FO: Stock has presented a second buying opportunity

Proshare

Tuesday, December 22, 2015 10.00 AM / Harish Shahi, The Analyst 

A closer look on the daily chart of FO reveals that earlier stock was heading towards north side and was rising up by taking support from the uptrend line and making successive higher highs and higher lows.

Stock was constantly moving up from N150.00 to N290.00 level but after arriving at overbought territory we saw some profit booking in terms of retracement. As the bulls could not sustain at that level and bears took the charge at an initial level.

From technical perspective, we can see that it has retraced almost 38.2% Fibonacci retracement level of the rally. Well it’s a second opportunity to buy for those who have missed earlier. The retracement was limited to N224.00 level and bulls started again to move up. The way the bulls are reacting seems that they are approaching the N290.00.

Stock is trading below all major and minor EMA lines and providing neutral to bullish signal. Stock settling above N270.00 level will provide further presence of the bulls and will also more strength to the bulls; this could trigger acceleration to the upside with N290.00 as next target.

All odds are in favor of the bulls and indicating a bullish signal. Both investors and traders are displaying bullish tendency towards the stock for the time being.



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What Next?
A dragonfly doji candlestick followed by a hammer candlestick pattern which is generating bullish signal for the time being. A bullish crossover on MACD indicator is also favoring the bulls. Both RSI and CCI indicators are providing bullish signal from a negative territory.


Intraday bias remains bullish on the stock as long as N220.00 level remains intact. The N
280.00 level is key resistance level followed by N300.00 while N220.00 can be considered as key support level followed by N200.00 level.


Trade Idea:
Based on the charts and explanation above, traders can buy this stock at N254.00 level for the target price of N280.00 and N1300.00 with tight stop loss of N220.00 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


Related NEWS

FO declares N4.29 billion PAT in Q3’15 result,(SP:N270.00k)

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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