Analysis of the market activity in the week ended July 27, 2012 technically revealed sustained decline in market optimism along with weak bargain appetite amid mixed sentiments in the investors’ trading pattern as against mixed market sentiments with low optimism and decline bargain drive obeserved in the previous week’s performance.
Further analysis revealed lacklustre trading and partial profit taking activities as market experienced significant weakness in uptrend momentum within overbought region while bargain appetite declined accordingly as investors appeared more speculative.
In the week just ended, increased speculative tendency was observed while sustained decline in bargain appetite witnessed across the major sectors. Also,low key uptick in investors’ risk appetite was observed . However, profit taking tendency appeared gaining ground gradually as some value stocks shed weight accordingly.
Nevertheless, the sustained moderate bargain drive outweighed the profit taking posture, taking support from the heavy counters led by Dangote Cement Plcwhile the speculative trading dominates market terrain - a major reason for increased volatilityin the market.
To date, the indecisive posture of the market remains high, alongside moderateactivity level as sideline attendants appeared more cautious, yet remain a significant feature.
Prescription and the likely expectation in the coming periods: Market optimism may experience further decline in the coming period as the chance for short term price correction increased moderately with significant negative divergence amid overbought posture of the market.
Notwithstanding, the attractive postures of some value stocks may stoke risk appetite of the investors amid the growing speculative tendency – a pointer to market price volatility in the coming period.
Technically, market sentiments during the week favoured liquid and active stocks of Medium and Large CAP categories in Services, Industrial Goods, Conglomerates 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 Financial Services, Healthcare, Consumer Goods, Agriculture and Oil & Gas 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
Fidelity Bank experienced continued low bargain tendency and sustained positive sentiments in the week to record modest gain of 3.8% as against low key uptick of 1.5% experienced in the previous week- the outlook revealed sustained uptrend in the last 4 weeks to record 21.05% gain, following the year low and bottomed-out posture of N1.14kobo recorded on 29th June 2012.
The stock recorded huge bullish volume in the weak, though closed in neutral position but remain bearish in mid-long term period as revealed by price moving average, indicating the stock is yet to enter a bullish mode - a leverage to extend the uptrend, if the bulls can hold their positions.
However, we observed weakness in the uptrend momentum as revealed by RSI amid the weak bargain posture as revealed by MACD to buttress this further with corresponding -3.5% loss recorded in the last trading session- an indication of short term retracement.
Technical conclusion on sentiments: The incoming sentiments appeared bearish while the stock lost its uptrend momentum significantly as profit takers moved into action. However, the bulls may return soon as the stock has potential to extend uptrend movement in near term. .The chart below shows MACD, candlestick, RSI and volume analysis.
PORTPAINT experienced renewed active bargain tendency and fresh positive sentiments in the week to record 26.4% gain as against flat position recorded in the previous week. The outlook revealed renewed strong bargain tendency towards the stock to record 1 week impressive gain of 26.4%, following the prolonged (3weeks) flat postures.
The stock closed neutral in short term but remained bearish in mid-long term period as revealed by price moving average, suggesting possible extension of the uptrend in the coming period, buttressed by firm uptrend momentum as revealed by RSI while the bargain tendency remained very strong as suggested by MACD.
Also, the stock broke its upper band to close above the band by 3.3%, indicating increased chance to extend the uptrend, all things being equal. Meanwhile, the money flow index maintained northward trend while investors maintained hold positions with corresponding maximum price appreciation trend.
Technical conclusion on sentiments: the stock has good chance to extend the uptrend in the coming periods while the incoming sentiments appeared positive. Though, price volatility is not in doubt as profit taking tendency may increase speculative trading towards the stock. .The chart below shows MACD, candlestick, RSI and volume analysis.
IKEJAHOTEL experienced continued bargain trend and sustained positive sentiments in the week to record 17.3% gain as against 2.8% recorded in the previous week. The outlook revealed improved optimism towards the stock to record 20.56% price appreciation in the last two weeks, following the depressed posture and year low of N1.07 recorded on 13th July 2012.
The stock closed neutral in both short and mid-long term period as revealed by price moving average while the price closed above the upper Bollinger band by 12.6%, indicating an increased chance to extend uptrend further due to the growing bargain tendency observed as revealed by MACD with corresponding healthy uptrend momentum as suggested by RSI.
Also, the money flow index maintained northward trend amid sustained accumulation pattern. This indicates growing investors' interest towards the stock as revealed in the growing volume trend.
Technical conclusion on sentiments: The incoming sentiments appeared positive while the stock has moderate chance to extend the price uptrend as the bargain tendency remained firm. However, short term retracement is not in doubt as the general speculative propensity in the market may trigger profit taking tendency towards the stock. .The chart below shows MACD, candlestick, RSI and volume analysis.
ETERNAOIL experienced heavy sell tendency and renewed negative sentiments in the week to record -18.0% loss as against +10.8% gain recorded in the previous week. The outlook revealed overwhelmed bearish sentiments toward the stock to succumb to sell pressure, erasing the previous week gain while the stock extends the 3weeks loss further, after a week break to close at N2.28kobo below 6yrs low of N2.30 recorded on 25th August 2006.
The stock closed bearish in both short and mid-long term period as revealed by price moving average while the bearish posture of MACD buttressed this further with corresponding sharp price fall momentum as revealed by RSI.
This indicates intense sell tendency towards the stock amid continued distribution pattern while money flow index extends the southward trend further along with bearish volume.
Technical conclusion on sentiments: There is intense sell tendency towards the stock while the incoming sentiments appeared bearish, indicating the high possibility for further price decline in the coming period. However, the depressed posture of the stock below 6years low may ignite trend reversal. .The chart below shows MACD, candlestick, RSI and volume analysis.
RTBRISCOEexperienced renewed sell tendency and negative sentiments in the week to record -12.9% loss as against the modest gain of +2.4% recorded in the previous week. The outlook revealed sustained price correction, as we had envisaged fortnight ago in our report, following 11months high recorded on 29th June 2012 while the stock plunged by -29.38% in the last 4weeks.
The stock closed neutral in short term but remained bullish in mid-long term period as revealed by price moving average, indicating good chance for further price decline as stock closed below lower Bollinger band by 11.8% due to intense sell pressure, buttressed by bearish posture of MACD with corresponding increased falling momentum as revealed by RSI.
Technical conclusion on sentiments: the stock has moderate chance to extend the downtrend further as the sell tendency remained strong. However, the trend reversal is not in doubt as we observed slight uptrend in money flow index, indicating little inflow funds into the stock. .The chart below shows MACD, candlestick, RSI and volume analysis.
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