Technical analysis of the QSE index
Although the Index dropped over 6% during the week; it managed to recover some lost ground and ended losing 4.4% from last week. Overall, indicators are still on the bearish side. The MACD is pointing south, while the RSI is still making lower highs after negatively diverging with the Index. On a positive note, there is a good chance for a bounce from these levels. The drop witnessed over the week was on a weaker note. More importantly, the Index managed to close above the denoted uptrend line. The MACD is above the zero line which is still bullish; the Index also bounced off the 55SMA which proved to be a strong support. As a result, we expect the Index to bounce from the current levels.
Definitions of key terms used in technical analysis
Candlestick chart – A candlestick chart is a price chart that displays the high, low, open, and close for a security. The ‘body’ of the chart is portion between the open and close price, while the high and low intraday movements form the ‘shadow’.
The candlestick may represent any time frame. We use a one-day candlestick chart (every candlestick represents one trading day) in our analysis.
Doji candlestick pattern – A Doji candlestick is formed when a security’s open and close are practically equal. The pattern indicates indecisiveness, and based on preceding price actions and future confirmation, may indicate a bullish or bearish trend reversal.
