Sentiment Analysis Report – W/E June 15, 2012

Category: Cap Mkt Sentiments


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Sentiment Analysis Report – W/E June 15, 2012

 

Sunday, June 17, 2012/ Proshare Research
 
The Diagnosis
Analysis of the market activity in the week ended June 15, 2012 technically revealead increased in optimistic trading and improved bargain posture laced with speculative propensity in the investors’ trading pattern as against sustained increase in pessimistic trading with growing sell tendency observed in the previous week’s performance.
 
Further analysis revealed improved risk appetite as active patronage and unrelenting bargain approach was observed towards active penny stocks while stocks below N5.00 dominated investors’ radar in the week under review.
 
In the week just ended, moderate bargain tendency was observed across the major sectors as renewed bargain drive returned to bourse, mainly towards penny stocks. However, sustained and growing sell tendency was observed towards blue chip and value stocks in most active and major sectors.
 
Nevertheless, the renewed moderate bargain tendency outweighed the sustained sell posture as most blue chip and value stocks are yet to stablize while the short termist remained in control of market direction - a major reason for increase in speculative activities in the market.
 
To date, the indecisive posture of the market remains high, alongside waning activity level as sideline attendants appeared to take positions subtly, yet remain a significant feature.
 
Prescription and the likely expectation in the coming periods: There is no doubt that lack of positive news will continue to weigh down market gyration as bargain posture appeared weak.
 
Nevertheless, the chance of sustained market gyration in the coming period is not in doubt as we evisage an increase in speculative trading while market may experience unstable swings- a pointer to market price volatility in the coming periods.
 
 
 
 
Technically, market sentiments during the week favoured liquid and active stocks of Medium and Large CAP categories in Healthcare, Conglomerates, Industrial Goods and Financial Services sector(s) in that order which further revealed the sectors investors patronised in the week.
 
On the other hand, it was observed that market sentiments moved against the  Services, Consumer Goods, Construction/Real Estate, Agriculture and Oil & Gas sector(s)as sell sentiment was stronger in the sector(s).
 
 
Stock Trend & Direction
 
We conducted a review of stocks that have sharpened market direction and performance in the week - using technical tools like  RSI, MACD, VOLUME, MFI, CANDLESTICK, MOVING AVERAGES, BOLLIGER BANDS and ACCUMULATION & DISTRIBUTION to reveal investors’ sentiments towards the market movers.
 
 
THE BIG VOLUME
 
LAW UNION experienced continued moderate bargain posture and sustained positive sentiments in the week to record 15.4% gain as against 4.0% gain recorded in the previous week - an improved bargain trend was observed as the bargain posture turned active, recording 20% in two weeks trading.
The stock recorded astronomical volume growth in the week to top market volume- This signifies movement of big money and institutional trading, but without price movement in an uptrend. 
This may suggest end of the gaining trend while we observed sharp fall in money inflow index, indicating significant weakness in inflow of cash into the stock amid bullish volume posture.
In addition, the stock is trading in an overbought range, buttressing the active bargain trend observed in the week as revealed by RSI while the position of MACD in an overbought region further confirmed the active bargain trend.
This however indicates possible price correction anytime soon as the price position at the tip of upper Bollinger band suggests this further amid slight weakness observed in the uptrend momentum.
Nevertheless, the stock closed bullish in short term and remained neutral in long term period, indicating the stock is yet to attain full bullish mode as revealed by price moving average.
Technical Conclusion on sentiments: The chance to extend the uptrend in the coming periods has decreased due to loss of momentum in the last session despite significant surge in the volume trade. However, the penny posture of the stock may keep moderate bargain in shape. The chart below shows MACD, candlestick, RSI and volume analysis.
 
TRANSCORP experienced continued and active bargain tendency in the week to record 17.4% gain as against 24.7% gain recorded in the previous week - sustained positive sentiments was observed towards the stock amid impressive and unrelenting rally.
The stock bagged 178% gain in 7weeks to settle at N1.42kobo, and closed by 21% appreciation above one year resistance (N1.17kobo recorded on 10th May 2011).The outlook recorded in the week came in line with our position in our previous report.
However, presence of the bears was observed in the last two sessions while the stock lost momentum accordingly. This indicates possibility of price correction as the stock is overdue for strong reversal- due to its prolonged overbought posture as revealed by RSI and MACD since 25th May 2012.
Nevertheless, the stock maintained its bullish posture in both short and long term period as revealed by price moving average while MACD further revealed strong bargain posture in the week, buttressed by bullish volume trend.
The volume closed above its 15days moving average by 218% amid sustained northward trend in accumulation pattern and money flow index.
Technical conclusion on sentiments: There is moderate possibility of short term price reversal in the coming periods as the stock lost its uptrend momentum in the week- the low gain and flat position recorded in the last two sessions buttressed this further while the stock remained in a prolonged overbought range.
However, the stock may regain its momentum, considering the strong bullish volume growth recorded in the week. The chart below shows MACD, candlestick, RSI and volume analysis.
 
    
                                                   
THE GAINERS
 
WAPIC experienced continued bargain tendency and sustained positive sentiments in the week to record 24.1% gain as against 16.0% gain recorded in the previous week- sustained  price reversal and uptrend momentum was observed while the stock recorded 44% price appreciation after hitting its nominal value of N0.50kobo on May 31st 2012.
The stock appeared to be in an overbought range as revealed by RSI while the bullish position of MACD buttressed this further. Also, the price position above upper Bollinger bands further confirms the stock trading at its top- a cautious trading signal.
However, the overbought posture of MACD revealed the active bargain posture observed in the week while the outlook suggests the price may move higher for some time, having considered the overwhelming posture of bargain drive displayed in the last session. Though, cautious approach is advised due to overbought posture of the stock.
Nevertheless, the stock remained bullish in both short and mid-long term period as revealed by price moving average, buttressed by growing bullish volume amid northward trend in accumulation pattern and money inflow index.
Technical conclusion on sentiments: the stock has moderate chance to extend the uptrend for few sessions in the coming periods, considering the firm bargain tendency displayed against sell pressure in the last trading session.
However, trend reversal is not in doubt as the stock is trading at its top (overbought range). A lower price movement is required to take sell decision while we advise cautious bargain. The chart below shows MACD, candlestick, RSI and volume analysis.
 
NEIMETH experienced active bargain tendency and sustained positive sentiments in the week to record 23.6% gain as against 20.0% gain recorded in the previous week- sustained retracement and uptrend momentum was observed while the stock had appreciated by 53% in the last 3weeks, breaking its 6weeks resistance (N0.78kobo) to settle at N0.89Kobo .
Both MACD and RSI revealed the stock to be overbought, buttressing the sustained active bargain trend observed in the week. This further indicates the stock is trading at its top- a reliable signal for cautious bargain in the coming period.
In addition, the stock closed neutral in short term, and bearish in mid-long term period, indicating potential for possible continuation of uptrend as the stock is yet to attain bullish mode.
However, the outlook suggests the stock may extend the uptrend in the coming periods as the stock is yet to experience weakness in bargain and uptrend momentum amid sustained accumulation pattern while the money flow index maintained northward trend.
Technical conclusion on sentiments: The stock has moderate chance to extend the uptrend, considering the gaining pattern and growing bargain tendency while the stock is yet to experience weakness in its momentum.
On the other hand, a cautious approach is advised as the trend reversal is not in doubt while the overbought posture of the stock with 53% price appreciation recorded in recent time may incite profit taking drive. The chart below shows MACD, candlestick, RSI and volume analysis.
 
THE LOSERS
 
ETERNAOIL experienced active sell tendency and strong negative sentiments in the week to record -14.4% loss as against a modest gain of +0.3% gain recorded in the previous week- extensive analysis revealed prolonged and growing bearish trend as the stock continued to experience overwhelming sell pressure in the last eight weeks, recording -35% loss to settle at N2.50kobo, below 6 years low of N2.56 recorded on September 1st 2006.
In addition, the stock appeared depressed below oversold region as revealed by RSI while the bearish position of MACD further buttressed the active sell tendency observed in the week- a reason for the bearish posture of the stock in both short and mid-long term period as revealed by price moving average.
However, the candlestick pattern revealed a reversal signal, suggesting possible price retracement as sell pressure waned. The flat price position observed with significant decline in volume traded in the last session buttressed the waning sell pressure further.
Technical conclusion on sentiments: the chance of price retracement in near term has increased as the stock appeared bottomed -out amid waning sell pressure while the bulls are expected to hold their positions in the coming period. The chart below shows MACD, candlestick, RSI and volume analysis.
 
DANGFLOUR experienced sustained active sell tendency and continued bearish sentiments in the week to record -16.8% loss as against -3.3% loss recorded in the previous week- a sustained and continued price correction was observed as the stock continued to slide, following the year high of N7.29kobo recorded on May 17th 2012. Meanwhile, the stock had depreciated by -33% in the last four weeks as price correction persists.
The stock appeared depressed as it sets to hit oversold region while the bearish posture of MACD buttressed the active sell tendency observed in the week. Though, the stock retained its mid-long term bullish posture as revealed by price moving average.
However, the candlestick pattern revealed growing presence of bulls in the last two sessions as sell pressure waned, indicating possibility of the trend reversal in the near term. The gradual decline witnessed in the volume trend further revealed waning of sell pressure.
Technical conclusion on the sentiments: The stock has moderate possibility to establish support at N4.90kobo while the chance for price retracement has increased in the coming periods as sell pressure appeared waned.
However, the price trend may slide further as the relationship between price and moving average revealed wary postures of investors in the near term. The chart below shows MACD, candlestick, RSI and volume analysis.
 
  
 
 
Disclaimer: The information provided herein is our opinion only. Under no circumstances do any statements here represent a recommendation to buy or sell your stocks or make any kind of an investment. You are responsible for your own due diligence. To summarize, we do not provide recommendations nor do we make any claims or promises that any information here will lead to a profit, loss or any other result. They are for your guidance purpose only.
 


Tags: Sentiment Analysis,  Market Sentiments,  Due Diligence,  Technical Analysis,  Bollinger band,  Fibonacci,  Candlestick,  Money Flow Index,  Proshare Research,  The Analyst,  Bullish Trend,  Bearish Trend,  Weak Bargain,  Profit Taking,  Short-termists,  Price Correction,  Trend Reversals,  Volume Trend,  Price Performance,  Financial Services,  proshareng.com,  Nigerian Stock Exchange,  Equities Market,  NCM,  Investors,  Shareholders,  Stock Recommendations,  LAWUNION,  TRANSCORP,  WAPIC,  NEIMETH,  ETERNALOIL,  DANGFLOUR , 


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