STANBIC: It’s time to take off….just enjoy the rally


Tuesday, October 13 2015 08.30 AM / Harish Shahi, The Analyst 

A closer look on the daily chart of STANBIC reveals that earlier stock was making successive lower lows and lower highs and heading towards south side. Stock is trading towards downtrend as bears were dominating the bulls at every nooks and crannies and was trading below all major and minor EMA lines.

It declined from N33.00 to N17.00 level in short term and convinced all the bears to make the downtrend. Well by looking at the chart below, we observed that the momentum was totally bearish and bulls were unable to manage their self.

After arriving at N17.00 we saw sudden penetration in the bull’s camp but that was limited to N26.00 level and again it declined to N21.00 level to retest the breakout of moving average.

From technical perspective, we observed that V shape recovery on the daily technical chart is providing strength to the bulls. The short term trend is up according to the daily swing chart and momentum appears to be in favour of an upside.

A sustained move above N26.00 will signal further presence of buyers and will provide more strength to the bulls; this could trigger acceleration to the upside with N32.00 as next target.

The way bulls are reacting it seems that they are approaching the N32.00 level in short term. Well odds are in favor of bulls and indicating the bullish signal.

Presently, stock is trading above all major and minor EMA lines and candles are generating bullish signal. Both investors and traders are displaying bullish tendency towards the stock for the time being.

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What Next?
A small morning star candlestick followed by a dragonfly doji candlestick is generating bullish signal. 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 N18.00 level remains intact. The N28.00 level is key resistance level followed by N32.00 while N18.00 can be considered as key support level followed by N15.00 level.

Trade Idea:
Based on the charts and explanation above, traders and investors can buy at N23.15 level for the target price of N28.00 and N32.00 level with the stop loss of N22.00 .The tentative time frame would be 8-10 days.

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

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