STERLNBANK: Participation phase has started


Wednesday, August 19 2015 08.40 AM / Harish Shahi, The Analyst 

A closer look on the daily chart of STERLNBANK reveals that earlier stock was falling down and making successive lower lows and lower highs; but after arriving at N2.00 level bulls reacted and did not allow further movement downwards and at this level we have so many consolidated sessions where both bulls and bears were fighting.

From long term prospective, we can see that a rounding bottom pattern is in the process of formation but we will get clear confirmation once stock trades and settles above N2.20 level in short term. A downtrend line was also lying on the daily technical chart but that line has been breached out from the bull’s pressure which is generating positive signal for bulls.

We can observe that bulls are in full of aggression and sustaining above all major and minor EMA lines. For the time being bulls are not providing any chance to bears to react.

The short term trend is down according to the daily swing chart, and momentum appears to be favour to the further upside. A sustained move above N2.20 will signal the presence of buyers and will provide the more strength to bulls; this could trigger acceleration to the upside with N2.50 as next target. 

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

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What Next?

Few consecutive bullish marabuzo candlesticks are generating totally bullish signal. Both RSI and CCI indicators are providing bullish signal from a positive territory and also generating bullish signal.

Intraday bias remains bullish on the stock as long as N2.00 level remains intact. The N2.50 level is key resistance level followed by N2.70 whereas N2.00 can be considered as key support level followed by N1.50 level.

Trade Idea:
Based on the charts and explanation above, traders and investors can buy at N2.15 for the target price of N2.30 and N2.50 level with the stop loss of N2.00 level.  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 charges   




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