FCMB: Stock arrives at Fibonacci golden retracement level


Thursday, August 14 2015 08.20 AM / Harish Shahi, The Analyst 

A closer look on the daily chart of FCMB reveals that earlier stock was making successive higher highs and higher lows and a steep rally was heading towards north side by taking the support of an uptrend line. The stock was trading and moving above all major and minor EMA lines and generating totally bullish signal. Well, after arriving at N3.75 level bulls lost control from the ride and stock tumbled down to N2.40 level.

Stock has topped out at N3.75 level and arrived at N2.40 which is a golden retracement level. By applying the Fibonacci retracement line from N2.0 level to N3.75 level, we can see that stock has retraced almost 61.8% which is known as golden retracement level so from here we are expecting some bounce. 

There may be a lot of demand in the market and N2.40 continued to be a very strong support. The short term trend is down according to the daily swing chart, and momentum appears to be in favour of the upside. A sustained move above N2.80 will signal the presence of buyers and will provide the more strength to the bulls. This could trigger acceleration to the upside with N3.50 as next target. 

All odds are in favor of the bulls and indicating a bullish signal. Presently, stock is trading below all major and minor EMA lines and candles are generating reversal signal. Both investors and traders are displaying the bearish tendency towards the stock for the time being.

To View Technical and Interactive Chart with Indicators like MACD, RSI, Stochastic, Moving Average, Bollinger, Williams %R, MFI ... Click HERE


What Next?
A hammer candlestick at strong key support level is providing us some reversal signal. Both RSI and CCI indicators are providing us trend reversal signal from oversold territory and generating neutral to bullish signal.

Intraday bias remains bullish on the stock as long as N2.20 level remains intact. The N3.20 level is key resistance level followed by N3.60 whereas N2.20 can be considered as key support level followed by N2.0 level.


Trade Idea:

Based on the charts and explanation above, traders and investors can buy at N2.40 level for the target price of N3.40 and N3.80 level with the stop loss of N2.00 level.  The tentative time frame would be 6-8 days.

NB: Return on Investment based on trade idea above does not take cognizance of brokerage commission charges   

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To View Technical and Interactive Chart with Indicators like MACD, RSI, Stochastic, Moving Average, Bollinger, Williams %R, MFI ... Click HERE

For further details, kindly contact analyst@proshareng.com 

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