ZENITHBANK: Stock is falling down; double top pattern observed


Friday, November 27, 2015 10.10 AM / Harish Shahi, The Analyst 

A closer look on the daily chart of ZENITHBANK reveals that stock is trading in pure downtrend where every swing is making successive lower highs and lower lows and a downtrend line is lying on the daily technical chart which is providing strength to the bears.

Stock spring down from N25.00 to N14.00 level but after arriving at that level we saw some correction but that was just a trap for traders and investors.

The way the bulls are reacting seems that they are approaching the N14.00 level. From technical perspective, we observed double top pattern on the daily technical chart which is providing further bearish signal for the time being.

If it sustains above N16.00 level then it will signal further presence of sellers and will provide more strength to the bears; this could trigger acceleration to the downside with N14.00 as next target.

Stock is now heading south side, however, some corrections can’t be ruled out. All odds are in favor of the bears and indicating a bearish signal.

Presently, stock is trading below all major and minor EMA lines and candles are generating bearish 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?

Three black crow pattern followed by a hanging man candlestick is generating bearish signal. A bearish crossover on MACD indicator is also favoring the bears. Both RSI and CCI indicators are providing bearish signal from a positive territory.

Intraday bias remains bearish on the stock as long as N18.00 level remains intact. The N20.00 level is key resistance level followed by N22.00 whereas N14.00 can be considered as key support level followed by N12.00 level.


Trade Idea:
Based on the charts and explanation above, that this is not a time to buy the stock just wait & watch for the right time and let it fall down first till N14.00 level once it comes at that level then initiate your buying for the target price of N18.00 and N20.00 with the tight stop loss of N12.00 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

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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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