Analysis of the market activity in the week ended May 4, 2012 technically reveals an improved market optimism and growing positive sentiments with steady active bargain tendency in the investors’ trading pattern as against sustained optimism and positive sentiments with low bargain drive observed in the previous week’s performance.
In the week just ended, continued and active bargain tendency was observed across the major sectors as market sentiments remained positive, mainly towards active and liquid stocks. However, there is concentration of active and continued bargain posture in some major sectors while mild and growing sell tendency in some unattractive sectors was noticed.
Notwithstanding, sustained and continued moderate bargain tendency outweighed the sell side significantly as more active and liquid stocks continued to record new highs while the bargain hunters remained in control of market direction - a major reason for the sustained uptrend in the market and a function of sustained and growing optimisms.
Hitherto, the indecisive posture of the market remains high, alongside a sustained reduced activity level as sidelined attendants appeared to take positions subtly, yet remain a significant feature.
Prescription and the likely expectation in the coming periods:The position of the All Share Index (ASI) at its top i.e. overbought region as revealed by RSI would suggest a possible short term market correction - with the market direction being influenced by profit taking anytime soon. This points to further market price volatility as sectors are now equally split between the bulls and bears.
Technically, market sentiments during the week favoured liquid and active stocks of Medium and Large CAP categories in the Financial Services, Conglomerates, Industrial Goods, Consumer Goods and Agriculture sector(s) in that order which further revealed sectors graced by investors patronage in the week.
On the other hand, it was observed that market sentiments moved against the Services, Construction/Real Estate, Oil & Gas, Natural Resources and Healthcare sector(s)as sell sentiments was stronger in the sector(s).
Stock Trend & Direction
In principle, we conducted a review of stocks that have shapened market direction and performance in the week – using the conventional technical tools - RSI, MACD, VOLUME, MFI, CANDLESTICK, MOVING AVERAGES, BOLLIGER BANDS and ACCUMULATION & DISTRIBUTION to evince investors’ sentiments towards the market movers.
THE BIG VOLUME
FCMB Plcexperienced mixed sentiments in the week to record 6.7% gain as against -5.1% recorded in the previous week- an improved bargain and market sentiments was observed as the stock records new year high in the week.
The stock recorded significant bullish volume in the week, which indicates and propped up the improved bargain postures of investors towards the stock. In addition, the stock remains bullish in both short and mid-long term period as revealed by price moving average and intensified by MACD.
Subsequently, the stock recorded new high of N5.70koboin for the year but failed an attempt to break its 8months resistance at N5.70kobo (recorded on August 24th 2011) due to loss of momentum experienced in the week as revealed by RSI while similar weakness observed in money flow index, deepening the mixed sentiments noted above.
There is however the possibility of breaking the resistance in the coming periods, considering the significant bullish volume growth observed towards the end of the week, which indicates continued accumulation trend.
Technical conclusion on sentiments: There is moderate possibility for the stock to break its 8months resistance level at N5.70kobo while the positive sentiments may extend the uptrend, as the stock remains bullish in both short and mid-long term.The chart below shows MACD, candlestick, RSI and volume analysis.
DAIMOND BANKPlcexperienced strong buying tendency with growing bullish volume in the week to record 14.3% gain as against -2.8% loss recorded in the previous week- a trend reversal and an impressive strong bargain posture observed towards the stock in the week.
Diamond Bank stock witnessed impressive positive sentiments, particularly in the last two sessions of the week to close bullish in both short and mid-long term periods as revealed by price moving average. Also, the price position above upper Bollinger band confirms the strong bargain posture while the position of MACD bolstered the bullish trend and positive sentiments further.
As the money flow index maintained strong northward trend, the bullish volume traded experienced significant and gradual growth throughout the week, indicating continued buying posture of investors.
However, the stock appeared to be within overbought range as ascertained by RSI while the price position above upper Bollinger band by 28.2% confirms the posture and buttressed further by slight weakness observed in accumulation index.
Technical conclusion on sentiments: there is strong buying tendency towards the stock, the price position above upper Bollinger band by 28.2% revealed positive sentiments and confirms the strong buying tendency further. Again, this suggests the possibility of short-term pullback as the stock trades within the overbought range amidst noticeable slight weakness in accumulation trend.The chart below shows MACD, candlestick, RSI and volume analysis.
ACCESS BANK Plcbounced back with strong bargain tendency and improved positive sentiments to top the week with 16.3% gain as against -2.7% loss recorded in the previous month.- strong bargain tendency with impressive bullish volume trend was witnessed in week as stock closed above its short term resistance level at N6.61 to settle at N6.78.
The stock appeared bullish in short term as shown by price moving average, reinforced by MACD. The continued flow of money into the stock and sustained accumulation pattern, which was driven by bullish volume, was noticed in the week.
Technical conclusion on sentiments: The stock has moderate possibility to extend the uptrend for few sessions before possible short term pull-back as we have not seen weakness in momentum while the Bollinger bands reveals no conclusive future volatility or price movement.The chart below shows MACD, candlestick, RSI and volume analysis.
PAINTCOM Plcexperienced improved positive sentiments and moderate buying in the concluded week to record 12.6% gain as against 4.8% gain recorded in the previous week- an improved positive sentiments and sustained bargain posture observed as the stock hits year high.
This stock’s position appeared bullish in short term but remained neutral in mid-long term as displayed by price moving average. Through the money flow index formula, there is continued flow of money into the stock as the accumulation maintains northward trend, precipitated by moderate growth in bullish volume.
In addition, there is moderate possibility for the stock to extend the uptrend as the chances of sharp price move increases, considering the prolonged contraction in the Bollinger bands (narrow bands), suggesting possible price volatility in the coming periods.
Technical conclusion on sentiments: The stock has moderate possibility to sustain price uptrend as suggested by Bollinger bands while the growing bargain tendency forces this further.
The Bollinger band has been in narrow position for four sessions, indicating possible sharp price move in the coming periods. However, the price reversal is not in doubt as RSI fortifies the overbought posture of the stocks. The chart below shows MACD, candlestick, RSI and volume analysis.
MOBIL Plc experienced bearish sentiments and high sell tendency in the week to record -15.5% loss as against 10.2% gain recorded in the previous week- price reversal trend was witnessed as investors booked short term profit considerably while the stock hits below 2years low (N118.67 recorded in 9th April 2010) at N117.16.
The price trend revealed neutral posture and bearish trend in short and mid-long term period respectively, indicating the stock is still within the ambit of the bears as buttressed by MACD.
The last trading session experienced an uptrend with strong bargain tendency as exhibited by candlestick pattern, indicating price reversal trend as stock appeared bottomed-out.
Technical conclusion on sentiments: the emerging sentiments appeared positive, considering the strong reversal trend observed at the last trading session of the week while the stock appeared bottomed-out with 2years low price posture.The chart below shows MACD, candlestick, RSI and volume analysis.
NCR Plc experienced negative and bearish sentiments to record -16.4% loss as against 21.5% gain recorded in the previous week - short term price reversal was observed as investors booked short term profit considerably.
More so, consistent sell tendency dominated the sentiments towards the stock while more of distribution was done in the week as revealed in the volume trend buttressed by sharp fall in RSI trend, indicating high falling momentum.
But the stock maintained its bullish posture to remain confident in both short and mid-long term as revealed by price moving average while the posture of Bollinger band suggests less volatility in the coming periods with flat positions support, recorded consecutively in the week.
Technical conclusion on sentiments: This stock has moderate possibility of trend reversal in the coming weeks as sell tendency waned in four (4) flat price positions recorded consecutively in the week.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.