Zenith bank fake-out, retraces on weak bargain as it eyes 4months high

Proshare

Tuesday, October 22, 2013 2:00 PM / Research

 

Today, Zenith Bank Plc confirmed its price correction trend which was started yesterday, pulling back from N22.04kobo - well above its 3-months high, yet it failed to hit above its 4-months high (N22.25kobo recorded on June 12 2013) as was reported in one national daily yesterday.

 

Beyond the false alarm, we had expected the price to break-out of its consolidation position around N22.10kobo and N22.08kobo but it ended up faking-out.

 


The outlook at the end of the day came in line with our stated position enunciated in our most recent sentiments analysis report for the week ended 18th October 2013.

 

Recall that before the on-going price correction, the stock had maintained 6-weeks of steady moderate rally with +13.03% appreciation.

 

Thus far, and in the last two sessions; the stock had recorded a -2.22% loss as it failed to break-out of its ascending triangle formation. We expect the stock to establish a new support line at N20.98kobo (its first retracement level).

 

 

Furthermore, the technical indicators reveal a continued waning bargain posture with a corresponding steep decline in price momentum.

 

Though, the stock remained bullish in short term, it closed neutral in the mid-long term as revealed by its price moving average(s) – indicating that the stock is still trading within the ambit of the bulls.

 

 

Conclusively, the price performance analysis reveals a moderate performance as the stock posted low-key returns of +0.23% and +12.24% for both its 3-months and 6-months price performance(s) respectively while its 52-weeks and YTD performance stood at +18.86% and +10.57% gains respectively.

 
It would be fair to say therefore that Zenith Bank Plc closing at N21.55kobo, represents -9.45% below its 52-week high of N23.80kobo, recorded on Apr 03, 2013. 

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