Analysis of the market activity in the week ended July 06, 2012 technically revealead active bargain tendency and sustained optimistic activities laced with low key speculative trading in the investors’ trading pattern as against improved optimistic trading and sustained sepculative tendency observed in the previous week’s performance.
Further analysis revealed sustained and improved value investing amid sustained patronage towards penny stocks while blue chip stocks continued to consolidate on their new support level. This further indicates a risk-avert posture of the investors as we observed moderate decline in investors’ risk apetite.
In the week just ended, low speculativetendency was observed across the major sectors while moderate bargain activities gained moemetum, mainly towards value stocks. However, mild sell tendencywas observed mainly towards few active penny stocksin most active and major sectors.
Nevertheless, the improved bargain tendency outweighed the mild sell posture, taking support from blue chip and value stocks while the value investors dictate market direction - a major reason for less speculative activities in the market.
To date, the indecisive posture of the market remains high, alongside waningactivity level as sideline attendants appeared to take positions subtly, yet remain a significant feature.
Prescription and the likely expectation in the coming periods:The strong buy and hold posture of investors as we have observed in the week may encourage sustained and steady moderate bargain in the coming week while we expect value investors to sustain dominance as more value stocks are likely to consolidate positions in the coming periods.
Notwithstanding, speculative trading tends to continue as we envisage continued moderate profit booking towards active penny stocks across the sectors while some value stocks may experience mild weight loss amid market fluctuation.
Technically, market sentiments during the week favoured liquid and active stocks of Medium and Large CAP categories in Agriculture, Consumer Goods, Financial Services, Healthcare and Industrial Goods 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 Oil & Gas, Conglomerates, Services, Construction/Real Estate and Natural Resources 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
FIRSTBANKexperienced improved positive sentiments with low bargain posture in the week to record 3.1% gain as against -0.1% loss recorded in the previous week- lacklustre trading pattern was observed towards the stock in the last four weeks as the stock records moderate price appreciation of 11.17% while trying to consolidate on its new support level at N10.60.
We observed weak bargain tendency towards the stock in the week as revealed by MACD while its neutral position in both short and mid-long term as revealed by price moving average buttressed this further, indicating weak uptrend momentum. The volume trend, money flow index and position of RSI all revealed similar posture amid mild accumulation.
Technical conclusion on sentiments: There is moderate possibility for the stock to extend the uptrend as the incoming sentiments appeared positive while contraction of Bollinger bands has increased the chance of sharp price movement soon. However, bulls might lose positions as the lacklustre trading pattern may sustain. The chart below shows MACD, candlestick, RSI and volume analysis.
UBAexperienced improved bargain tendency and positive sentiments significantly in the week to record +12.0% gain as against -2.4% loss recorded in the previous- the trend analysis revealed renewed active bargain sentiments towards stock as the price consolidates on its new support level at N3.56kobo while the stock experienced dull trading and mixed sentiments in the last eight weeks to record -3.94% loss.
Also, weak uptrend momentum was observed in the last three sessions as sell pressure mounts while the neutral position of the price in both short and mid-long term buttressed the weak momentum noted above.
Meanwhile, the bullish posture of MACD indicates sustained positive sentiments, buttressed by bullish volume recorded in the last session with northward trend in money flow trend amid sustained accumulation posture.
Technical conclusion on sentiments: the sentiments towards the stock remained positive but there is moderate possibility that the stock may succumb to growing sell pressure in the coming periods while we have observed weakness in uptrend momentum in the last three sessions.The chart below shows MACD, candlestick, RSI and volume analysis.
DANGFLOURexperienced active bargain drive and sustained positive sentiments in the week to record 20.2% gain as against 6.9% gain recorded in the previous week- continued active and growing bargain tendency was observed towards the stock in the last three weeks while consolidating on its new support level at N4.9kobo to record +33.67% price appreciation in 3weeks.
The stock price experienced upside breakout to trade above upper Bollinger bands by 9.0%, indicating strong bargain drive. This further suggests high possibility for the stock to extend the uptrend.
The bullish posture of MACD above the bars further confirms the strong bargain drive towards the stock amid strong northward trend in money flow index with corresponding accumulation trend.
However, the stock seems to be trading at its peak, i.e. trading within overbought range as revealed by RSI, this suggests the stock may retrace anytime soon.
Technical conclusion on sentiments: the chance to extend the uptrend in the coming periods has increased while the incoming sentiments appeared positive. However, a cautious bargain approach is advised as the stock is currently trading at its top which technically suggests possible price retracement.The chart below shows MACD, candlestick, RSI and volume analysis.
LIVESTOCKexperienced continued and growing bargain tendency amid sustained positive sentiments in the week to record 24.2% gain as against 4.2% gain recorded in the previous week- sustained and growing bargain tendency was observed towards the stock to record 29.47% price appreciation in two weeks.
The stock appeared to be in full bullish mode as revealed by price moving average while the price position above upper Bollinger bands by 19.4% further revealed active bargain drive towards the stock, with moderate possibility to extend the uptrend in the coming periods.
However, the stock seems to be trading at its peak .i.e. overbought range as revealed by RSI while the MACD's posture at overbought range further buttress the overbought posture of the stock. This indicates possible retracement anytime soon as profiteering may sets in soon.
Technical conclusion on sentiments: The stock has good chance to extend the uptrend in the coming periods, considering strong bargain drive observed in the week. However, the trend reversal is not in doubt as the stock is currently trading within overbought range- this is point where speculators usually take short term profit. The chart below shows MACD, candlestick, RSI and volume analysis.
RTBRISCOEexperienced moderate sell tendency and negative sentiments in the week to record -10.0% loss as against +25.6% gain recorded in the previous week- the outlook revealed short term retracement as the stock hit 11months high recently while investors booked profit accordingly. The stock performance came in line with our position as envisaged in our previous sentiments analysis report.
There is strong sell tendency towards the stock as candlestick pattern revealed while the sharp fall in price momentum as revealed by RSI buttressed this further. The bearish volume trend further suggests growing sell pressure while money flow index experienced southward trend amid moderate distribution.
Technical conclusion on sentiments: The incoming sentiments appeared bearish as profiteering is gaining momentum while the stock is yet to slide into bearish mode- a potential opportunity for more profit taking in the coming periods. Nevertheless, the stock may consolidate into trading range as trend reversal is not in doubt. The chart below shows MACD, candlestick, RSI and volume analysis.
AGLEVENTexperienced sustained and increased sell tendency amid negative sentiments in the week to record -9.8% loss as against -6.8% loss recorded in the previous week- the outlook revealed prolonged sell tendency towards the stock and overstretched losing streak in the last 13weeks.
The stock records -50.99% loss to close depressed in an oversold region, recording 9years low of N0.71kobo (recorded on July 5th 2012) against N0.72kobo (9years support) recorded on June 2nd 2003.
However, the candlestick pattern revealed trend reversal in the last trading session with corresponding maximum price appreciation while stock recorded significant volume growth amid improved money flow index. This indicates renewed buying interest towards the stock, which suggests further that the stock may experience short term rally in the coming periods.
Technical conclusion on sentiments: maximum price gain at oversold region, with corresponding sharp uptrend momentum as revealed by RSI, is a strong reversal signal. To this regards, we envisage the stock may sustain uptrend in coming period, after hitting 9years low. 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.