Sunday, March 22, 2015/ Proshare Research
Analysis of the market activity in the week ended March 20, 2015 technically revealed a significant surge in profit-taking activities as both investors and short term traders engaged in active speculative trading.
Also, an extensive analysis revealed active distribution level as short term traders flooded market with huge supply. Both the Big and Medium capped stocks were severely hit while the low capped stocks experienced less sell-down activities..
In similar vein, volume analysis also revealed significant surge in sell tendnecy towards DIAMONDBNK, AFRIPRUD, ZENITHBANK, and UBA while investors displayed low-key bargain postures towards SKYEBANK, WEMABANK, CHAMPION and HONYFLOUR.
In addition, investors displayed fresh moderate sell activities in key active sectors, particularly in Services and Conglomerates while we observed sustained active sell activities in Healthcare, Financial Services and Agriculture sector(s).
Summarily, the bears rule the week, depressing the key benchmark index by -1,385.13 points against by -330.01 bpts recorded in the previous week to close at 29,334.23- ASI remains depressed and battered below its key resistance level at 41,957.50
In addition, the All Share Index traded within the range of 29,929.56 (week-high) and 29,243.91 (week-low) to settle at 29,334.23, below previous week’s low (30,719.36) by 1,385.13 points- This indicates a significant decline in optimism level when compared with previous posture. The outlook reveals active sell-down postures.
In the week just ended, market breadth closed negative at 0.28x against 0.83x recorded in the previous week on the back of sustained negative sentiments.
Likely trends in the coming periods: we expect sustained cautious trading pattern in the coming week as election tension may stoke lacklustre trading pattern.
Technically, market sentiments during the week stayed bearish towards liquid and active stocks of Medium Cap categories in the sector(s) but with stronger negative sentiments in Services, Consumer Goods, Conglomerates, Industrial Goods, Oil & Gas, Construction/Real Estate, Agriculture, Financial Services, Healthcare, which further revealed the sector(s) investors patronised in the week.
On the other hand, it was observed that mixed sentiments appeared stronger in ICT and Natural Resources 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
DIAMONDBNK experienced a sustained decline in bargain postures to close with negative sentiments in the week. The stock recorded -14.80% loss in the week against -5.80% gain position recorded in the previous week.
The outlook in the week revealed short term price correction pattern towards the stock after the stock had recorded +28.86% price appreciation in 16trading sessions to hit above 8weeks high at N4.51kobo.
In addition, technical indicator (MACD) revealed steady decline in bargain appetite towards the stock while it closed neutral in both short term and mid-long term periods as revealed by its price moving averages- this indicates growing presence of the bears towards the stock during the week.
More so, we observed a significant surge in bearish volume during the week as the stock failed to hold its new support line intact at N4.18kobo.
Technical conclusion on sentiments: The stock has moderate chance, with low reliability to extend the downtrend in the coming session, considering the growing sell postures and low breakout by 6.0% observed in the last trading session for the week. A cautious Signal! Chart below shows MACD, candlestick, RSI and volume analysis
HONYFLOUR experienced improved bargain tendency to close with positive sentiments in the week. The stock recorded +7.90% gain in the week against -4.10% loss position recorded in the previous week.
The outlook in the week suggests improved bargain tendency along with a reversal pattern towards the stock. The stocks had experienced prolonged (7months) active sell-down postures towards the stock. The stock had shed -35.75% of its market value to hit 27months low.
Technical indicator (MACD) revealed an improved and growing bargain tendency towards the stock. The stock closed neutral in short term but remained bearish in mid-long term periods as revealed by price moving averages, indicating improved presence of the bulls towards the stock.
Technical conclusion on sentiments: The stock has low chance, with low reliability, to reverse uptrend in the coming sessions, considering the weak bargain postures witnessed in the last trading session. A Cautious Signal! Chart below shows MACD, candlestick, RSI and volume analysis
DANGFLOUR experienced a weak bargain tendency to close with negative sentiments in the week. The stock recorded -17.80% loss in the week against +5.70% gain position recorded in the previous week.
The outlook in the week revealed a continued downtrend in the last 17weeks to record -55.73% loss of its market value to hit all time low of N2.90.
Technical indicator (MACD) revealed active sell tendency with a corresponding steep decline in price momentum in the week while the stock closed bearish in both short term and mid-long term periods -This indicates growing presence of the bears towards the stock.
Technical conclusion on sentiments: The stock has low chance, with low reliability, to reverse the downtrend in the coming sessions. We expect the stock to hold its support line at N2.89kobo. A Cautious Signal! Chart below shows MACD, candlestick, RSI and volume Analysis
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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.