TRADERS WATCH 9

The Nigerian equity market closed lower last week to continue its down trend after attempts to reverse was hindered by the lack of good news on economic data as inspiration, besides the weak corporate  earnings that kept the market in the red. As the exchange rate subsidy offered for this year's Muslim pilgrimage to Mecca by the CBN in a market driven FX system continues to attract condemnations in an nation where companies are positing negative earnings due to the new flexible forex policy.

Cautious trading by investors and traders continues as confidence in government policy and programmes are dwindling due to a lack of clarity in policy and implementation. The global markets were up due to some key economic data and positive statement from the major central banks that further assist investors on the world financial outlook. The few companies with positive Q2 numbers rallied during the week as investors reacted to their impressive performance. The composite NSE All-Share Index shed 584.07 points to close at 27,425.86 from an opening figure of 28,009.93 points, representing 2.09% decline on a weak transaction volume, with selling volume position of 100% and buying volumeof 0% for the week to reverse the previous week growth.

NSEASI WEEKLY TIME FRAME

The NSEASI on a weekly time frame is currently on top of the 20 and 50-Day moving averages as the two averages are trying to cross each other to signal continuation of the ongoing trend or a reversal. It has equally formeda descending triangle chart pattern between the two blue lines and also on the lower line of the long bullish channel that support break down or reversal of price action. Traders should watch out for first resistance at 28,263.02 or any move in the southward with first support level at 27,034.05.

Looking at technical indicator, NSEASI closed below the upper band by 46.9%, while MACD is bearish. RSI is reading 49.55 which sliding into weakness. Money flow index has reversed down indicating funds are leaving the market. As stochastic oscillator, MACD and CCI are signaling sell position.  

UBA

UBA moved 0.88% lower over the past week on a mixed sentiment as a new management team takes leadership mantle to drive the bank to new heights of profitability. Traders should watch for a break out of the symmetrical triangle chart pattern on a strong resistance at N4.78, any move down should touch first support level at N4.40. UBA is trading below its 20-Day moving average at N4.51 per share.

Looking at the technical indicators, UBA closed above the lower band by 35.0%.  MACD is bearish as it had just crossed below its signal line.  RSI is reading 47.47 which appears to be neutral. Stochastic Oscillator, CCI and MACD are saying sell. MFI is indicating that funds are leaving UBA stock with sell volume of 90 percent and buy position of 10 percent.

FCMB

First City Monument Bank moved by 9.29% lower over the week and recently formed a descending triangle chart pattern that also indicates continuation or reversal of price action. Traders should watch the uptrend to first resistance level of N1.41 or a move down to support level of N1.24.  The stock is currently trading below the 20 and 50-Day moving average on a daily chart.

Looking at technical indicators, FCMB closed above the lower band by 7.4%. Bollinger Bands are 47.17% narrower than normal. The narrow width of the bands suggests low volatility as compared to FCMB's normal range. Therefore, the probability of volatility increasing with a sharp price move has increased for the near-term. MACD is currently bearish since it is trading below its signal line. RSI is reading 37.35 and appears to be in over sold region, while other momentum indicators like CCI, RSI and MACD are signaling sell while SO signaled buy. MFI is looking up, showing that funds are entry the stock.

Lafarge Africa (WAPCO)

Lafarge Africa (WAPCO) declined by 8.66% for the week after recently hitting a three-year low of N49.40 per share, to signal reversal, following the company's profit warning notification, but forming a four-year 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 above the lower band by 5.5%. Bollinger Bands are 34.60% wider than normal. The current width of the bands does not suggest anything conclusive about the future volatility or movement of prices.MACD is in an oversold range. Prices may continue to move lower for some time. Wait for prices to move higher before considering any long positions. RSI is reading 21.29 and appeared to be over sold, while other momentum indicators like CCI, SO and RSI have signaled buy. With MACD signaling sell. MFI is looking UP, showing that funds have started entering the stock with buying volume position 100% as at close of trading on Friday.

7-Up Bottling Company

Seven Up Bottling Company Plc moved 9.62% lower over the past week, as traders and investor reacted to its unimpressive full-year-year and quarterly earnings released recently, coupled with low dividend payout. The stock has been trending down since the beginning  of the year. Traders and investors should watch out for the resistance level at N141 per share and any move down with first support level at N105. The stock had just set for decline or mark down phase, on a buy volume of 1.0% and selling volume of 99% on a huge volume as at Friday.

Looking at the technical indicators, 7-Up closed below the lower band by 13.7%. Although prices have broken the lower band and a downside breakout is possible, the most likely scenario is for the current trading range that 7-Up is in to continue.RSI is reading 4.84 and appears to be in serious over sold position while MACD is currently bearish.  RSI, Stochastic Oscillator and MACD are saying sell. CCI is signaling buy.  MFI is looking flat with 100 percent buying position as at close of trading on Friday.

VITAFOAM

Vitafoam moved by 2.01% lower over the past week after recently hitting a four-year low of N2.78 per share, following the negative earnings reports of the company. And the same time forming a double bottom at this support level with high volume of trade. Traders should watch the up-trend 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, VITAFOAM closed above the lower band by 18.6%. Bollinger Bands are 13.52% wider than normal. The current width of the bands (alone) does not suggest anything conclusive about the future volatility or movement of prices. MACD is currently bearish since it is trading below its signal line. RSI is reading 27.46 and appeared to be oversold, while other momentum indicators like CCI, SO and RSI have signaled buy. But MACD signaling sell. MFI is looking up, showing that funds just started entering the stock with buying volumeposition of 100% as at close of trading on Friday.

UNION BANK

UBN moved by 4.31% lower over the past week on a mixed sentiment on the bank financials. Traders should watch the price action within the bearchannel with first resistance at N4.50, any move down should touch first support level at N3.89.

Looking at the technical indicators, UBN closed below the lower band by 0.1%. This combined with the steep downtrend suggests that the downward trend in prices has a good chance of continuing.  However, a short-term pull-back inside the bands is likely. The MACD is in an oversold range. Prices may continue to move lower for some time. Wait for prices to move higher before considering any long positions. RSI is reading 11.83 which appeared to be oversold. RSI, SO and MACD are signaling sell while CCI is saying buy. Money flow index is flat and yet to give direction.