TRADERS WATCH 8

 The nation’s stock market during the week had a mixed performance but stilled closed in the green. The diverse sentiment were as a result of investors and analysts interpretation of the impact of the recent hike in interest rate by Central Bank of Nigeria (CBN) at its last MPC meeting on the economy and the market, even as many corporate earnings reports released (mostly Q2) were below market expectations. This was unarguably a pure reflection of a struggling economy that in depression.  The increasing volume of sell positions during the last two trading seasons of the week under view were signals that many investors are running for safety back to money market instrument to watch the trends, despite the high inflation rate that will wipe away any returns that is below the current 16.5% inflation rate.  The delayed implementation of palliative by the government, high cost of living and the recent hike in interest rate that will increase cost of funds, are factors that will further slowdown the economy as there is no clear economic policy to revamp the system.

The composite NSE All-Share Index gained 350.49 points to close at 28,009.93 from an opening figure of 27,659.44 points, representing 1.30% growth on improved transaction volume, with sell position of 31% and buy volume of 69% for the week to reverse four straight weeks of decline.

NSEASI WEEKLY TIME FRAME

The market on a weekly time frame still remain bullish as it is trading above  20 and 50-Day moving average, forming ascending triangle chart pattern that indicates reversal or continuation of price action. Traders should watch out for first resistance at 28,805.45 on an uptrend, any move in the southward with first support level at 27,232.62.

Looking at technical indicator, NSEASI closed below the upper band by 37.2%, while MACD is bearish. RSI is reading 52.44 which still signifies strength. Money flow index has reversed down indicating funds are leaving the market. As stochastic oscillator and CCI are signaling sell position.  

GTBANK

GTBank moved up by 14.36% over the past week forming cup and handle on a two-year bearish channel with a strong resistance at the upper line of channel which it touched last Friday at N24.05 and possibility of break out to resistance level at N25.20, while pull-back is high with first support level at N21.87. As at the close of trading Friday, the buying volume position was 72% which selling volume 28% of the total volume transacted. It is currently trading above 50-Day moving average.  Traders and investors should watch market forces as market opens today.

Looking at technical indicators, GTBank closed below the upper band by 17.8%. Bollinger Bands are 3.83% wider than normal. RSI is reading 64.18 which appears to be bullish but signaling sell while MACD is just crossing above it signal line to signal bullish buy.  Other momentum indicators are signaling buy, with MFI turning down to indicate funds are flying out of the stock.

FCMB

First City Monument Bank (FCMB) rose by 6.06% for the week and recently formed a symmetrical triangle chart pattern that also indicates continuation or reversal of price action. Traders should watch the uptrend to first resistance level of N1.64 or a move down to support level of N1.29.  The stock is currently trading above the 20-Day moving average.

Looking at technical indicators, FCMB closed above the lower band by 44.9%. Bollinger Bands are 2.45% narrower than normal. MACD is currently bearish since it is trading below its signal line. RSI is reading 46.81 and appeared neutral, while other momentum indicators like CCI, RSI and SO signaled buy. MFI is looking up, showing that funds are entry the stock.

Custodian & Allied Insurance

Custodian & Allied Insurance moved 10.53% higher over the past week, as traders and investor react to the company's interim dividend that were released last week. The stock has been ranging before a pullback and recently retraced. Traders and investors should watch out for resistance level at N4.15 and any move down with first support levelat N3.50. The price action is above the 50-Day moving average, on a buy volume of 100 percent and selling volume of 0% as at Friday.

Looking at the technical indicators, CUSTODYINS closed below the upper band by 22.5%. Bollinger Bands are 7.08% narrower than normal.RSI is reading 57.30 and appears to be in the bullish while MACD is currently bullish. RSI, Stochastic Oscillator and CCI are saying sell. MACD is signaling buy.  MFI is looking up and strong indicating that funds are entry the stock. 

Lafarge Africa

Lafarge Africa (WAPCO) declined by 6.12% for the week after recently hitting a three-year low of N56 per share, following the company's profit warning notification, but forming a double bottom at this support level with high volume of trade.  Traders should watch the uptrend to first resistance level of N67 or a move down to support level of N44 each. The double bottom chart pattern formation supports reversal or continuation of price action.

Looking at technical indicators, WAPCO closed below the lower band by 9.5%. Although prices have broken the lower band and a downside breakout is possible, the most likely scenario is for the current trading range that WAPCO is in to continue. MACD is currently bearish since it is trading below its signal line. RSI is reading 28.78 and appeared to be oversold, while other momentum indicators like CCI and RSI have signaled buy. With MACD and SO signaling sell. MFI is looking down, showing that funds just started leaving the stock with selling volume position 100% as at close of trading on Friday.

AXAMansard Insurance

AXA Mansard Assurance moved by 10.26% higher for the week as traders and investors optimism for its expected interim dividend. Traders should watch for breakout at the resistance level of N2.50 OR move down to a support level of N1.86. The price action has been in a bearish channel, trading above its 20-Day moving average.

Looking at technical indicators, MANSARD closed below the upper band by 49.2%.  Bollinger Bands are 61.14% wider than normal. The large width of the bands suggest high volatility as compared to MANSARD's normal range. Therefore, the probability of volatility increasing with a sharp price move has increased for the near-term. MACD is currently bullish since it is trading above its signal line. RSI is reading 47.84 and appeared to be neural, while indicators like CCI and RSI are signaling BUY.  MFI is looking down.

UBA

UBA moved by 3.41% higher over the past week on a mixed sentiment as the bank new management team is set to take leadership mantle today, August 1, 2016. Traders should watch for a break out of the symmetrical triangle chart pattern on a strong resistance at N4.99, any move down should touch first support level at N3.89. UBA is trading below 20-Day moving average at N4.55

Looking at the technical indicators, UBA closed below the upper band by 31.6%. Bollinger Bands are 3.08% narrower than normal. The current width of the bands (alone) does not suggest anything conclusive about the future volatility or movement of prices. Currently the MACD is bearish since it is trading below its signal line. MACD is bullish since it is trading above its signal line. The MACD crossed above its signal line 21 period(s) ago.  Since the MACD crossed its moving average, UBA's price has increased to 46.30%, and has ranged from a high of N5.36 to a low of N2.83. RSI is reading 57.38and appeared strong while Stochastic Oscillator and CCI are signaling SELL. MFI and Chaikin Money flow are indicating entry of funds into the stock with buying volume position of 72 percent and sell volume of 28 percent as at close of trading on Friday.