Sentiment Analysis Report – W/E May 18, 2012

Category: Cap Mkt Sentiments


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Sentiment Analysis Report – W/E May 18, 2012

 

Sunday, May 20, 2012/ Proshare Research
 
The Diagnosis
Analysis of the market activity in the week ended May 18th 2012 technically reveals a  sustained decline in market optimism and continued weak bargain drive with significant increase in profit-taking activities in the investors’ trading pattern as against a moderate decline in market optimism and weak bargain drive with growing speculative activities observed in the previous week’s performance.
 
In the week just ended, sustained feeble bargain and growing profit taking was observed across the major sectors as market sentiments remained negative, mainly towards big and medium CAP stocks. However, there exist sustained and growing bargain drives in a few active sectors while sustained moderate sell tendency extends to more unattractive sectors.
 
Nevertheless, the sustained moderate sell tendency outweighed the weak buy side as most active and liquid stocks still trade within overbought range while the short termist remained in control of market direction - a major reason for the increase in profit-taking propensity and pessimistic activities in the market.
 
To date, the indecisive posture of the market remains high, alongside a renewed growing activity level as sideline attendants appeared to take cautious positions subtly, yet remain a significant feature.
 
Prescription and the likely expectation in the coming periods: The  position of the All Share Index (ASI) is still within the overbought range, indicating the possibility of extending price correction as most of the active and value stocks are still trading within overbought region.  
 
Meanwhile the chance of a sustained moderate volatility in the coming weeks has increased as invetors are likely to be more cautious amid sustained speculative trading - a pointer to further market price volatility.
 
 
Technically, market sentiments during the week favoured liquid and active stocks of Medium and Large CAP categories in the Conglomerates, Industrial Goods, Oil & Gas and Construction/Real Estate 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 Agriculture, Consumer Goods, ICT, Services, Financial Services and Healthcare sector(s)as sell sentiments was stronger in the sector(s).
 
 
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
 
IHS Plc experienced continued bearish sentiments in the week to record -4.7% loss as against -4.9% loss recorded in the previous week - sustained and growing sell tendency was observed towards the stock in the week as the bearish volume topped market volume for the week.
 
The price movement pattern suggests no bargain drive position as revealed by candlestick, indicating the strong bearish tendency, buttressed by MACD. The price position below bottom Bollinger band indicates a good chance of continuing the downtrend while the stock remains bearish in both short and mid-long term period as revealed by its price moving average.
 
To buttress this point, the RSI revealed the depressed posture of the stock as far below the oversold region while the bearish volume experienced a significant surge to close at 347.32million as against 225units traded previously.
 
Similarly, the Money Flow Index (MFI) sustained a prolonged negative position, indicating no inflow of cash into the stock over a long period amid continued sell-off.
 
However, the sudden big volume, which is the highest volume traded in the last two years, may signify fresh interest towards the stock as some investors might be taking advantage of its depressed posture which may encourage a short term trend reversal, though the reliability is low.
 
Technical conclusion on sentiments: The stock is in a bearish and depressed mode with a corresponding high chance of continuing the trend; amid investors’ sustained sell-off tendency. However, depressed price posture might incite short term trend reversal as the new big volume signifies big interest. The chart below shows MACD, candlestick, RSI and volume analysis.
 
 
 
UBA Plc experienced positive sentiments and improved moderate bargain positions as we had envisaged in our previous Sentiment Analysis Report – W/E May 11, 2012
 
The stock recorded a modest gain of 5.0% as against the -5.5% loss recorded in the previous week - an improved but weak bargain tendency was observed towards the stock despite mixed sentiments caused by overall bearish sentiments in the market.
 
The stock maintained its bullish mode in both short and mid-long term period as revealed by the price moving average amid sustained distribution trend in the week, on the back of a bearish volume trend.
 
However, the candlestick pattern revealed active posture of the bears while the southward trend in the money flow index (MFI) further buttressed distribution trend observed in the week.
 
Technical conclusion on sentiments: The stock experienced active presence of the bears while the bulls maintained weak posture in the week. It would appear that a cautionary approach will be in order towards the stock while we expect bargain side to hold its position due to the possibility of price volatility in the coming week as the emerging sentiments appear mixed. Noteworthy is the posture of Bollinger bands which does not provide anything conclusive. The chart below shows MACD, candlestick, RSI and volume analysis.
 
 
 
THE GAINERS
 
Transcorp Plc experienced strong bargain tendency and improved positive sentiment to record a 23.73% gain as against the 5.4% gain recorded in the previous week - sustained and growing active bargain drive was observed towards the stock in the week, recording a new high of N0.73kobo for the year while breaking its 7months resistance of N0.69kobo by 5.80% - this indicates renewed positive sentiments from investors.
 
The stock maintains its short term bullish mode and sustained its neutral posture in the mid-long term as revealed by its price moving average, indicating the stock is yet to attain full bullish mode. In addition, we observed that the price closed above upper Bollinger bands by 4.4% which suggests further that the steep uptrend in price has a good chance of continuing while the stock is at its top.
 
To buttress this further, MACD's posture at overbought range confirmed the bullish posture of the stock and the active buying tendency of the investors while money flow index revealed a similar trend despite the overall bearish sentiment in the market.
 
However, the stock is trading within overbought range as revealed by RSI, buttressed by MACD while price position above upper Bollinger band also confirms this posture, indicating possible short term pull-back.
 
Technical conclusion on sentiments: the stock is currently in overbought range while experiencing strong bullish tendency. The possibility of a short term pull-back anytime soon is not in doubt, though there is no sign of weakness in the uptrend momentum at the moment. A cautious treading is advised amid possible continuation of price uptrend in the next few sessions. The chart below shows MACD, candlestick, RSI and volume analysis.
 
 
 
DANGFLOUR Plc experienced a sustained active bargain drive and continued positive sentiments as we have envisaged in our previous report. The stock recorded 15.3% gain to close among top gainers in the week as against 26.8% gain recorded in the previous week - sustained bullish sentiments witnessed as the stock closed above its 8months high of N7.22kobo, recording a new 8months high of N7.29.
 
The stock remained in full bullish mode as revealed by its price moving average and buttressed by MACD while volume trend revealed active accumulation in the week. A similar uptrend was observed in the money flow index (MFI).
 
However, the stock is trading at its top as suggested by RSI, indicating the stock is within overbought range. Also, a slight weakness was observed in the uptrend momentum as indicated in the RSI and money flow trend.
 
The last candlestick formation (Black Marubuso) revealed heavy sell tendency, indicating possible short term pull-back in the next session.
 
Technical Conclusion on sentiments: the emerging sentiments appear negative as profit taking tendency is likely to overwhelm a possible bargain drive as stock recorded 41.1% gain cumulatively in the last 3 consecutive weeks. The -4.9% loss recorded in the last session buttressed the high possibility of a short term pull-back in the coming session.The chart below shows MACD, candlestick, RSI and volume analysis.
 
 
THE LOSERS
 
UBN Plc experienced strong sell tendency and trend reversal sentiments as the stock witnessed consistent price correction in the week to record -18.0% loss as against +14.4% gain recorded in the previous week. An expected strong price correction trend was observed while the stock erased the +14.4% gain recorded in the previous week.
The stock remained within the ambit of the bears while experiencing sell pressure as revealed by MACD. Also, the price moving average revealed the stock to be in a neutral position in both short and mid-long term period, buttressing the dominance of the bears and the sell pressure noted above. Additionally, the price pattern indicates strong sell pressure while the consistent falling price momentum confirms the consistent distribution trend witnessed in the week.
The chance that the stock may dip further into a depressed or oversold region has increased due to the absence of bargain tendency as revealed by the sharp fall in RSI and money flow index (MFI).
Technical conclusion on sentiments: there is a moderate possibility for the falling trend to continue in the next few sessions, considering the falling momentum amid an absence of bargain drive is revealed by the candlestick pattern. However, a slight decline in sell pressure was observed as indicated by the volume trend, suggesting the sell pressure could cease anytime soon.The chart below shows MACD, candlestick, RSI and volume analysis.
 
 
NACHO Plc experienced a sustained sell tendency and growing negative sentiments to record a -27.7% loss as against the -2.9% loss recorded in the previous week - an overwhelmed sell tendency was observed towards the stock in the week.
 
The stock remained bearish and closed neutral in the short and mid-long term period respectively as revealed by its price moving average, suggesting that the stock is still within the ambit of the bears. The stock appeared depressed, closing within an oversold region as revealed by the RSI while the position of MACD in an oversold region buttressed this further.
 
However, the volume trend revealed swinging accumulation tendency in the week while money flow index maintained northward trend with slight volatility, indicating flow of money into the stocks as investors accumulated intermittently.
 
Technical conclusion on sentiments: the stock appears depressed as revealed by RSI and buttressed by MACD due to sell pressure. However, the probability of price consolidating into less volatile trading range has increased as revealed by Bollinger band. This suggests waning sell tendency and low volatility in the coming period as emerging sentiments has moderate possibility to be positive.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.


Tags: Sentiment Analysis,  Market Sentiments,  Due Diligence,  Technical Analysis,  Bollinger band,  Fibonacci,  Candlestick,  Money Flow Index,  Proshare Research,  The Analyst,  Bullish Trend,  Bearish Trend,  Weak Bargain,  Profit Taking,  Price Correction,  Trend Reversals,  Volume Trend,  Price Performance,  Financial Services,  proshareng.com,  Nigerian Stock Exchange,  Equities Market,  Investors,  Shareholders,  Stock Recommendations,  UBA,  Dangote Sugar,  IHS, NACHO, 


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