Sentiment Analysis Report – W/E June 22, 2012

Category: Cap Mkt Sentiments

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Sentiment Analysis Report – W/E June 22, 2012

Sunday, June 24, 2012/ Proshare Research

The Diagnosis

Analysis of the market activity in the week ended June 22, 2012 technically revealead low optimistic trading and weak bargain posture amid growing speculative tendency in the investors’ trading pattern as against increased in optimistic trading and improved bargain posture laced with speculative propensity observed in the previous week’s performance.

Further analysis revealed sustained moderate risk appetite as investors remained optimistic toward stocks that are below N5.00 (penny stocks), indicating that the blue chip and high priced stocks are yet to stablise within trading range.

In the week just ended, incraesed speculative tendency was observed across the major sectors as moderate bargain drive sustained, mainly towards penny stocks. However, continued but mild 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 few heavy counters as most blue chip and value stocks are yet to stablize within trading range 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 pressure of the quarter, in the face of no positive news and weak bargain posture may have overbearing impact on the market performance in the coming periods as we enivage passive and increased pessimistic trading.

Notwithstanding, sustained moderate buying and speculative trading is not in doubt as we expect the blue chip and medium priced stocks to stablise within trading range while market may seesaw- 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 Agriculture, Services, 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, Healthcare, Oil & Gas, Construction/Real Estate and Conglomerates 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

Diamond Bank experienced low bargain tendency and renewed positive sentiments in the week to record modest gain of 2.4% as against -13.6% loss recorded in the previous week- a renewed low key bargain tendency observed as prolonged sell pressure waned, following the 27.36% loss recorded in five weeks consistent sell down after hitting its year high of N3.05kobo on May 8th 2012.

The stock appeared depressed in an oversold region while remained bearish in short term period as revealed by RSI and price moving average. MACD revealed similar posture to buttress this further.

In addition, the candlestick pattern revealed resilient postures of the bears as the stock sets on retracement mission. The huge bearish volume witnessed recently buttressed this further, though slight accumulation trend was observed in the last session, indicating increased chance for the bulls to hold positions.

Technical conclusion on sentiments: The depressed posture of the stock may be an added advantage as trading sentiments appeared positive amid renewed northward trend in money flow index and accumulation trend. A cautious approach is advised as we expect the bulls to hold their positions. The chart below shows MACD, candlestick, RSI and volume analysis.

Zenith Bankexperienced improved bargain posture and renewed positive sentiments in the week to record 4.9% gain against modest loss of -1.9% recorded in the previous week- a lacklustre trading pattern was observed amid waning sell pressure as the stock experienced unrelenting sell tendency in the last six weeks, shedding -15.39% price weight after hitting Year high at N15.59kobo on May 3rd 2012.

Notwithstanding, the stock appeared gaining uptrend momentum gradually with possible growing bargain tendency as revealed by RSI while MACD crossed above signal line in the last session, indicating possible bullish trend all thing being equal.

In addition, accumulation tendency dominated the trading pattern in the week, buttressed with bullish volume trend observed in the week amid continued northward trend in money flow index.

This further indicates the possibility of the sustainable uptrend in the coming period while the chance of continued bargain tendency has increased, considering the recent supporting posture of stable cash flow into the stock. Also, the neutral position of the stock in both short and mid-long term period increased the chance of sustained uptrend as this is considered as leverage for the bulls to hold their positions.

Technical conclusion on sentiments: the incoming sentiments appeared positive as the stock established new support level at N13.25kobo while sell pressure waned. However, we advise cautious approach due to low key bargain posture while we expect the bulls to improve their positions. The chart below shows MACD, candlestick, RSI and volume analysis.

THE GAINERS

CUTIXexperienced active bargain tendency and improved positive sentiments in the week to record 15.0% gain as against flat (0.0%) position recorded in the previous week. a renewed bargain drive was observed towards the stock as the stock appeared depressed in an oversold region, following the -17.24% loss recorded recently to hit year low N1.20.

The stock recorded impressive uptrend momentum in the week while the bullish position of MACD buttressed the active bargain drive observed during the week. Meanwhile, the stock is yet to attain bullish trend as revealed by price moving average, indicating potential for possible bargain and sustained uptrend.

Similarly, positive trend was observed in the money flow index amid active accumulation pattern while the low volume posture revealed hold postures of the investors .i.e. unwillingness to sell in the face of continued cash inflow, indicating increased chance of sustainable bargain trend for few sessions.

Technical conclusion on sentiments: the incoming sentiments appeared positive with increased chance for sustainable uptrend as the stock is yet to attain bullish mode amid potential and moderate room for price appreciation. However, the trend reversal is not in doubt, we advise cautious bargain approach as the stock may succumb to speculative tendency. The chart below shows MACD, candlestick, RSI and volume analysis.

GTAssure experienced impressive bargain tendency and renewed positive sentiments in the week to record 20.5% gain as against -13.5% loss recorded in the previous week- renewed and active bargain drive was observed towards the stock, following the -23.27% loss recorded recently due to four weeks of active and prolonged sell tendency.

The stock appeared gaining uptrend momentum with increased chance to extend the uptrend further as MACD just turned bullish in the last session while the stock closed neutral in both short and mid-long term as revealed by price moving average, indicating potential for sustainable uptrend.

Also, the low volume trend further revealed hold positions of the investors as more of accumulation was observed in the trading pattern amid the northward posture of the money flow index, buttressing the renewed positive sentiments noted above.

Technical conclusion on sentiments: the stock has moderate chance to extend the uptrend as the incoming sentiments appeared positive, considering position of MACD and uptrend momentum while we are yet to note weakness in bargain trend. However, the stock may succumb to the speculative wave in the market as short term pull-back is not in doubt. The chart below shows MACD, candlestick, RSI and volume analysis.

THE LOSERS

TRANSCORP experienced active sell tendency and negative sentiments in the week to record -21.1% loss as against 17.4% gain recorded in the previous week- strong reversal trend was observed, following 178.43% gain recorded in unrelenting six weeks rally experienced. The outlook recorded came in line with our position in previous sentiments analysis as we had envisaged profit taking.

The falling trend is gaining momentum as revealed by candlestick pattern while the sell pressure outweighed the accumulation posture witnessed during the week. The sharp fall in RSI further revealed the falling momentum while the southward trend in money flow index buttressed this further.

Technical conclusion on sentiments: the incoming sentiments appeared negative. The falling trend may extend further as there was no bargain tendency towards the stock while cash seems to be flowing out of the stock as profit taking propensity dominated investors trading pattern. The chart below shows MACD, candlestick, RSI and volume analysis.

AVONCROWN experienced continued sell tendency and sustained negative sentiments in the week to record -18.2% loss as against flat (0.00%) position recorded in the previous week. The stock sustained downtrend since the beginning of the year, recording 47.81% loss. The stock remained depressed in an oversold region due to continued overbearing sell tendency while is yet to experience price appreciation in the year, trading below its all time low of N3.26kobo.

The stock is currently in a depressed and bearish mode as the strong sell tendency remained resilient while the negative positions of all indicators buttressed this further.

Technical conclusion on sentiments: The sentiments toward the stock remained bearish while the downtrend may extend further. However, the depressed posture of the stock may incite short term rally, though there is no reversal signal yet. 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.