GUARANTY experienced continued mild sell tendency and low bearish sentiments as the stock maintained gradual downtrend in the week to record -3.2% loss as against -1.3% loss recorded in the previous week – a sustained weak bargain drive was observed as the stock booked -10.86% loss in the last four weeks while the outlook revealed some price correction after the stock recorded a 13-month high of N17.25kobo on May 3rd 2012.
Nevertheless, the stock remained bullish in long term while maintaining a neutral posture in short term period, indicating that the stock is yet to attain full bearish mode as revealed by its price moving average - further indicating that the stock is likely to maintain its old support level (N15.40).
However, the last candlestick pattern (inverted hammer) gives a reversal signal, revealing the presence of bulls as the trend sets to retrace for possible short term rally. The sharp upturn in RSI buttresses this further as this suggests an increase in uptrend momentum while a similar trend was observed in both accumulation and money flow index (MFI).
Technical Conclusion on Sentiments: There is a high possibility that the stock will extend its uptrend in coming period as the emerging sentiments appear positive while we expect the bulls to hold their positions as stock is likely to maintain its old support level at N15.40. The chart below shows MACD, candlestick, RSI and volume analysis.
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