TRADERS WATCH 22

The benchmark indicators of the Nigerian Stock Exchange (NSE) closed lower on the first trading week of November as fund managers and analysts continued to interpret corporate results that were released during the just concluded earnings season, while seeking to re-position their portfolios.

At the end, the Composite NSE All Share Index shed 312.61 points to close last week at 26,981.60 points, from an opening figure of 27,294.21 points, representing a 1.15% decline on a relatively improved volume of transactions to continue the bearish run that commenced in the earnings season month, due to disappointing numbers. 

For the index, crossing below psychological line of 27,000 shows the bearish sentiment for poor earnings position of many listed companies. Nothing shows this more than the 12% buying volume of total trades for the week and selling position of 88% to continue the bearish trend in the midst of weak market fundamentals.

    NSEASI WEEKLY TIME FRAME

The NSEASI on a weekly time frame continued a  downward trend after breaking down the symmetrical triangle with index closing 1.15% lower for the period. The momentum and trending ability of the market on a weekly time frame is strong while on a daily time frame is weak as ADX is below 20 just as –D1 has crossed the +D1 and is rising.  

This is an indication that the market may continue in the same direction in the new week as momentum is low. The index is trading below its 20-Day moving average. Traders should watch out for first and second support level at 26,689.21 and 26,446.96 respectively, any move up with 27, 294.21 and 27,596.82 respectively. 

Looking at technical indicators, the NSEASI closed above the lower band by 18.6%, while MACD is bearish in the last four trading day.  RSI is reading 44.55, which is relatively neutral. Money flow index is looking up, indicating that funds are entering the market. MACD and CCI are signaling sell position, while SO and RSI are still indicating buy. 

Last Friday, buying position of the total volume traded that day was 58%, while selling position was 42%.

     Lafarge Africa

Lafarge Africa moved 9.76% higher over the past week on a strong bullish sentiment following a long period of down-trend after making lower lows to touch its five-year low on a strong support level of N42.50 on low price attraction. The price action has formed a double top, signaling that reversal is imminent.

Traders should watch for a break out of the descending triangle chart pattern to continue an uptrend to a first resistant level at N58 and second resistant of N60 or reverse down to first support level at N50 and second support S2 at N47.20 respectively. The stock's current trend and direction are strong as ADX is above 20.

Looking at the technical indicators, Lafarge Africa closed above the lower band by 45.6%. MACD is bullish and RSI is reading 43.81, which signifies neutral. All the momentum indicators, including RSI, SO, CCI and MACD are signaling buy. MFI is up, indicating funds are entering the stock. The weekly buy volume of the total transactions was 100% and sell position, 0%.

   Eterna

Eterna Oil moved 4.27% higher over the past week on a mixed sentiment to recently form ascending triangle chart pattern. The positive financial and announcement of the closure date for its 25 kobo dividend is expected to drive the price. Looking at the ADX that is above 20 which signifies there is strength behind the move.

Traders should watch for a break out to the first resistance level of N3.15 and second resistance price of N3.41, or down trend to the first support level of N2.80 and second support level (S2) at N2.62 per share.The stock is trading above its 20 and 50-day moving average.

Looking at technical indicators,Eterna Oil closed below the upper band by 32.1%. MACD is one day bearish. RSI is reading 56.82 on a strong region. All other momentum indicators like SO, CCI and MACD are signaling sell. MFI has turned up, to indicate that funds are entering the stock with buying volume position of 36% and selling volume of 64%for the week.

Presco

Presco's share price over the past week was flat on a mixed sentiment due to its improved financials in a tight business environment to form a cup and handle chart pattern in the recent time with strong trend momentum and direction on the weekly and daily ADX are above 20 at 39.50 and 39.24 respectively.

Traders should watch the uptrend to break out the first resistance level of N45.30 and second resistance price of N48.50. Watch also for any move down to the first support level of N41.30 and second support level (S2) at N38.54 per share.The stock is trading above its 20 and 50-Day moving average.

Looking at technical indicators,Presco closed below the upper band by 22.2%. MACD is bullish, RSI is reading 65.52 on overbought region, while other momentum indicators like RSI, MACD and CCI are signaling sell, while SO is indicating buy. MFI is flat, indicating that funds are not exiting and is not entering the stock at this moment.

Dangote Flour

Dangote Flour moved 11.68% higher over the past week on a positive sentiment owing to the impressive financials with the price action forming symmetrical triangle, a chart pattern that supports continuation of trend or reversal. The stock is trading above its 50-Day moving average at N3.15 per share. The current trend is strong on daily time frame as ADX is above 20 at 48.66 which indicates there is strength behind the trend. Traders should watch for first resistance level of N4.20 and second resistance level of N4.65 or reverse down to touch first support level at N3.75 and the second support level will be at N3.51 per share. 

Looking at the technical indicators, Dangote Flour closed above the lower band by 36.7%. MACD is still bearish, RSI is reading 50.11 which is NEUTAL. RSI and MACD are signaling sell, while CCI and SO are saying buy. MFI is looking up which indicates that funds are entering the stock.  The buy to sell volume indicator reveal 62% buy volume and 38% sell position.

Oando

 

Oando  moved 16.73% lower over the past week on a bearish  sentiment due to negative third quarter performance score-card, despite its low price attraction to traders to reverse the one and half-year down trend which was as a result of poor financials. Traders should watch for first resistance level of N5.32 and second resistance level of N6.00 or reverse down to touch first support level at N3.75, while the second support level will be at N3.51 per share. The stock is trading above its 50-Day moving average at N3.68 per share. The current trend is strong on daily time frame as ADX is below 20 at 47.36.  But profit taking is imminent. 

Looking at the technical indicators, Oando closed above the lower band by 13.0%. Although prices have reversed up after breaking the lower band, the most likely scenario is for the current trading range that Oando is to continue. MACD is still bearish, RSI is reading 39.69 which is NEUTAL. All the momentum indicators are signaling BUY, except MACD. MFI is indicating that funds are exiting the stock. The buy to sell volume indicator reveals 11% buy position, as against 89% sell.

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