TRADERS WATCH 19

The Composite index of the nation's equity market- the NSEASI gained 25.81 points to close last week at 27,861.03, from an opening figure of 27,835.22 points, representing a 0.09% growth on a relatively  average  volume of trades that signal caution on the part of traders and investors. This is especially as the few  earnings reports released so far bear mix performance. 

Also noteworthy for the market, especially as it opens today for a fresh week of trading activities, is the fact that the National Bureau of Statistics (NBS), on Friday evening released data showing that consumer Price Index (CPI) or inflation rate for September rose to 17.9% from 17.6% in August.

Buying volume of total transactions for the week was 12%, while selling position was 88% to continue the previous week’s mixed position of market players.  

NSEASI WEEKLY TIME FRAME

The NSEASI on a weekly time frame has in recent times side trended to form a symmetrical triangle with index trying to break out to confirm continuation of trend as the strength of the trend and direction are increasing as ADX is above 20. The index is trading above the 50-Day moving average, still supporting bull transition. This is a signal that the market has a possibility of providing follow through as we enter into a new week of trade with more earnings reports likely to hit the market. 

Traders should watch out for first and second resistance levels at 28,488.00 and 28,875.74 respectively, and any move down with first support level at 27,650.30 and second support at 27,450.91.

Looking at technical indicators, the NSEASI closed above the lower band by 39.7%, while MACD is just bearish as it cross below it signal line a day ago. RSI is reading 51.17, which is relatively strong. Money flow index has reversed down, indicating that funds are exiting the market. MACD and CCI are signaling EXIT position while SO and RSI are saying enter.

CAVERTON

Caverton Offshore moved 13.43% higher over the past week on a positive sentiment owing to its low price attraction to traders. But in recent years, the stock has  continued its one and half-year down trend  which was as a result of poor financials and the nature of its services. Traders should watch for first resistance level of N0.95 and second resistance level of N1.05 or reverse down to touch first support level at N0.70 and the second support level will be at N0.64 per share. The stock is trading below its 20-Day moving average at N0.75 per share.  The current trend is weak. 

Looking at the technical indicators, CAVERTON closed below the lower band by 1.0%.  Although prices have broken the lower band and a downside breakout is possible, the most likely scenario is for the current trading range that CAVERTON is in to continue.  MACD is still bearish, RSI is reading 21.24 which is oversold. All the momentum indicators are signaling oversold, MACD had a day bullish divergent already, MFI is indicating that funds are entering the stock. The Buy to sell volume indicator reveal 100% sell volume of the company.

ZENITH BANK

Zenith Bank moved 5.41% higher  last week on a bull sentiment of 80% buy position and 20% sell volume. The price action has formed symmetrical triangle chart pattern that indicates continuation or reversal of trend. The stock is currently trading below its 20 and 50-day moving average.  The current trend is strong above ADX of 20

Traders should watch for a break out or down of the symmetrical triangle chart pattern to continue  the trend to a strong resistant  level of N16.95 or reverse down to first  support  level at N14.00 each. 

Looking at the technical indicators,Zenith Bank closed above the lower band by 31.4%. MACD is bearish, but just crossed below its signal line two trading sessions ago.  RSI is reading 50.03 which signifies neutral. RSI, SO and CCI are indicating buy, just as MFI turn up to indicate that funds are entering into the stock. Last Friday buying volume was 100% while selling was 0%.

ACCESS BANK

Access Bank moved4.63% higher over the past week and is currently side trending to form cup and handle chart pattern, amidst a strong mixed sentiment of buy volume of 86% and sell position of 14% for the period, with strong resistant level at N5.95 each. Price action has remained below the yellow line with attempt to break out to continue the ongoing trend.  

Traders should watch for a break out of the yellow line to a strong resistance level of N5.93 or reverse down to first support level at N5.16. The bank is trading above its 20 and 50-Day moving average at N5.65 per share. 

Looking at the technical indicators, Access Bank closed below the upper band by 38.2%. MACD has remained bearish for the last two days. RSI is reading 58.06 which signifies strength. SO is indicating buy, while MACD, RSI and CCI are saying sell.  MFI is indicating that funds are entering the stock. The strength of the trend is strong. Last Friday buying volume was 63% while sell was 37%.

LAFARGE AFRICA

Lafarge Africa moved 9.96% lower over the past week on a strong bearish sentiment as it continues to trend downward making lower lows to touch its five years low on a strong support level of 42.50, despite several attempts to rebound. 

Traders should watch for a breakdown of the descending triangle chart pattern to continue a down trend to a first support level of N38.50 and second support of N35.40 or reverse up to first resistant level at N49.50 and second resistance RS at N56.40 respectively.  The stock is trading below its 20 and 50-Day moving average at N42.50 per share. 

Looking at the technical indicators, Lafarge Africaclosed above the lower band by 5.6%. MACD is bearish and RSI is reading 23.95, which signifies oversold. All momentum indicators are signaling buy, except MACD and SO. MFI is just UP, indicating fundshave started entering the stock. The weekly buy volume of the total transactions was 7%, while sell position was 93%.  But Friday's position was 38% for buy and 62% for sell. The current trend is strong as ADX is above 20.

GUINESS

Guinness moved 6.16% lower over the past week on bearish sentiment to continue its four-year down trend to its 2009 price position of N72.05, before reversing to close at N83, the low price attraction signal accumulation of stock by investors.

Traders should watch for a break out of the yellow trend line to first resistance level of N93 and second resistance level of N97 or reverse down to touch first support level at N76 and the second support level will be at N72 per share. The stock is trading below its 20-Day moving average at N83 per share.  The current trend is strong. 

Looking at the technical indicators, GUINNESS closed below the lower band by 8.9%.  Although prices have broken the lower band and a downside breakout is possible, the most likely scenario is for the current trading range that GUINNESS is in to continue. MACD is bearish as it just crossed below its signal line, RSI is reading 34.78 which is oversold. RSI and CCI are indicating BUY, while SO and MACD are saying sell. MFI is signaling exit of funds from the stock. The buy to sell volume indicator reveals 91% buy volume for the week and 9% sell volume.

FO

FO moved 9.24% lower over the past week on a mixed sentiment as it continues to trend downward, while making lower lows in the last seven months to a two and half-year  low of N145.12, forming a descending triangle that supports continuation of this trend or reversal.  

Traders should watch for imminent reversal or breakdown of the descending triangle chart pattern to a first support level of N135 and second support of N106 or reverse up to first resistant level at N158 and second resistance RS at N163 respectively.  The stock is trading below its 20 and 50-Day moving average at N145.12 per share. 

Looking at the technical indicators, FO closed above the lower band by 0.1%. MACD is bearish and RSI is reading 30.21, which signifies oversold. All momentum indicators are signaling buy. MFI is looking up, indicating that funds entering the stock. The weekly buy volume of the total transactions was 5%, while sell position was 95%.

Note:  Earnings season comes with disappointments and surprises, let this guide you as more numbers are expected in the market. It is very important to note that the marginal rise in the nation’s Consumer Price Index to 17.9% for September as a result of harvest season. You must therefore work towards ensuring that returns on investment of your portfolio is above 17.9%, otherwise your real return is negative. Plan your trade and trade your plans for success.

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