Sentiments in capital market is a powerful determinant of stock prices. And price is technically regarded as the summation of sentiments of all marekt participants.
This report is basically to guide you appropriately by revealing market sentiments as regards to trend and direction of individual stock, so you won’t be treading against market sentiments.
To this regard, we have employed technical analysis indicators which are strictly mathematical equations without human influence to analyse stock trends. The objective is not to (de)market any stock/company but to technically show you, our esteemed subscribers, the direction which market is trending and the sectors/stocks that are (un)favoured by current market sentiments.
In the subsequent paragraphs, we shall be relating to you how market fared in the previous week .i.e. the technical review and interpretation of general market sentiment. Meanwhile the market movers i.e. volume drivers and gainers for the week will be technically reviewed to reveal most possible emerging trend/direction. Also, we include due deligence table which contains basic financial ratios for you justify your reasoning.
Please note that the analysis is based on volume and price reaction during sessions and it does not suggest any recommendation to buy or sell as Proshare Nigeria limited would not be responsible for any investment decision you take.
Diagnosis (for the week ended 23rd March 2012)
Analysis of the market activity in the week ended March 23rd 2012 technically revealead improved optimistim and high speculative propensity in the investors’ trading pattern as against very low optimism and profit booking trend observed in the previous week performance.
In the week, renewed and fresh bargain in some sectors observed while market sentiment turned bullish, though speculative tendency dominated atmoshpere as market swings in and out of green zone while optimism level gained more points.
Also, the indecisive posture of the market remained too high. This further shows that large number of market participants are on sideline and appeared wary which could not be isolated from the unstable trend in the market. However, a significant decline witnessed in their activities.
Nevertheless, the improved optimisim and speculative buying witnessed during the week suggests better prospect with likely volatility in the new week.
Also, it was revealed that market sentiments during the week favoured the large CAP and blue chips in the Agriculture, Healthcare, Consumer Goods, Conglomerates, Industrial Goods, Oil & Gas and ICT sectors in that order which further revealed the sectors which investors were patronising in the week.
On the other hand, it was observed that market sentiments moved against the following sectors Construction/Real Estate, Services and Financial Serives in that order as sell sentiments was strong in the sectors.
Stock Trend & Direction
Here, we shall review stocks that have shapened market direction and performance in the week, using technical tools like RSI, MACD, VOLUME, MFI, CANDLESTICK, MOVING AVERAGES, BOLLIGER BANDS and ACCUMULATION & DISTRIBUTIONto reveal investors’ sentiments towards the market movers.
THE BIG VOLUME
Zenith Bankexperienced positive sentiments in the week to record a better performance of 5.3% gain against -4.1% loss recorded in the previous week.
The emerging sentiments appeared bullish while the moving averages closed bullish in short and mid-long term. The MACD is about to cross above signal line.
Also, the candlestick pattern is bullish engulfing pattern. However, the bargain momentum appeared weak as suggested by volume movement trend to close below 15days moving average significantly. Nevertheless, this could suggest, hold position of investors.
The money flow index moved northward, suggesting money is flowing into the stock while accumulation trend was observed during the week.
Technical conclusion on sentiments: The emerging sentiments appeared positive and bullish buttressed by bullish engulfing pattern from candlestick. Though, the bargain drive appeared weak, considering the low volume.
Nevertheless, the price movement is gaining uptrend momentum gradually to close bullish in both short and long term as revealed by moving averages. The chart below shows MACD, candlestick, RSI and volume.
UBAexperienced mixed sentiments in the week to record 0.7% gain - a weak performance to 1.75% recorded in the previous week. The emerging sentiments appeared bearish buttressed by MACD while moving averages closed neutral in both short and long term period.
Meanwhile, the stock is likely to experience low volatility as Bollinger band is getting narrower while the stock maintained its support level N2.56 by recording low of N2.58 in the week.
The RSI and moving averages revealed weak momentum in price movement while is likely to form a resistance at N2.87. The volume trend buttressed the weak momentum as the volume traded closed below 15days moving averages significantly by 70%.
Technical conclusion on sentiments: The emerging sentiments appeared bearish, buttressed by MACD. Though, strong accumulation was observed in the last session. Volatility is waning so as price movement momentum while the stock has formed a resistance at N2.87. The stock lacks strength to break the resistance.
FCMBhad a strong bullish week to record 21.9% gain against -13.0% loss recorded in the previous week.
The emerging sentiment is positive and bullish. MACD closed bullish but the moving averages closed neutral in both short and long term period.
The candlestick pattern revealed strong buying and bullish tendency as the stock opened maximum and closed maximum.
More so, we observed accumulation in the week while money flow index closed northward. Also, majority of investors maintained hold position, considering the very low traded volume in the last session of the week.
However, the RSI showed the stock is nearing overbought region but the bullish trend likely to sustain as the upper Bollinger band is opening northwards.
Technical conclusion on sentiments: the emerging sentiment is positive and appeared bullish. The northward opening of the upper Bollinger band suggests strong buying force while the bullish trend is likely to continue. The candlestick pattern revealed very strong buying tendency while low volume traded suggests hold position of most investors.The chart below shows MACD, candlestick, RSI and volume.
PAINTCOMexperienced a very strong bullish week and the stock has been in a consistent bullish trend for the past 11days.
The emerging sentiments appeared positive and bullish while buying force remained very strong, as suggested by candlestick pattern, considering the maximum gap-up opening and closing posture of the stock.
MACD closed bullish, moving averages appeared bullish in short term but closed neutral in long term.
However, the money flow index remained flat throughout the week while RSI suggests the stock is due for serious correction anytime soon as the stock is far above overbought region. Meanwhile, the volume trend appeared too low and closed bearish most of the time in the week.
Technical conclusion on sentiments: The emerging sentiments appeared bullish. Though, the stock is due for correction anytime soon, trading far above overbought region as suggested by RSI. But the strong bargain force is likely to defy this.The chart below shows MACD, candlestick, RSI and volume.
INTBREWexperienced bearish sentiments in the week to record -9.8% loss as against a no price movement experienced in the previous month.
The emerging sentiments towards the stock appeared bearish buttressed by MACD while the moving average closed neutral for both short and long term period.
However, the trend has slight possibility to reverse in short term as the price closed below lower Bollinger band, moving closer to oversold region as revealed by RSI.
The volume trend is bearish and closed below 15days moving average significantly while money flow index closed southward suggesting outflow of funds from the stock.
Technical conclusion on sentiments: The sentiment towards the stock is bearish and likely to continue for few sessions. However, there is slight possibility of reversal as the stock is very close to oversold region. The chart below shows MACD, candlestick, RSI and volume.
UBNexperienced continued bearish sentiment to close with -22.3% loss as against -22.2% loss recorded in the previous week. The stock experienced huge sell off, recording new lows throughout the week.
The RSI revealed that the stock is depressed, trading far below oversold region, buttressed by continued distribution as witnessed in the week while money continued to flow out of the stock
Technical conclusion on sentiments: There is a strong bearish sentiment towards the stock while majority of sentiment indicators revealed a depressed posture and strong bearish trend.The chart below shows MACD, candlestick, RSI and volume.
Disclaimer: The information provided herein is our opinion only. Under no circumstances do any statements here represent a recommendation to buy or sell your stocks or make any kind of an investment. You are responsible for your own due diligence. To summarize, we do not provide recommendations nor do we make any claims or promises that any information here will lead to a profit, loss or any other result. They are for your guidance purpose only.