STANBIC battles mixed sentiments, crashes into oversold region

Proshare

Wednesday, October 28, 2015 5:14 PM / Research

Today, STANBIC recorded another huge loss of -7.50% to extend the fresh falling pattern observed recently after a prolonged sideways trading.

Against our expectation, the stock broke its short-term supports level two days ago as investors increased pessimistic postures, after 5weeks consolidation with a modest gain of 9.17%.

Market outlook revealed fresh and active sell-down propensity as sentiments appeared negative while the stock had  shed 16.52% in just 3days, erasing the 5weeks gain.

The ongoing bearish campaign on the bourse and the recent suspension of chairman of the bank on the ground of corporate governance could not be isolated from these sudden bearish postures from investors.



The stock maintained 22weeks price correction pattern, which had led to 36.00% fall in its market value between May 25th and October 28th  2015, following impressive 14weeks rally of 25.00% experienced between February 20th  and May 25th 2015 to hit Year-high at N30.00kobo.

 

In addition, the stocks slipped into an oversold region- a weaker position at N19.20kobo. Further analysis revealed strong possibility of huge sell-down as the stock had broken all its key retracement points.

To buttress this further, the lower breakout of 27% coupled with the breaking of its golden retracements levels suggests strong bearish bias towards the stock.


Market outlook in the week revealed active sell down with strong indication of unwillingness from both shareholders and investors to hold the stock at current price range.



Also, technical indicator revealed significant surge in sell tendency towards the stock while it closed neutral in both short-term and mid-long term periods as indicated by price moving averages.



Furthermore, the price analysis revealed unimpressive performance outlook as the stock posted -14.67% and -33.79% loss as its 3-month and 6-month returns respectively while its 52-week and YTD performance stood at -35.83%  and -28.89% respectively.

 



Conclusively, sub-sector/peer analysis further revealed the stock to be the among worst performing stocks in the last one year, which further suggests that the sentiments within the sub-sector remained negative towards STANBIC

 

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