Manage your risks or they will destroy you- W. B. Busin
Diagnosis (for the week ended 30th March 2012)
Analysis of the market activity in the week ended March 30th 2012 technically revealead bearish sentiments and high pessimism in the investors’ trading pattern as against improved optimistim and high speculative propensity observed in the previous week performance.
In the week, conitnued selling and weak bargain was observed across the sectors while market sentiment turned bearish. The sell pressure towards blue chips dominated market atmoshpere as investors remained pessimistic.
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 increase witnessed in their activities.
Nevertheless, the depressed postures of equities observed across the sectors might incite speculative trading- a pointer to likely volatility in the new week.
Also, it was revealed that market sentiments during the week favoured the medium and small CAPs and blue chips in the Agriculture, Industrial Goods, ICT, Services and Healthcare 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 Consumer Goods,Financial Serives Construction/Real Estate, conglomerates and Oil & Gas sector 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
DIAMOND BANKexperienced mild and low bearish sentiments in the week to record -4.0% loss against -2.4% loss recorded in the previous week.
The trend is on the slide but there was consistent accumulation throughout the week. This shows there was fresh/new interest towards the stock as some investors were exiting their positions.
However, the money flow index actually showed that money is flowing out but some investors are taking advantage of low price considerably as buttressed by volume movement which stayed positive and closed significantly above 15days volume moving average by 558%.
Furthermore, the price moving average revealed weak bargain momentum as the trend appeared bearish in both short and long term period. Also, the stock recorded new low of N2.28 during the session after 30 trading sessions. Though, the stock still closed at N2.38, above its 30days support of N2.40.
Nevertheless, The RSI also revealed that the stock is moving into oversold region buttressed by Bollinger bands as the stock traded below but later closed above bottom Bollinger bands.
Technical conclusion on sentiments: The emerging sentiments appeared mixed but it was established that there is strong accumulation tendency towards the stock. Also, there is strong indication that the stock might maintain its support level at N2.40 while its depressed posture could trigger uptrend. The chart below shows MACD, candlestick, RSI and volume.
ZENITH BANK experienced bearish sentiments in the week to record -9.5% loss against +5.3% gain recorded in the previous week.
Analysis of the outlook revealed a downtrend after recording high of N14.15 on 5th March 2012 and still sliding towards its support level at N12.01.
In addition, the stock is in bearish mode as suggested by MACD but appeared bullish in long term as revealed by moving averages.
The candlestick pattern (Dragonfly Doji) is a reversal signal, this shows the downtrend has tendency to reverse anytime soon as bargain hunters appeared taking positions.
Also, the price position at the bottom Bollinger band suggests possible reversal as well while the depressed posture of the price at the downtrend as revealed by RSI could incite the renewed bargain interest.
Technical conclusion on sentiments: the emerging sentiments appeared positive as trend reversal has high possibility while the candlestick pattern (Dragonfly Doji) revealed the weak postures of the bears during last session. For cautious purpose, a higher opening in the next session would be required as a confirmation.The chart below shows MACD, candlestick, RSI and volume.
BAGCOexperienced a bullish week to gain 25.9% gain in the week against -4.7% loss recorded in the previous week.
The bargain trend revealed strong and new interest towards the stock, considering the candlestick pattern (white Marubuzo), the price momentum and the large volume traded.
More so, the positive sentiment is likely to continue as MACD confirms the strong bullish mode while the money flow index maintained strong northward trend.
In addition, the price moving average also confirms price momentum to be bullish in short term while the stock maintains neutral position in long term.
However, the RSI reveals the stock to be in overbought region, which means the stock is due for short term correction anytime soon, buttressed by price position above upper Bollinger band. Though, the strong buying tendency observed might postpone the short term correction beyond near term.
Technical conclusion on sentiments: There is strong buying tendency towards the stock which is likely to continue after the likely short term correction. The RSI revealed overbought position of the stock. This suggests the stock is due for short term correction anytime soon. Though, the continuation of the bullish trend is not in doubt as money continued to flow into the stock while bulls are fully in control of sentiments.The chart below shows MACD, candlestick, RSI and volume.
CAPexperienced a bullish week to record 15.8% gain in the week against 0.8% gain recorded in the previous week.
The stock experienced a strong buying tendency as the stock opened with maximum points throughout the week. Also, MACD revealed the stock to be in bullish mode while the price moving averages also revealed a bullish trend in short term period.
However, the RSI showed that the stock has been overbought significantly buttressed by price position above upper Bollinger band.
To this regard, the emerging sentiments appeared mixed while the sustainability of the bullish trend is low as volume movement revealed a bearish pattern and consistent distribution in the week.
Technical conclusion on sentiments: the persistent distribution witnessed in the week revealed low sustainability of the bullish trend while the bargain momentum closed weak buttressed by the flat price position recorded in last trading session. Price correction may begin anytime soon.The chart below shows MACD, candlestick, RSI and volume.
UBNexperienced continued bearish sentiment to close with -22.1% loss as against -22.3% 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 observed 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.
TOTALexperienced bearish sentiments in the week to record -14.3% loss against flat position recorded in the previous month.
There is a strong bearish sentiment towards the stock as the stock records new low throughout the week.
The price is trading below a bottom Bollinger band- this shows the stock is depressed confirming the strong bearish sentiments while MACD and RSI confirmed the bearish mode and depressed posture.
The money flow index revealed outflow of funds from the stock while distribution dominated trading pattern during the week.
Technical conclusion on sentiments: There is a weak bargain tendency and strong bearish sentiment towards the stock which might continue in the coming sessions.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.