Sentiment Analysis Report - W/E June 29, 2012

Category: Cap Mkt Sentiments

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Sentiment Analysis Report - W/E June 29, 2012

Sunday, July 01, 2012/ Proshare Research

The Diagnosis

Analysis of the market activity in the week ended June 29, 2012 technically revealead improved optimistic activities and sustained speculative tendency in the investors’ trading pattern as against low optimistic trading and weak bargain posture amid growing speculative tendency observed in the previous week’s performance.

Further analysis revealed improved bargain postures towards value (meduim and high priced) stocks while blue chip stocks are stablising into trading range. This further indicates the cuatious posture of investors which could be traced to the recent unstable trend in the market.

In the week just ended, sustained speculative tendency was observed across the major sectors while moderate bargain activities appeared improved, mainly towards value stocks. However, waning sell tendency was observed towards blue chip and value stocks in most active and major sectors.

Nevertheless, the moderate bargain tendency outweighed the mild sell posture, taking support from blue chip and value stocks while the short termist remained in control of market direction - a major reason for sustained 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: The improved optimism observed towards value stocks is likely to extend in the coming periods as investors may increase stakes in such stocks across the board for possible end of quarter benefits and cautious reasons while we expect this to sustain the continued moderate bargain tendency observed this week.

Notwithstanding, speculative trading will continue as we envisage moderate profit booking towards active penny stocks across the sectors while the value stocks will continue to stablise within the trading range amid market fluctuation.

Technically, market sentiments during the week favoured liquid and active stocks of Medium and Large CAP categories in Healthcare, Consumer Goods, Services, Financial Services and Industrial Goods 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 Oil & Gas, Agriculture, Conglomerates and Construction/Real Estate 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

UBN experienced weak bargain posture amid moderate sell tendency as sentiments appeared mixed in the week to record -1.8% loss as against 9.5% gain recorded in the previous week- The outlook revealed short term pull back amid active speculative tendency while the stock could not sustain the uptrend momentum recorded in the last two weeks with 19.87% gain.

The stock closed neutral in short term but remained bearish in mid-long term period, indicating low bargain trading as revealed by price moving average while the volume trend revealed overwhelming sell posture, buttressing the trend further.

Also, the bullish posture of MACD below the bars further suggests low bargain activities in the week as noted above while the outflow of cash observed buttressed the overwhelming sell posture as revealed by money flow index.

Technical conclusion on the sentiments: The incoming sentiments appeared mixed, though the stock has moderate chance to extend the downtrend in the coming periods, considering the new resistance level at N4.00 amid weak bargain posture and overwhelming sell posture. The chart below shows MACD, candlestick, RSI and volume analysis.

TRANSCORP experienced moderate sell tendency and mixed sentiments in the week to record -3.6% loss as against -21.1% loss recorded in the previous week. The outlook revealed a waning sell pressure as the stock is trying to establish new support level at N1.07.

The stock closed neutral in short term but remained bullish in mid-long term period, indicating the stock is yet to enter bearish mode as revealed by price moving average. This further shows an increased chance for the stock to consolidate its position around N1.07.

The bearish position of the MACD revealed the weak bargain posture in the week while the falling trend in RSI suggests overwhelming sell tendency amid cash out flow as revealed by money flow index. However, the last candlestick pattern is a reversal signal (black inverted hammer) with low reliability. This suggests the stock may experience uptrend soon.

Technical conclusion on sentiments: the incoming sentiments appeared mixed, though the chance for uptrend in the coming periods has increased significantly as the sell pressure appeared waned considerably while the last candlestick pattern is a reversal signal, suggesting possible pull back while the stock is trying to consolidate its position around N1.07Kobo. The chart below shows MACD, candlestick, RSI and volume analysis.

THE GAINERS

RTBRISCOE experienced continued and active bargain tendency amid sustained positive sentiments in the week to record 25.6% gain as against 12.0% gain in the previous week.

The outlook revealed consistent and sustained bargain tendency towards the stock in the last four weeks, recording 80.34% price gain while the stock hits 11months high to settle at N2.11kobo, above N2.07 recorded on 19th July 2011. Though, the stock is yet to break the 11months resistance level at N2.17kobo.

The stock closed bullish in both short and mid-long term period as revealed by price moving average, indicating active bargain posture while the bullish position of MACD buttressed this further. The consistent bullish volume trend revealed strong positive sentiments with active bargain drive, buttressed by northward trend in accumulation and money flow index.

However, the stock is trading at its top i.e. within overbought range as revealed by MACD and RSI while price position above upper Bollinger bands by 4.4% buttressed this further. This indicates that the price uptrend has increased chance to continue as the stock is yet to experience weak momentum.

Technical conclusion on Sentiments: the stock appeared overbought i.e. trading at its top while the steep uptrend indicates the upward price trend has good chance to continue, considering price position above Bollinger band and strong bargain tendency towards the stock.

However, short term price pull-back is not in doubt as profit taking tendency may outweigh bargain posture while 80.34% price appreciation in the last four weeks may incite the retracements. The chart below shows MACD, candlestick, RSI and volume analysis.

PAINTCOM experienced continued bargain tendency and sustained positive sentiments in the week to record 25.7% gain as against 5.6% gain recorded in the previous week. The outlook revealed an improved bargain posture in the week while sustained moderate bargain tendency was observed towards the stock to record 127.38% gain in 10weeks while the stock hits above 12months high of N1.90kobo (recorded on 13th June 2011) to settle at N1.91kobo.

The stock closed bullish in both short and mid-long term period, indicating the strong bullish posture of the stock as revealed by price moving average while the bullish posture of MACD buttressed this further.

Further analysis suggests the stock is overbought, trading at its top as revealed by RSI while the price position above upper Bollinger band by 0.6% buttressed this further- this suggests possible continuation of price uptrend amid sustained cash inflow and accumulation trend.

Technical conclusion on sentiments: the stock has moderate chance to continue the uptrend as the incoming sentiments appeared positive amid sustained bargain drive. However, the trend reversal is not in doubt as the impressive price appreciation of 127.38% (10weeks gain) may incite the possible profit taking combined with overbought posture of the stock. The chart below shows MACD, candlestick, RSI and volume analysis.

THE LOSERS

GTASSURE experienced moderate sell tendency and bearish sentiments in the week to record -10.9% loss as against 20.5% gain recorded in the previous week- a price retracement amid weak bargain posture was observed in the week which could be traced to the speculative trading pattern of the market as we had envisaged in our previous sentiments report.

The stock closed bearish in short term but remained neutral in mid-long term, indicating the low optimism as revealed by price moving average while bullish posture of MACD below the bars further buttressed weak bargain drive as noted above. Meanwhile, the unstable pattern observed in the RSI movement confirmed the low optimism posture of the investors.

Technical conclusion on sentiments: there is weak optimism towards the stock as investors remained speculative- this may push the stock further down. However, the stock may experience uptrend in the coming period while trying to establish support level at N1.31kobo as we expect the bulls to hold their positions. The chart below shows MACD, candlestick, RSI and volume analysis.

PORTPAINT experienced continued sell activities and sustained negative sentiments in the week to record -9.5% loss as against -4.7% loss recorded in the previous week. A prolonged sell tendency was observed as the stock extends 9weeks losing streak to record -51.03% loss while the stock appeared depressed to close at year low of N2.38kobo- an oversold region.

The stock closed bearish in both short term and mid-long term period, indicating strong pessimistic postures of investors towards the stock as revealed by price moving average while oversold posture of the stock buttressed this further as revealed by RSI.

Similarly, the negative posture of money flow index also revealed strong negative sentiments towards the stock as investors are dumping the stock unrelenting

Technical conclusion on sentiments: there is high possibility for the stock to extend the downtrend in the coming periods as we observed strong sell-off tendency towards the stock while it remained depressed in an oversold region. Nevertheless, trend reversal is not in doubt as the depressed posture of the stock may incite short term price retracement.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.