January 09, 2008 811 VIEWS
Proshare
Current Price  -                      N43.13

Last Volume Traded  -          12, 662, 329

52-Week High  -                    N57.41

52-Week Low  -                     N32.00

Risk/return ratio -                  1.98/1

 

 

First Bank of Nigeria Plc remains one of the most active stocks in the banking sector.

 

The share price charts shows that the stock is presently on an upward trend after some convergence with the 60-day moving average was observed last week, These upward trend shows the share price aiming for 30-day moving average.

 

If this is current trend we would expect the bullish move to become stronger with the various moving averages lying beneath. We see that the all-share index consistently outperformed the share price until August 2007 just after the bank’s highly oversubscribed hybrid offer when the share price reached its peak as investors swooped in to take advantage of the price appreciation.

 

The volume charts show that the stock has continued to enjoy investors’ patronage, with the highest in September 2007, when the share price dropped to N36.20, creating a good buying opportunity.

 

The momentum oscillator shows the share price just above the midpoint, testing the upward move. At its current price, the stock is neither overbought nor oversold. We see from the relative strength oscillator, that the share price is trading within the safety band.

 

At the current price level, we are of the view that the stock is trading at a huge discount, we would expect an upward price movement towards the bank’s release of its third quarter result. The stock’s risk/return ratio at the current market price stands at 1.98:1, we are therefore of the opinion that you set a stop loss target at the support price of N41.33 and aim at a resistance price level of N46.69 for medium term trading.

 

 

ADVICE TO READERS

While the Proshare website is renowned for its  accuracy and painstaking attention and commitment to factual data, we are not liable for any incorrect information included. We recommend that you make enquiries based on your own circumstances and, if necessary, take professional advice before entering into transactions. The authors of this report, Zenith Securities Limited and its employees accept no liability for any loss arising from the use of this information. Enquiries here should be directed to Hafford Udochukwu, Charles Ujomu or Tochi Okoronkwo on stockresearch@zenithsecuritiesng.com OR +234-1-2781202-4

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