Sentiment Analysis Report – W/E July 13, 2012

Category: Cap Mkt Sentiments

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Sentiment Analysis Report – W/E July 13, 2012

Saturday, July 14, 2012/ Proshare Research

The Diagnosis

Analysis of the market activity in the week ended July 13, 2012 technically revealead continued bargain tendency and firm optimistic activities with weak speculative actions in the investors’ trading pattern as against active bargain and sustained speculative propensity observed in the previous week’s performance.

Further analysis revealed weakness in bargain appetite as we had observed weak momemtum in the mid-week . meanwhile, the increased patronage towards value and big Cap stocks further suggests decline in investors’ risk appetite

In the week just ended, sustained low speculative tendencywas observed across the major sectors while improved active bargain activities gained moemetum, mainly towards value stocks.- a sustained value and cautious trading approach observed. However, continued mild sell tendency was observed mainly towards few active penny stocks in most active and major sectors.

Nevertheless, the sustained improved bargain drive outweighed the mild sell posture, taking support from blue chip and value stocks while the value investors dictate market direction - a major reason for less 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: considering the maket RSI at its top, market may experience short term retracement soon as we have observed slight weakness in market optmism level (frail bargain appetite observed in the week)- the strong gain recorded in few big caps saved the week as subtle profit taking is brewing.

Notwithstanding, the sustained bargain trend is not in doubt as investors may maintain hold positions towards half-year interim benefits while impressive Q2 results may spur moderate bargain trend.

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

UBA experienced continued bargain tendency and sustained positive sentiments in the week to record 5.6% gain as against 12.0% gain recorded in the previous week- the outlook revealed weak bargain posture while the stock experienced mixed sentiments amid price volatility. Meanwhile, the stock performance came in line with our position as envisaged in previous report while the stock recorded 18.31% price appreciation in the last two weeks.

However, the stock may experience profiteering soon as we have observed weakness in bargain momentum while the stock appeared overbought, buttressed by overbought posture of MACD. Also, the full black candlestick pattern (Black Marubozu) formed in the last trading day indicates incoming negative sentiments.

Similarly, the sharp fall in RSI further signifies weakness in the uptrend momentum with similar trend in money flow index and accumulation pattern amid bearish volume recorded in the last session.

Technical conclusion on sentiments: The incoming sentiments appeared mixed while the chance of possible price retracement in the coming periods has increased, considering the weak bargain posture and the weakness observed in the uptrend momentum. The chart below shows MACD, candlestick, RSI and volume analysis.

Diamond bank experienced continued bargain trend and sustained positive sentiments in the week to record 8.3% gain as against 6.0% recorded in the previous week- the outlook revealed low bargain sentiments and lacklustre trading pattern towards the stock to record 14.88% price appreciation in the last 4weeks.

The stock appeared bearish in both short and mid-long term as revealed by price moving average, indicating weak investors' appetite towards the stock in the recent time while this buttressed the low bargain sentiments mentioned above.

More so, the candlestick pattern formed in the last trading day, revealed overwhelming sell position during the session while the price lost uptrend momentum as revealed by RSI.

Also, the divergent position of MACD suggests weakness in bargain drive as the stocks could not sustain the new high of N2.6kobo recorded during the last session. The huge bearish volume recorded in the last session buttressed the weak bargain posture while the southward trend in Money flow index and accumulation trend buttressed this further.

Technical conclusion on sentiments: The incoming sentiments appeared negative as the stock witnessed overwhelming sell position in the last session while bargain drive appeared vanished accordingly, suggesting possible price retracement as revealed by last candlestick formation. However, the uptrend may continue if the bulls could regain consciousness. The chart below shows MACD, candlestick, RSI and volume analysis.

THE GAINERS

LIVESTOCK experienced continued active bargain drive and sustained positive sentiments in the week to record 21.1% gain as against 24.2% gain recorded in the previous week- the outlook came in line with our position as envisaged in the previous report while the trend revealed growing bargain tendency towards the stock with 104.21% price appreciation in the last three weeks.

The stock remained in overbought range as we had observed in the previous week, closing above upper Bollinger band by 27.1% amid bullish mode in both mid-term and long term period as revealed by price moving average. This further suggests good chance of sustaining the uptrend. Also, the overbought posture of MACD further reveals the stock trading at its top as noted above.

However, the price movement experienced slight weakness in uptrend momentum, indicating weakness in bargain drive while the last candlestick pattern revealed presence of profit takers during the session. RSI (momentum indicator) and money flow index also recorded slight weakness, though yet to trend southward while volume trend remained positive amid sustained accumulation.

Technical conclusion on sentiments: the stock is overdue for price correction with 104.21% appreciation while trading at its top- overbought range. However, the uptrend may extend in the next few sessions, considering the strong bargain drive and accumulation trend observed during the week.

Note: a cautious bargain approach is advised as buying at the top is not usually profitable. The chart below shows MACD, candlestick, RSI and volume analysis.

UBN experienced improved bargain trend and sustained positive sentiments in the week to record 22.0% gain against 2.1% gain recorded in the previous week- The outlook revealed sustained trend reversal in the last 5weeks with 46.69% price appreciation, following the new support level at N3.17kobo recorded on 15th June 2012.

The stock is currently trading within overbought range, trading above upper Bollinger bands by 9.9% amid short term bullish posture- indicating improved chance to extend uptrend.

Also, the position of RSI further revealed the stock trading at its top while similar trend was revealed by MACD in the face of weak accumulation trend while volume traded appeared significantly low far below volume moving average. More so, the price experienced slight weakness while the last candlestick pattern revealed presence of the bears.

Technical conclusion on sentiments: there is moderate chance for the stock to sustain the uptrend in coming periods. Nevertheless, the stock may succumb to profit taking tendency sooner, considering its overbought posture and weakness in accumulation trend. The chart below shows MACD, candlestick, RSI and volume analysis.

THE LOSERS

ROADS experienced continued sell tendency and sustained negative sentiments in the week to recorded -12.7% loss as against -4.9% loss recorded- the outlook revealed heavy sell tendency and strong bearish sentiments towards the stock, following the prolonged flat posture while the stock dipped by -19.53% in the last two weeks.

The stock closed below its bottom Bollinger bands by 13.3% while remained bearish in short term period as revealed by price moving average, suggesting increased possibility to extend downtrend. The RSI further revealed depressed posture as the stock closed far below its oversold region.

Also, continued and persistent distribution tendency was observed as revealed by volume trend, indicating growing sell pressure towards the stock while money continued to flow out of the stock as revealed by money flow index.

Technical conclusion on sentiments: the stock may continue the downtrend due to incoming and continued sell pressure towards the stock while incoming sentiments remained negative. However, trend reversal is not in doubt as the oversold and depressed posture of the stock may attract moderate bargain. The chart below shows MACD, candlestick, RSI and volume analysis.

RTBRISCOE experienced continued profiteering, as we had envisaged in the previous report, and sustained negative sentiments in the week to record -12.1% loss against -10.0% loss recorded in the previous week- the outlook revealed sustained intense profiteering and price correction trend, just as we had envisaged in our previous report, following the impressive 4 weeks rally with 80.34% price appreciation to record 11months high. The stock has plunged by -20.85% in the last 2 weeks.

There is strong sell tendency towards the stock as revealed by candlestick pattern while MACD revealed strong position of the profit-takers (short-termist), buttressed by continued sharp fall momentum in price trend as revealed by RSI. The bearish and insignificant volume posture of the stock indicates very low bargain appetite of investors towards the stock at the moment.

Technical conclusion on sentiments: the falling trend is gaining more momentum while the incoming sentiments remained negative, indicating increased chance for the stock to extend the price correction trend in the coming sessions. However, the trend reversal is not in doubt as money flow index retained its positive posture. 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.