Technical analysis of the QSE index
The QSE Index ended the week at 12,496.46 and lost 0.88% from last week’s close. The Index created a Bearish Engulfing candlestick for the week, which signifies buyers’ weakness specifically after the indecision that the Doji candlestick created the week before. The good news is that the drop was coupled with low volumes compared to the week before. However, that does not indicate an upwards reversal in the coming week. Technical indicators are flat but giving more bearish signs as the Index could not break above the 55SMA or the 21SMA. The index faces tough resistance at the 12,800 level while the expected support lies at the 12,000 level.
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.
