 Source: Bloomberg Saudi Market Indices Index Close Change (%) MTD (%) YTD (%) Tadawul All Share Index 8,214.9 0.4 4.5 20.8 Banks & Financial Services 18,109.1-0.0 4.5 23.7 Petrochemical Industries 6,470.4 0.3 5.3 10.5 TASI moves above 8,200 TASI gained 0.4% to close at 8,214.9 on Wednesday. Eleven sectors closed in the green zone, while four sectors closed in the red. The Petrochemical sector and the Cement sector rose 0.3% each. Trading turnover decreased by 7.1% from Tuesday to SAR5.6bn on Wednesday. The market breadth was positive as out of 157 traded symbols, 97 stocks rose while 40 stocks declined. Market heavyweight SABIC remained unchanged, while Al Rajhi fell 0.3%. Trading favorite Alinma rose by 0.7%.. Outlook TASI is likely to open on a negative note amid weakness in the Asian markets. Technically, TASI faces resistancee at the 8,250 level. Cement 7,459.2 Retail 11,133.7 Energy & Utilities 4,861.4 Agriculture & Food Ind. 9,013.5 Telecom & IT 2,562.3 Insurance 1,187.7 Multi-Investment 3,625.5 Industrial Investment 6,741.9 Building & Construction 3,531.6 Real Estate Development 5,037.3 Transport 5,535.6 Media and Publishing 2,658.1 Hotel & Tourism 14,913.9 Source: Tadawul 0.3 6.0 23.0 1.8 3.9 48.3 0.8 2.3 1.5 1.8 7.4 36.8 0.8 4.3 18.4 0.0 1.7-12.8 0.6 2.9-1.9 0.3 4.2 6.8 0.7 4.1 25.2 1.0-1.2 50.6-0.8 8.1 13.8-0.1 0.0-8.6-0.0 9.3 105.6 GCC Indices Close 1D% WTD% MTD% YTD% Value Traded (USD mn) Exchange Mkt. Cap. (USD mn) P/E P/B Dividend Yield% Saudi Arabia 8,214.9 0.4 1.0 Qatar 10,065.2 0.2 1.8 Dubai 2,670.4 0.2 1.5 Abu Dhabi 3,921.0 0.5 1.0 Kuwait 8,101.6-0.3 0.1 Oman 6,903.9-0.3 1.0 Bahrain 1,199.9-0.2-0.1 3.8 20.8 1,488.5 433,461.3 3.7 20.4 112.2 150,663.2 3.2 64.6 179.1 65,751.1 1.9 49.0 52.7 112,453.3 0.4 36.5 77.6 110,945.4 3.9 19.8 20.1 23,927.5 0.4 12.6 1.3 21,939.4 17.1 2.1 3.6 12.7 1.8 4.6 15.5 1.1 3.0 11.1 1.4 4.6 19.9 1.3 3.5 11.4 1.7 4.0 8.4 0.9 4.0 Global Indices Performance Close 1D% DJ Industrial 14,897.55-0.7 S&P 500 1,642.80-0.6 Nikkei 225 13,424.33 0.2 Hang Seng 21,817.73-0.7 FTSE 100 6,390.84-1.0 CAC 40 4,015.09-0.3 WTD% YTD% Asset/Currency Performance Close 1D% WTD% YTD% -1.2 13.7 Gold(US$) 1,366.76-0.3-0.7-18.4-0.8 15.2 Silver(US$) 22.88-0.6-1.6-24.6-1.7 29.1 Crude Oil (Brent)(US$) 109.81-0.3-0.5 3.9-3.1-3.7 Euro(US$) 1.34-0.5 0.2 1.2-1.7 8.4 USD Index 81.21 0.4-0.1 1.8-2.6 10.3 JPY(US$) 97.68 0.4 0.2 12.6
Tadawul Market Overview Sector Turnover Sector Volume 18.7 101.8 167.6 4.4 0.6 4.2 455.0 698.9 24.1 36.9 340.3 465.3 753.7 13.5 12.2 30.8 169.5 469.0 372.2 410.5 9.8 12.7 13.8 719.1 323.2 117.5 34.3 8.8 7.6 6.7 Banks & Financial Services Petrochemical Industries Cement Retail Energy & Utilities Agriculture & Food Industries Telecommunication & Information Technology Insurance Multi-Investment Industrial Investment Building & Construction Real Estate Development Transport Media and Publishing Hotel & Tourism Top Gainers Company Volume Leaders Change % Volume (mn) Company Change % Volume (mn) Jazira Takaful 60.0 9.6 0.3 Alinma 15.0 0.7 32.5 Hotels 33.7 6.7 3.8 Atheeb Telecom 15.8 1.3 21.3 City Cement 28.1 6.0 2.8 Saudi Kayan 12.8 2.4 15.4 AlAbdullatif 47.0 5.6 0.6 ZAIN KSA 10.3 0.5 9.4 Arabian Shield 52.5 5.0 1.0 Dar Al Arkan 10.9 0.5 7.4 Source: Tadawul Top Losers Company Value Leaders Change % Volume (mn) Company Change % Value (mn) Bahri 22.5-1.8 1.4 Alinma 15.0 0.7 488.1 SAICO 51.8-1.4 0.2 Atheeb Telecom 15.8 1.3 345.8 SALAMA 52.8-1.4 0.2 SABIC 99.0 0.0 317.3 Al Alamiya 55.3-1.3 0.2 Etihad Etisalat 86.8 0.9 236.7 ALTAYYAR 93.3-1.3 0.3 Saudi Kayan 12.8 2.4 195.5 Source: Tadawul 52 Week New High / Low Stocks Consistently Gaining / Losing Over Last 3Sessions Company New High New Low Company Current Price 3 Days Change % 3 Days Avg. Volume (mn) Al Abdullatif Industrial Investment Co 47.7 47.7 Al Khaleej Training and Education Co 45.1 12.8 1.0 Al Khaleej Training and Education Co 45.7 45.7 Al Abdullatif Industrial Investment Co 47.0 10.3 0.7 Aldrees Petroleum and Transport Services 48.5 48.5 Wala'a Insurance 27.4-3.9 0.5 Arabian Cement 74.3 74.3 Allied Cooperative Insurance Group 37.9-3.8 0.3 Banque Saudi Fransi 35.9 35.9 Source: Data pertaining to all the tables in this page are taken from Tadawul Stock Exchange, Official Website ` 2
Tadawul Technical Watch After a marginal decline in the previous trading session, TASI tagged a new 52-week high and closed at 8,214.85. The index unsuccessfully chased the upper end of the price channel continuation chart pattern. Both the momentum indicators, RSI and MACD are pointing slightly higher indicating the continuation of buying interest. The volumes have almost remained constant in the last few trading sessions. TASI is likely to gain further if it breaches its resistance level at 8,250. Pivot Table Symbol TASI 8,253.99 8,234.42 8,203.52 8,183.95 8,153.05 Tadawul All Shares Index Stocks Closest to Resistance Company R1 R2 PP Company Stocks Closest to Support S1 S2 PP AXA Cooperative Insurance 45.10 45.17 45.23 45.03 Saudi Basic Industries Corp 99.00 98.83 98.67 99.17 Saudi Re for Cooperative Reinsurance Co 10.75 10.77 10.78 10.73 Kingdom Holding Co 17.75 17.72 17.68 17.78 National Petrochemical Co 21.95 22.00 22.05 21.95 Arab National Bank 33.10 33.03 32.97 33.17 Saudi Industrial Investment Group 27.70 27.77 27.83 27.63 National Industrialization Co 27.60 27.53 27.47 27.67 Saudi Arabian Fertilizer Co 152.25 152.67 153.08 152.08 Wataniya Insurance Co 95.25 95.00 94.75 95.50 Anaam International Holding Group Co 36.20 36.30 36.40 36.10 Qassim Cement/The 86.25 86.50 86.75 86.25 Al Mouwasat Medical Services Co 82.75 83.00 83.25 82.50 Al Rajhi Co for Co-operative Insurance 48.90 48.77 48.63 48.93 Al-Ahlia Cooperative Insurance 46.90 46.77 46.63 47.03 Gulf General Cooperative Insurance 44.90 44.77 44.63 44.93 Dar Al Arkan Real Estate Development Co 10.85 10.88 10.92 10.82 Alahli Takaful Co 55.00 54.83 54.67 55.17 Southern Province Cement Co 107.00 107.33 107.67 106.67 Samba Financial Group 54.50 54.33 54.17 54.67 Source: Tadawul ` 3
Tadawul Technical Watch SABIC remained unchanged at SAR99.00 and closed with a gravestone doji candle stick pattern. The stock has formed the price channel continuation chart pattern. After penetrating the overbought zone, the RSI has consolidated, indicating inactivity at the current level. The other oscillator MACD is still moving higher. SABIC is likely to consolidate further with a negative bias. SABIC 99.67 99.33 99.17 98.83 98.67 Saudi Basic Industries Corp. STC rose and continued to make higher tops. The stock has formed a short-term rectangular chart pattern. Both the oscillators RSI and MACD are in uptrend mode, supporting the bullish outlook. We believe STC will gain further if it decisively breaches resistance at the SAR43.00 level. STC 43.37 43.13 42.77 42.53 42.17 Saudi Telecom Co. ` 4
Tadawul Technical Watch After downfall in the previous trading session, Al Rajhi closed with a gravestone doji candle stick pattern and rested near its support level at SAR80.00. The momentum indicator RSI is poised to retreat from the overbought territory indicating the continuation of selling pressure. The other oscillator MACD is moving sideways. Al Rajhi is likely to decline if it fails to sustain at the SAR80.00 support level. Al Rajhi 80.83 80.42 80.08 79.67 79.33 Al Rajhi Bank Kayan rose with a long bullish candle and continued its bullish momentum. The RSI is moving higher in the overbought zone indicating strength in the price action. The MACD is also sharply moving upward supporting the bullish sentiments. Kayan is likely to continue its uptrend. The next resistance is expected at the SAR13.00 level. KAYAN 13.25 13.00 12.70 12.45 12.15 Saudi Kayan Petrochemical Co. ` 5
Tadawul Technical Watch MA ADEN declined below its support level and closed at SAR30.10. The volumes are declining from the last few trading sessions. After chasing the 70 level mark, the RSI is moving lower signifying a bearish outlook at the current level. The other indicator MACD moved into a consolidation phase. MA ADEN is likely to decline further if it remains below the support-turned resistance level at SAR30.30. MA ADEN 30.43 30.27 30.13 29.97 29.83 Saudi Arabian Mining Co. Major GCC Companies Emaar remained unchanged and closed at AED6.21 with a second consecutive doji candle stick pattern. The RSI has consolidated near 70 level mark, indicating stagnation in the buying interest. The other oscillator MACD has given a negative crossover. Emaar is likely to consolidate further with a negative bias. EMAAR Dubai Financial Market 6.26 6.23 6.22 6.19 6.18 Emaar Properties ` 6
GCC Technical Watch After downfall in the last trading session, Arabtec rose and tagged a new 52-week high breaching the upper end of the price channel continuation chart pattern. The upmove was backed by large volumes. The RSI has penetrated the overbought territory reflecting a significant increase in buying interest. The MACD continued to move higher supporting the bullish outlook. Arabtec is likely to gain further if it sustains above the resistance- turned support level at AED2.60. ARTC 2.70 2.68 2.62 2.60 2.54 Arabtec Holding Co. Dana Gas remained unchanged and clung on to its resistance at the AED0.61 level. The long lower shadow of the candle indicates that sellers tried to pull the stock down but buyers stepped in to avoid the downfall. The stock respected the shortterm rectangular chart pattern. The momentum indicator RSI is moving sideways suggesting inactivity at the current level. The other oscillator MACD is moving downward. Dana Gas is likely to consolidate further if it remains at the AED0.61 resistance level. DANA 0.62 0.61 0.61 0.60 0.60 Dana Gas ` 7
GCC Technical Watch Industries Qatar declined as it fell below all three moving averages in a single swoop and closed at QR160.00. The stock continued to move in a descending triangle chart pattern. The RSI is moving downward suggesting prevalence of selling pressure at the current level. The other momentum indicator MACD is also in downtrend mode supporting the bearish sentiments. Industries Qatar is expected to decline further. IQCD 162.20 161.10 160.30 159.20 158.40 Industries Qatar Kuwait Finance remained unchanged at KD730.00 and continued to oscillate between a rectangular chart pattern. Both the oscillators RSI and MACD are moving on a flat note reflecting stagnancy in buying interest. Kuwait Finance is likely to consolidate further. The stock has to move outside the rectangle to validate the trend. KFIN 736.67 733.33 726.67 723.33 716.67 Kuwait Finance House ` 8
Definition - Technical Indicators Candlestick Patterns, Doji Doji is a form of candlestick pattern. It normally suggests major up and down movements. Trading above the Doji is positive for the market. Trading below the Doji value indicates bearish momentum. Hammer A small body (white or black) near the high with a long lower shadow with little or no upper shadow. This indicates a bullish pattern during a downtrend. Inverse-black-hammer: A bottom reversal signal with confirmation the next trading day. Moving Average, SMA (Simple Moving Average) Normally we use the 10, 20, 50 and 125 day SMA to identify the trend. A cross-over of the short-term moving average with the long-term moving average is positive for the market. The reverse is the case on the negative side. DEMA - Double-smoothed Exponential Moving Average We use the 10, 20 and 40 DEMA to identify a trend. A cross-over of the 10 and 20 DEMA gives a positive indication. A cross-over of the 20 and 10 DEMA gives a negative indication. As long as a stock or index trades above the 40 DEMA, this gives a positive indication for the stock or index. Trading below the 40 DEMA may create downside for a short time. MACD - Moving Average Convergence and Divergence The MACD has its own line period and another signal line; the dotted line indicates the signal line. When the MACD crosses the signal line from below and trades above it, it gives a positive indication. The reverse is the situation for a bearish trend. RSI - Relative Strength Index When the RSI remains below 30, it indicates that a market or stock is in oversold territory. When the RSI is above 70, it indicates that the market/stock is in an overbought level. Price ROC When the Price ROC is above zero it gives positive signals for an index or stock. When the price ROC is below zero, it gives a negative signal for the index or stock. Stochastic Oscillators When Stochastic Oscillators are below zero, the stock is in an oversold zone and some bounce back is expected. When Stochastic Oscillators are above zero, the stock is in an overbought zone and some correction is expected. Williams %R When Williams %R is above zero, the stock is in an overbought zone and some correction is expected. When Williams %R is below zero, the stock is in an oversold zone and some bounce back is expected. CCI (Commodity Channel Index) While the CCI was originally designed for commodities, the indicator also works very well with stocks and mutual funds. There are two methods of interpreting the CCI: 1. Looking for divergences: A popular method of analyzing the CCI is to look for divergences in which the underlying security is making new highs while the CCI is failing to surpass its previous highs. This classic divergence is usually followed by a correction in the security's price. 2. As an overbought/oversold indicator: The CCI usually oscillates between +/-100. Readings outside these ranges imply an overbought/oversold condition. Fibonacci Retracements Fibonacci Retracements are based on a trend line that we draw between a significant trough and peak. If the trend line is rising, the retracement lines will project downward; if the trend line is falling, the retracement lines will project upward. The number of Fibonacci Retracement levels appearing on the chart depends on the range of the y-axis. If we want to see all nine retracement levels, we may need to manually adjust the minimum and maximum values of the y-axis. Major Fibonacci Levels are 23.6%, 38.2%, 50%, 61.8% and 100%. Whipsaw A whipsaw is a situation in which a share price heads in one direction, but then is followed quickly by a movement in the opposite direction. The origin of the term is the push and pull action used by lumberjacks to cut wood with a type of saw of the same name. Gravestone Doji In a Japanese Candle Stick chart, this is a Doji candle where prices rallied but came back and closed at the level they started; the open and close are equal. ` 9
Inside Bar An inside bar is a bar, which is completely within the range of the preceding bar, i.e. it has a higher low and lower high than the bar immediately before it. An inside bar indicates a time of indecision or consolidation. On a smaller time frame, it will look like a triangle. Inside bars often occur at tops and bottoms, in continuation flags, and at key decision points like major support/resistance levels and consolidation breakouts. Big Bar A big bar is a bar, which is bigger than the preceding bar, i.e. it has a lower low and higher high than the bar immediately before it. Normally, after, forming a big bar, for a coming few sessions, the stock may move in the range of the high and low of the big bar. Breaking out or breaking down will give a fresh bullish or bearish pattern. Higher High This implies that today s intra-day high is higher than the intra-day high(s) of the previous session(s). Lower High This implies that today s intra-day high is lower than the intra-day high(s) of the previous session(s). Higher Low This implies that today s intra-day low is higher than the intra-day low(s) of the previous session(s). Lower Low This implies that today s intra-day low is lower than the intra-day low(s) of the previous session(s). Triangle This is a technical analysis pattern created by drawing trend lines along a price range that gets narrower over time because of lower tops and higher bottoms. Variations of a triangle include ascending and descending triangles. Technical analysts see a breakout of this triangular pattern as either bullish (on a breakout above the upper line) or bearish (on a breakout below the lower line). Standard Error Channel Parallel lines drawn higher and lower from the Linear Regression Trend-line form Standard Error Channels. The distance at which they are traced is a certain number of standard errors over or above the linear regression trend-line. The characteristic of the price fluctuations is its movement from one extreme to another and it depends on the traders' common opinion. Prices trend up in the optimistic market whether a pessimistic one causes prices reduction. The prices are drawn to a certain equilibrium point existing for each issue. The location of such point can be found out by using the Linear Regression analysis whether Standard Error Channel analysis presents the data about the cyclic direction of the prices as well as the forecasts for possible trend changes. Long Headed Doji Pattern This is a bullish signal, particularly when around price support levels. Double Tops / Double Bottoms A double top is simply two peaks. After the second peak is formed a breakout through the base is a signal of a possible reversal of the trend in prices. In the case of a double bottom, two troughs form and an expectation follow for the possibility of a trend reversal if the market price rises through the base. Waiting for confirmation is important for trading double tops or double bottoms. ` 10
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