Sentiment Analysis Report - W/E August 10, 2012

Category: Cap Mkt Sentiments

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Sentiment Analysis Report - W/E August 10, 2012

Saturday, August 11, 2012/ Proshare Research

The Diagnosis

Analysis of the market activity in the week ended August 12, 2012 technically revealed increased pessimistic trading amid sutained speculative tendency in the investors’ trading pattern as against increased risk appetite along with moderate market optimisms amid growing speculative tendency obeserved in the previous week’s performance.

Further analysis revealed price correction and increased market price volatiltiy as market retraced from overbought region amid increased risk appetite as investors appeared more speculative towards penny, small and medium CAP stocks.

In the week just ended, weak bargain drive, in the face of mixed sentiments and speculative tendency, was observed while renewed bargain drive returned to market after three days of unrelenting profit taking trend. Also, improved accmulation trend was observed amid strong profit taking tendency.

Nevertheless, the short term profit taking propensity outweighed the bargain side, taking support from the low patronage witnessed towards blue chips stocks and heavy counters while short termists dominate market terrain - a major reason for increased volatility in the market.

To date, the indecisive posture of the market remains high, alongside increeased activity level as sideline attendants appeared more cautious, yet remain a significant feature.

Prescription and the likely expectation in the coming periods: The key benchmark indices may consolidate on its new support level to climb above its 52weeks resistance in the coming period as it stepped out of overbougth region into trading range while profit taking tendency seems to have subsided amid renewed bargain drive with positive divergent observed in the week.

Notwithstanding, the inreased risk appetite and sustained speculative posture of the invetors towards small CAP stocks may increase market flunctuations in the coming periods.

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

LAWUNION experienced weak bargain tendency and mixed sentiments in the week to close at nominal value of N0.50kobo recorded in the previous week- the outlook reveals no bargain tendency towards the stock in the last four (4) weeks as the stock remained depressed at nominal price, following the -16.67% loss recorded during four (4) weeks reversal trend witnessed after the stock hit year high at N0.60kobo on June 15th 2012.

The stock recorded huge bearish volume in the week to close among most active stocks while it closed neutral in both short and mid-long term period amid low volatility as suggested by price moving average and Bollinger bands.

However, we observed waning sell momentum with traces of incoming possible bargain as suggested by MACD which closed above signal line while the candlestick pattern revealed suppressed bargain drive in the last session. Also, the money flow index closed northward while price momentum maintains moderate posture as revealed by RSI.

Technical conclusion on sentiments: The stock is likely to experience improved bargain posture in the coming periods as flow of money into the stock increased with moderate accumulation level. The depressed posture of the stock at N0.50kobo may stoke this considerably. The chart below shows MACD, candlestick, RSI and volume analysis.

ZENITHBANK experienced low-key bargain drive and mixed sentiments in the week to record meagre gain of +0.3% as against a modest gain of +3.1% recorded in the previous week.- The outlook revealed sustained lacklustre trading pattern towards the stock while it extends seven weeks uptrend on weak note, just we had observed in our previous report.

The stock retained its bullish trend in short term but closed neutral in mid-long term period, indicating continued decline in bargain tendency towards the stock as revealed by price moving average and buttressed by MACD which is set to dip below signal line.

Also, the last candlestick pattern was a reversal signal, indicating possible retracement trend while the price uptrend momentum experienced weakness as revealed by RSI. Similar weakness was observed in money flow index amid low accumulation pattern.

Technical conclusion on sentiments: There is increased chance for trend reversal in the coming periods as the stock may succumb to sell pressure due to sustained weak bargain drive and lacklustre trading pattern towards the stock. The chart below shows MACD, candlestick, RSI and volume analysis.

THE GAINERS

SMURFIT experienced continued bargain trend and sustained positive sentiments in the week to record 19.4% gain as against 9.1% gain recorded in the previous week. The outlook revealed sustained and growing bargain tendency towards the stock with 30.30% price appreciation experienced in the last 3weeks.

The stock maintains strong and consistent bargain tendency in the week, considering uptrend pattern and momentum as revealed by RSI while the strong positive divergent observed in MACD buttressed this further.

Meanwhile, the stock closed neutral in both short and mid-long term period, indicating the stock is yet to assume bullish trend as revealed by price moving average- an indication of possible extension of the uptrend.

Also, there was improved accumulation pattern towards the stock in the week along with impressive cash inflow into the stocks as revealed by money volume index. However, the volume pattern suggests enthusiastic sell pattern from sell side.

Technical conclusion on sentiments: the stock has moderate chance to sustain the uptrend, considering the sustained money flow into the stocks amid growing bargain drive towards the stock. The chart below shows MACD, candlestick, RSI and volume analysis.

UTC experienced sustained active and stronger bargain tendency and improved positive sentiments in the week to record 19.4% gain against 17.5% gain recorded in the previous week, just as we had envisaged in the previous week- The outlook reveals growing investors' bargain drive toward stocks with sustained uptrend to record 50.94% price appreciation in the last 4weeks.

The outlook recorded in the week came in line with our position as we had envisaged in the previous sentiments analysis report.

The stock closed bullish in both short and mid-long term period, indicating sustained positive sentiments and growing bargain drive as revealed by price moving average. The growing bargain trend and uptrend momentum buttressed this further as revealed by MACD and RSI.

Also, we observed sustained cash inflow into the stock along with sustained accumulation while the low volume observed suggests hold position of the investors towards stock. However, the stock remained overbought and appeared over due for price correction as revealed by RSI while MACD revealed similar position.

Technical conclusion on sentiments: there is moderate chance for the stock to extend the uptrend in the coming periods as incoming sentiments appeared positive and bullish. However, the short term retracement is not in doubt as the overbought posture of the stock in long overdue and may ignite price correction. The chart below shows MACD, candlestick, RSI and volume analysis.

THE LOSERS

WAPICexperienced continued weak bargain tendency and sustained negative sentiments in the week to record -12.7% loss as against -4.5% loss recorded in the previous week- the outlook revealed continued and prolonged downtrend in the last 6weeks with -34.52% loss, following the 4weeks impressive rally recorded by the stock to hit year high at N0.84kobo on June 29th 2021.

The stock closed bearish in short term and remained neutral in mid-long term, indicating the stock is yet to attain full bearish mode as revealed by price moving average. The sell tendency maintained strong posture amid sustained falling momentum while the stock appeared depressed below oversold region.

Also, the stock experienced low volume trade as sentiments remained negative while the money flow index closed battered amid continued distribution. However, waning sell tendency was observed in the last session as the stock closed flat- an indication of possible reversal trend.

Technical conclusion on sentiments: the stock has low chance to retrace as the incoming sentiments appeared bearish. However, the depressed posture of the stock and waning sell tendency observed may initiate the retracement anytime soon. 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.