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Sentiment Analysis Report - W/E April 13, 2012
Category: Cap Mkt Sentiments
Read (1373)
Sunday, April 15, 2012/ Proshare Research
The Diagnosis
Analysis of the market activity in the week ended April 13th 2012 technically revealed an increased pessimism and negative sentiments laced with a profit taking propensity in the investors’ trading pattern as against a positive and moderate bargain sentiments observed in the previous week’s performance.
In the week just ended, a lot more sell sentiment was observed across the board as market sentiments turned negative, mainly towards active and liquid stocks. However, renewed and continued moderate bargain tendency was experienced in few attractive sectors as speculators appear to be in control of market direction - a major reason for the unstable market trend.
To date, the indecisive posture of the market remains high, alongside a reduced activity level as sideline attendants appeared to take positions subtly, yet remain a significant feature.
The depressed postures of equity prices across the board and the wary postures of investors is expected to increase the level of speculative trading in the coming periods - a pointer to continued volatility in the market.
Technically, market sentiments during the week moved against blue chips of Medium and Large CAP categories in the Financial Services, Services, Industrial Goods, Oil & Gas, Consumer Goods and Agriculture sectors in that order which further revealed the sectors investors patronised in the week.
On the other hand, it was observed that market sentiments favoured the following sectors Healthcare, Construction/Real Estate and Conglomerates sectorsin that order as bargain sentiments was stronger in the sectors.
Stock Trend & Direction
We conducted a review of stocks that have sharpened market direction and performance in the week - using technical tools like RSI, MACD, VOLUME, MFI, CANDLESTICK, MOVING AVERAGES, BOLLIGER BANDS and ACCUMULATION & DISTRIBUTION to reveal investors’ sentiments towards the market movers.
THE BIG VOLUME
TRANSCORP PLC experienced weak bargain sentiments to close flat for the week – as we recall that a similar flat position was recorded in the previous week. The stock maintained a trading range of N0.50kobo and N0.52kobo in the week, trading feebly below its 10days resistance level of N0.54kobo.
The sentiments towards the stock in the last two weeks appeared indecisive considering the two weekly flat positions recorded consecutively. The price moving average of the stock closed neutral in both short and mid-long term buttressing the indecisive postures of the investors in the two last weeks.
However, the emerging sentiments appear more promising, considering the BIG VOLUME (Institutional Buying) recorded towards the end of the week as revealed by its volume trend, followed by a maximum gain of 4%.
The big volume (though it was a bearish volume), usually signifies big money and significant interest from institutional investor(s).
To buttress this further, the northward turn in the Money Flow Index and Accumulation/Distribution index suggest the possibility of short term rally in the coming periods. Also, the RSI revealed an uptrend momentum in the last trading session.
Technical Conclusion on sentiments: The emerging sentiments suggest moderate possibility of short term rally in the coming periods - all things being equal.
ZENITH BANK PLC experienced bearish sentiments in the week to record -1.2% loss against 6.1% gain recorded in the previous week.
The stock could not sustain the uptrend recorded in the previous week as it lost ground to growing sell pressures witnessed in the week. Furthermore, bearish volumes were recorded in the week with gradual growth as revealed by the volume trend - indicating the growing sell tendency while the stock was trying to establish a support level at N13.00.
However, we observed a slight bargain tendency in the last session as reflected in the candlestick pattern, suggesting a trend reversal with corresponding slight uptrend momentum as indicated by RSI
The moving average closed neutral in both short and long term period while MACD revealed a bullish trend.
Technical conclusion on sentiments: The emerging sentiment suggests a trend reversal but with low reliability considering the consistent and gradual growth in the bearish volume in the week. The chart below shows MACD, candlestick, RSI and volume analysis
THE GAINERS
UBN PLC experienced trend reversal in the week to post a +20.8% gain against the -9.6% loss recorded in the previous week.
The stock has been experiencing long term price correction in the last 68 sessions (4months plus) after hitting a 39 months high on 23rd Dec 2011 to close at N11.15.
The stock is currently trying to establish a new support at N2.45kobo. In the week just ended, the stock recorded strong bullish sentiments with consistent maximum gain; against a bearish volume, indicating more of sell transactions in the week ahead.
This posture questions the sustainability of the uptrend as the stock is yet to step out of the oversold region as revealed by RSI, though the RSI closed northward trying to gather momentum, buttressed by moving average positions which closed neutral in the short and mid-long term. There is however a moderate reliability on the sustainability of the uptrend as MACD closed bullish while the money flow index closed northward.
Technical conclusion on sentiments: The emerging sentiments appear positive as the stock is trying to establish a support at N2.45kobo. Yet, the persistent bearish volume witnessed throughout the week raises concerns as it points to a continued sell-off tendency despite the uptrend in its price position.
Based on this, a cautious approach towards the stock in the coming period is suggested as the uptrend may likely turn out to be a bull-trap or 'dead cat bounce rally'. There is a moderate reliability that the stock may extend the uptrend as the gaining pattern may attract speculative trading. The chart below shows MACD, candlestick, RSI and volume analysis.
CAP PLC experienced continued bullish sentiments in the week to record 13.9% gain against 8.1% gain recorded in the previous week where a sustained uptrend was observed in the last three weeks.
Strong bargain sentiments was observed towards the stock as reflected in the price trend which closed bullish in the short and mid-long term, a position supported by MACD. The price position at the edge of upper Bollinger bands with 5% gain further confirmed the strong bargain tendency.
However, a cautious approach is advised towards the stock due to a high possibility of price retracement in the coming periods especially when it is considered that the stock is trading at overbought region as revealed by RSI, further buttressed by its price position at the edge of upper Bollinger band.
To buttress this further, the stock recorded a bearish volume in the last trading session, indicating subtle sell tendency while money flow index revealed slight weakness in cash-inflow momentum.
Technical conclusion on sentiments: There is a high possibility of a trend reversal in the coming periods as the stock is trading at overbought region with corresponding bearish volume witnessed in the last session.
Also, the bearish volume closed above moving average by 32% suggesting that the sustainability of the uptrend is not in doubt but of a low reliability. The chart below shows MACD, candlestick, RSI and volume analysis.
THE LOSERS
LIVESTOCK FEEDS PLC experienced a strong sell tendency in the week to record a 12.6% loss as against the -6.9% loss recorded in the previous month; indicating a continued and sustained bearish sentiment as witnessed towards the stock in the week.
More so, the stock is currently in a bearish mode as revealed by MACD and buttressed by moving averages which closed bearish in short term but neutral in mid-long term. The stock broke its 18 days support at N0.92 during the week and is likely to break its 41 days 2nd support level at N0.81kobo, considering the falling momentum recorded in the last session.
More so, the stock posture appeared depressed as revealed by RSI buttressed by price position at the tip of bottom Bollinger band.
Technical conclusion on sentiments: The emerging sentiments appear bearish while the stock is likely to break its long term support at N0.81kobo, considering the maximum fall experienced in the last session.
A trend reversal is however not in doubt as the depressed posture of the stock may incite bargain sentiments in the near term. The chart below shows MACD, candlestick, RSI and Volume Analysis
ACCESS BANK PLC experienced a sell tendency in the week to record a -12.6% loss as against the 6.6% gain recorded in the previous week revealing an overwhelmed sell tendency during the week just ended.
The stock is experiencing long term price correction after hitting a 9 month high at N7.6 on March 5th 2012 and the stock is yet to find a support level. More so, the stock is currently in bearish mode as revealed by MACD while the moving averages closed bearish in the short term and stayed neutral in the mid-long term period.
The RSI revealed a depressed posture as price falling momentum is trending towards the oversold region while the stock recorded more of a bearish volume in the week, buttressed by a southward trend in the money flow index.
Technical conclusion on sentiments: the emerging sentiments appear bearish as the stock is yet to find a new support level, considering the maximum loss recorded in the last session.
Importantly, the price position at the edge of the bottom Bollinger bands is pushing the band downwards. This is further buttressed with all other indicators revealing a negative trend as the stock is yet to find a support due to the ongoing price correction observed.
Yet, the depressed posture of the price might incite a short term trend reversal. The chart below shows MACD, candlestick, RSI and volume analysis.
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.
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