Analysis of the market activity in the week ended April 2012 technically revealead sustained optimism and positive sentiments along with weak bargain drive in the investors’ trading pattern as against an improved optimism and positive sentiments backed with active bargain activities observed in the previous week’s performance.
In the week just ended, continuedbargain sentiment was observed across the baord as market sentiments remained positive, mainly towards active and liquid stocks. Furthermore, renewed and continued moderate bargain tendency was extended into moreattractive sectors as bargain hunters appear to be in control of market direction - a major reason for the sustained uptrend in the market.
We observed in the week that most active and liquid stocks broke their short term resistance levels, recording new highs in short term- a function of sustained and growing optimism as the Key Benchmark Indices impressively crossed above 21,000 psychological line to settle at 22,109.44.
To date, the indecisive posture of the market remains high, alongside a sustained reduced activity level as sideline attendants appeared to take positions subtly, yet remain a significant feature.
The sustained bargain tendency and uptrend of equity prices witnessed across the board and the short term postures of investors is expected to incite the level of profit booking in the coming periods - a pointer to short term price correction in the market.
Technically, market sentiments during the week favoured liquid and active stocks of Medium and Large CAP categories in the Oil & Gas, Agriculture, Consumer Goods, ICT, Industrial Goods, Services, Financial Services, Construction/Real Estate and Conglomerates sector(s) in that order which further revealed the sectors investors patronised in the week.
On the other hand, it was observed that market sentiments moved against the Healthcare sector(s)only due to its much stronger sell sentiments.
Stock Trend & Direction
As always, we conducted a review of 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 & DISTRIBUTION to reveal investors’ sentiments towards the market movers.
THE BIG VOLUME
UBA Plcexperienced positive and strong bargain sentiments in the week to close bullish with 27.0% gain as against 6.8% gain recorded in the previous- continued and strong bargain tendency observed towards the stock as we have envisaged in our previous sentiment analysis report on the stock.
Experiencing impressive bargain tendency with growing bullish volume in the week, a strong indication of accumulation tendency towards the stock was revealed by the volume trend. Again, the stock remains bullish in both short and mid-long term as suggested by price moving average, buttressed by the strong bullish mode revealed by MACD.
The stock hits above 7months high of N3.41( recorded on October 17 2011) to close at N3.57 as new high while the money flow index maintained northward trend, revealing continued cash flow into the stock.
However, the stock is in an overbought region as revealed by RSI reinforced by price position above upper Bollinger band while MACD also closed in an overbought range. Though the candlestick revealed slight selling in the last session, the stock may extend the uptrend as we have not observed weakness in bargain momentum.
Technical conclusion on sentiments: the stock is in strong bullish mode to record new 7months high. But being in an overbought region indicating possible short term correction, the price may extend the uptrend. A cautious approach is therefore, advised while lower price move is required in the next session before considering exit.The chart below shows MACD, candlestick, RSI and volume analysis.
ZENITHBANK Plcexperienced mixed sentiments and weak bargain tendency to close with 3.4% gain as against 5.2% gain recorded in the previous week- sustained weak performance and mixed sentiments observed in the week.
The stock experienced more of distribution in the week as revealed in the volume trend. Though, the stock remained bullish in short and mid-long term as revealed by price moving average to close at N14.13, above its 9months high of N13.59 amid the mixed and weak bargain tendency.
With weakness observed in the uptrend momentum as revealed by RSI, the candlestick pattern shows an incoming sell tendency, suggesting possible reversal amid high volatility as revealed by Bollinger bands.
Technical Conclusion on sentiments:
As revealed by MACD and price moving average, the stock is still in a bullish mode. However, there is the possibility of volatility and price reversal as the sustained weak bargain posture is likely to succumb to sell pressure in the coming periods. The chart below shows MACD, candlestick, RSI and volume analysis.
CADBURY Plcexperienced positive sentiments and improved bargain tendency in the week to close with 27.4% gain as against 2.7% recorded in the previous week- an improved bargain and sustained positive sentiments was observed towards the stock in the week.
Maintaining a strong bargain posture to stay bullish in both short and mid-long term as revealed by price moving average buttressed by MACD, the position of the price above upper Bollinger band by 9.9% revealed strong buying tendency of the investors. This further suggests the possibility of the price to extend the uptrend as the price hits above its 6months high of N14.20 (recorded on October 28, 2011) to close at N14.40.
The price; trading in an overbought range as revealed by RSI shows the confirmation by MACD posture - the overbought range of the stock, which indicates possible reversal or short term price correction in near term.
Again, the candlestick pattern in the last trading session revealed the presence of the bears (short-termist), scrambling for profit. This further suggests the possibility of price reversal buttressed by the huge bearish volume recorded in the last session albeit money flow and accumulation index maintained northward trend.
Technical conclusion on sentiments: The stock is still in strong bullish mode with growing accumulation tendency. However, there is possibility of price correction as the stock hit above its 6months high to close in an overbought region. The last candlestick pattern was a reversal signal which reveals presence of bears. A cautious approach is advised as the sustainability of the uptrend has low reliability. Meanwhile, lower price position in the next session is required to confirm the price correction trend.The chart below shows MACD, candlestick, RSI and volume analysis.
CONOIL Plcexperienced strong bullish sentiments in the week to close with 21.5% gain against -9.7% loss recorded in the previous week – the improved positive sentiments was induced by depressed posture of the stock as envisaged in our previous sentiment.
However, more of distribution was done in the week as volume trend suggests while the stock closed neutral and remained bearish in short and mid-long term period respectively, indicating the stock is still within the ambit of bears. Though, the price pattern revealed a moderate bargain tendency buttressed by MACD while money flow index maintained northward.
The stock still appears depressed and bottomed-out as revealed by RSI, indicating that the stock may extend the uptrend while the northward opening of the upper Bollinger band buttressed this further.
Technical conclusion on sentiments: there is high possibility that the stock may extend the uptrend, considering the northward opening of the upper Bollinger band which indicates possible bargain momentum sustained by the similar trend observed in money flow index.The chart below shows MACD, candlestick, RSI and volume analysis.
FIDELITYBK Plc experienced negative sentiments in the week to close with -9.3% loss against +5.6% gain recorded in the previous week. An overwhelmed sell tendency was observed in the week as the stock erased the previous gains recorded.
More so, the stock witnessed distribution throughout the week as revealed in the volume trend buttressed by money flow index that maintained downward trend, indicating outflow of funds.
In addition, the sentiments towards the stock appeared bearish as deduced by MACD while the stock closed neutral in short term as unveiled by price moving average, indicating the stock is still within the bearish range. Also, the stock may break its 2months support at N1.35 (recorded on 2oth Feb. 2012) to close N1.36, considering the falling momentum as revealed by RSI.
Technical conclusion on sentiments: The emerging sentiments appeared bearish while the stock is likely to break its 2months support, considering the price falling momentum. The trend reversal is not in doubt as the depressed posture of the price below bottom Bollinger band may incite speculative trading in the near time. The chart below shows MACD, candlestick, RSI and volume analysis.
CAP Plcexperienced bearish sentiments in the week to close with -11.3% decline as against +15.7% gain recorded in the previous week, indicating short term price correction as investors booked profits in the week.
Noticeably, a consistent distribution trend in the week intensified by continued outflow of cash in the stock was displayed by Cash flow index while the position of MACD confirmed the profit taking tendency witnessed in the week.
However, waning sell tendency was observed in the last two sessions as exposed in the volume trend structured by two flat price positions witnessed in the last two sessions. On the other hand, the stock remained bullish in both short and mid-long term as revealed by price moving average.
Technical conclusion on sentiments: the emerging sentiments looks positive as sell momentum waned while the stock retained its bullish mode in both short and mid long term period.The chart below shows MACD, candlestick, RSI and volume analysis.
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