Sentiment Analysis Report - W/E July 20, 2012

Category: Cap Mkt Sentiments

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Sentiment Analysis Report - W/E July 20, 2012

Saturday, July 21, 2012/ Proshare Research

The Diagnosis

Analysis of the market activity in the week ended July 20, 2012 technically revealead mixed market sentiments amid decline in optimisms and bargain strenght in the investors’ trading pattern as against continued bargain tendency and firm optimistic activities with weak speculative actions observed in the previous week’s performance

Further analysis revealed incoming price correction trend as market retraced from overbought position accordingly, following the sharp increase in bargain momentum during early sessions of the week as observed in mid-week report . Meanwhile, speculative tendency seemed to have gained cautiousness as strong profit taking propensity crept into market at the tail end of the week.

In the week just ended, increased speculative tendencywas observed while slight decline in bargain appetite witnessed across the major sectors. Also, a sustained value and cautious trading approach observed. However, profit taking tendency appeared gaining attention as some value stocks shed weight accordingly.

Nevertheless, the sustained moderat bargain drive outweighed the profit taking posture, taking support from blue chip and value stocks while the speculative trading dictates market direction - a major reason for increased volatilityin 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 overbought posture of the market is likely to stoke the downtrend in the coming periods as we have observed decline in bargain apetite and slight weakness in uptrend momentum at the tail end of the week- a brewing profit taking trend.

Notwithstanding, the expectations of impressive earnings report from more value stocks may cushion the sell tendency effect, and increase speculative trading significantly – a pointer to market price volatility in the coming period.

Technically, market sentiments during the week favoured liquid and active stocks of Medium and Large CAP categories in Agriculture, Conglomerates, Oil & Gas, Consumer Goods and Healthcare 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

Construction or Real Estate, Industrial Goods, Financial Services and Services 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 moderate sell tendency and mixed sentiments in the week to record -3.5% loss as against +5.6% gain recorded in the previous week. The outlook revealed short term price correction, following its overbought posture, as we had envisaged in our previous report.

The stock slipped into neutral position in short term while remained bullish in long term period as revealed by price moving average. This indicates the stock is yet to assume bearish position- an indication that the short term price correction may extend further as MACD and candlestick pattern revealed strong sell side while the sharp fall in RSI further buttressed the trend.

In addition, the huge bearish volume further revealed the strong sell side- a distribution trend with corresponding southward trend in money flow index.

Technical conclusion on sentiments: There is moderate chance for the stock to extend downtrend as the sell tendency appeared gaining momentum amid incoming bearish sentiments. However, there is increased possibility for the price to consolidate into trading range as revealed Bollinger band. The chart below shows MACD, candlestick, RSI and volume analysis.

AIICO recorded continued bearish sentiments and sustained sell tendency in the week to remain depressed at the nominal value of N0.50kobo. The stock records 9weeks flat position at N0.50kobo, following the -3.8% weekly loss recorded after hitting 4months high of N0.52kobo on 11th May 2012.

The stock recorded huge bearish volume to close among top volume for the week without price movement, the bearish volume closed above its 15days moving average by 663%- indicating increased sell-off tendency as money flow index remained at zero point.

Technical conclusion on sentiments: The stock remained depressed in an oversold region at nominal value of N0.50kobo while the incoming sentiments appeared bearish. However, the depressed posture of the stock may incite short term rally as the stock appeared bottomed-out. The chart below shows MACD, candlestick, RSI and volume analysis.

THE GAINERS

CONOIL experienced impressive bargain tendency and sustained positive sentiments in the week to record +21.4% gain against 4.7% gain recorded in the previous week. The outlook revealed improved bargain tendency towards the stock to record +24.18% gain in the last 2weeks, following the 2weeks flat posture recorded after the 3weeks bearish trend with -22.98% loss experienced recently to hit below 9years low at N19.61kobo on June 22nd 2012.

The stock is yet to attain a bullish mode as it closed neutral in short term while sustaining long term bearish outlook as revealed by price moving average. This suggests the stock has potential to extend uptrend.

In addition, the price broke its upper Bollinger band to close above by 12%, indicating strong bargain drive and increased chance to extend the uptrend scenario. The bullish position of MACD buttressed the strong bargain drive towards stock amid sustained northward trend in money flow index.

However, the stock appeared overbought as revealed by RSI while the price above upper Bollinger band buttressed this further. Though, weakness in uptrend momentum is yet to be observed.

Technical conclusion on sentiments: the stock has increased chance to extend the uptrend, considering the strong bargain drive observed during the week. However, short term price correction is not in doubt as the stock appeared overbought. The chart below shows MACD, candlestick, RSI and volume analysis.

THE LOSERS

CCNNexperienced continued sell tendency and sustained bearish sentiments in the week to record -21.2% loss against -10.2% loss recorded in the previous week. The outlook revealed sustained price correction trend with -29.17% loss experienced in the last 2weeks, following the impressive 4weeks rally with 17.19% price appreciation to hit year high of N6.00 on 6th July 2012.

The stock closed bearish in short term and remained in neutral position against long term period as revealed by price moving average, indicating the stock is yet to attain full bullish mode with potential to extend the downtrend amid strong sell tendency as re revealed by MACD.

The stock appeared depressed in an oversold region as revealed by RSI, buttressed by MACD position at oversold region with corresponding bearish volume amid prolonged southward trend in money flow index and accumulation pattern.

Technical conclusion on sentiments: The stock has moderate chance to retrace as sell pressure waned significantly while the depressed posture of the stock may trigger the reversal. However, continuation of the downtrend is not in doubt as the general bearish sentiments in the market may influence investors' bargain attitude. The chart below shows MACD, candlestick, RSI and volume analysis.

FIDSON experienced weak bargain trend and negative sentiments in the week to record -14.1% loss against +2.2% gain experienced in the previous week- The outlook revealed sustained lacklustre trading pattern towards the stock amid unstable trend with YTD performance of 0.0%- a function of weak bargain position.

The stock maintained neutral position in the both short term and long term period as revealed by price moving average, indicating the stock is still within ambit of bulls- a leverage for possible trend reversal soon.

The significant decline in sell pressure buttressed this further as revealed by MACD with similar pattern in volume trend. Also, the 3.9% gain witnessed in the last session confirmed the reversal, with corresponding sharp uptrend momentum as revealed by RSI.

Technical conclusion on sentiments: There is high possibility for trend reversal while the incoming sentiments appeared positive with corresponding 3.9% gain witnessed in the last session. However, the general weak bargain trend in the market may have over-bearing effect on the stock. 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.