PZ: Trend has changed as rounding bottom pattern is forming

Proshare

Thursday, December 17, 2015 10.10 AM / Harish Shahi, The Analyst 

A closer look on the daily chart of
PZ reveals that stock was falling down consistently due to pressure from the downtrend line and was making successive lower highs and lower lows. It seems the bears were beating the bulls black and blue and dominating them at every nook and corner.

Stock was constantly falling down from N34.00 to N21.22 level but after arriving at oversold territory bears could not manage their self and we have seen some panic reaction from the bull’s camp as rounding bottom pattern is in the process of formation. 


Stock has arrived at N24.00 level, as we can see on the daily chart. Stock has bounced from this level 2 times, earlier also, so the chances of buying from this level are very high. The way the bulls are reacting seems that they are approaching N35.00 level in short term.

Recent counter-attack has created hope for the bulls and the sentiments have changed from bearish to bullish. Well this is an early buy signal, we will get further bullish confirmation once stock trades and settles above N30.00 level and a valid breakout of N30.00 level will open the way towards N35.00 level.

Presently, stock is trading above all major and minor EMA lines and providing further bullish signal. Further presence of the bulls will provide more strength; this could trigger acceleration to the upside with N35.00 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.



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



What Next?

A bullish engulfing candlestick followed by a dragonfly doji pattern 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 N24.00 level remains intact. The N34.00 level is key resistance level followed by N36.00 while N24.00 can be considered as key support level followed by N22.00 level.

Trade Idea:

Based on the charts and explanation above, traders can buy this stock at N29.29 level for the target price of N34.00 and N36.00 with tight stop loss of N24.00 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

PZ declares N427.85 mln PAT in Q1'16 Result,(SP:26.20k)

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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