TRADERS WATCH 20
The benchmark indicators of the Nigerian Stock market closed
negatively at the end of trading week, despite the ongoing earnings
season. The relative low volume of trade
in the period is a reflection of corporate earnings that were released so far
and low liquidity in the system as a result of weak macro-economic fundamental
that has been a serious concern for foreign and local investors.
The Composite index NSEASI shed 264.21 points to close last
week at 27,596.82 points, from an opening figure of 27,861.03 points,
representing a 0.95% decline on a low volume of trades that signal caution
trading and investing on the part of the investing community. The buying volume
of total transactions for the week was 33%, while selling position was 67% to
continue the previous week’s mixed sentiments.
NSEASI WEEKLY TIME FRAME
NSEASI on a
weekly time frame has broken down the symmetrical triangle with index closing
0.95 percent lower for the period to support the reversal or continuation of the
chart pattern. In this chart we plot the momentum and trending ability of the
market. When looking at this weekly chart you can clearly see that index
is trading above the 50-DMA and that the ADX (trending ability) continues to
trade above 20 and rise.
This is an indication that there is still room
for the market to run in this new week. The index is slightly below its 20 Day
moving averages and outside the symmetrical triangle supporting bear
transition. Traders should watch out for
first and second support level at 27,246.88 and 27,090.25 respectively, any
move up with 27,835.22 and 28,241.13 respectively.
Looking at
technical indicators, the NSEASI closed above
the lower band by 34.0%, while MACD is just bearish as it cross below it signal
line a day ago. RSI is reading 49.15, which is relatively neutral. Money flow
index has reversed up, indicating that funds are entering the market. MACD and
CCI are signaling sell position while SO and RSI are still indicating buy.
Guaranty
Trust Bank
GTBank moved
3.32% higher over the past week on a mixed sentiment of 41% buy position and
59% sell volume. The price action has formed double bottom chart pattern that
support the upward reversal of trend. The stock is currently trading above its
20 and 50-day moving average. Traders should watch for a
break out of the first and second resistant at N25.56 and N26.24 respectively
or reverse down to first support level at N23.10 and second support level at
N21.78.
Looking at
the technical indicators,GTBank closed below the upper
band by 45.9%. MACD is bearish, but just crossed below its signal line two
trading sessions ago. RSI is reading
55.57 which signifies strength. RSI is indicating buy, just as MFI turned down to signal that funds are exiting
the stock. Last Friday candlestick formation indicates reversal is imminent.
Wema Bank
Wema Bank
moved 3.17% higher over the past week on a mixed sentiment forming a descending
triangle chart pattern after downward trend making lower lows for almost ten
months, despite several attempts to rebound.
Traders
should watch for a breakout of the triangle chart pattern to continue a down or
up trend to a first resistant level of N0.70 and second resistant level of
N0.72 or reverse down to first support level at N0.63 and second support point
at N0.60 respectively. The stock is
trading below its 20 and 50-Day moving average at N0.65 per share.
Looking at
the technical indicators, Wema Bank closed above
the lower band by 26.9%. MACD is bearish and RSI is reading 43.37, which
indicate neutral. All momentum indicators are signaling buy, except MACD. MFI
is looking up, signifying that funds are entering the stock. The weekly buy
volume of the total transactions was 80%, while sell position was 20%. But Friday's position was 100% for buy and 0%
sell. The current trend is weak as ADX is below 20.
CAVERTON
Caverton
Offshore moved 13.16% 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
above the lower band by 13.3%. Although
prices have reversed up after broken the lower band, the most likely scenario
is for the current trading range that CAVERTON is to continue. MACD is still bearish, RSI is reading 27.94
which is oversold. All the momentum indicators are signaling oversold, MACD had 2 day bullish
divergent already, MFI is indicating that funds are entering the stock. SO and
CCI are saying buy. The Buy to sell volume
indicator reveal 100% buy volume of the company.
CADBURY
Cadbury
moved 16.21% lower over the past week on bearish sentiment to continue its two
years and some months down trend as the company recent release a negative
numbers to the market. Traders should
watch for a continued down trend to first support level of N12.46 and second
support level of N11.00 or reverse up to touch first resistant level at N15.56
and the second resistant level will be at N16.64 per share. The stock is
trading below its 20-Day moving average.
The current trend is strong as ADX is above
20.
Looking at
the technical indicators, Cadbury closed above
the lower band by 13.4%. MACD is still bearish, RSI is reading 36.38 which is
oversold. SO and CCI indicators are signaling SELL,
while MACD and RSI are saying BUY. MFI is indicating that funds are exiting the
stock. The Buy to sell volume indicator reveal 100% sell volume of the company
share.
Lafarge Africa
Lafarge
Africa moved 3.15% 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 Africa closed
above the lower band by 10.1%. MACD is bearish and RSI is reading 24.93, which
signifies oversold. RSI and CCI indicators are signaling buy, except MACD and
SO. MFI is UP, indicating funds are entering the stock. The weekly buy volume of
the total transactions was 100%, while sell position was 0%. The current trend
is strong as ADX is above 20.
Note; Earnings season comes with disappointments
and surprises, let this guide you as more numbers are expected in the market
this week.
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