STANBIC: Has stock really bottomed out ?


Friday, December 11, 2015 08.30 AM / Harish Shahi, The Analyst 

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

Stock is constantly falling down from N26.00 to N16.00 level but after arriving at an oversold territory, the bears could not manage their self as some panic reactions can be seen at the bull’s camp.

Stock has arrived at N2.33 level as we can see on the daily chart and followed by a few small candlesticks which are indicating the fight between the bulls and the bears. Yesterday, we saw a whole bullish sentiment during the trading session and stock closed at N17.00 level.

The way the bulls are reacting seems that they are approaching N20.00 level in short term. The recent counter-attack has created hope for the bulls and the sentiment has changed from bearish to bullish.

This is an early buy signal, we will get further bullish confirmation once stock trades and settles above N20.00 level and a valid breakout of N20.00 level will open the way towards the N26.00 level.

Presently, stock is trading below all major and minor EMA lines and if it sustains above N20.00 level then it will provide further bullish signal and will also provide more strength to the bulls; this could trigger acceleration to the upside with N26.00 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 bullish engulfing candlestick followed by a bullish marabuzo candlestick 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 bearish on the stock as long as N14.00 level remains intact. The N20.00 level is key resistance level followed by N26.00 while N14.00 can be considered as key support level followed by N12.00 level.

Trade Idea:
Based on the charts and explanation above, traders can buy this stock at N16.85 level for the target price of N20.00 and N25.00 with tight stop loss of N14.00 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

STANBIC posts 46.31 decline in PAT grows revenue by 10.34 in Q3 15 - Proshare 

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