TRADERS WATCH 36

Mixed Earnings Reports amidst Low Confidence weighs NSE Indicators down  

The nation’s stock market over the past week had mixed performance as Friday’sbear trading reduced the gaining momentum to close higher and the same time halt the three weeks down market that have dampened investors optimism for the ongoing earnings season which has reflected on the mixed reactions to the released scorecards.  

Meanwhile, the Composite index NSE All-Share Index gained 85.46 points to close last week at 25,250.37 points, from an opening figure of 25,164.91 points, representing a 0.34% growth on a low volume of trades that signal cautious trading, even when investors are repositioning and accumulating more in some positions as more earnings reports are expected to be in the market going forward into the month of march.  The buying volume of total transactions for the week was 42%, while selling position was 58% to reverse the previous weeks bear transition.

NSEASI WEEKLY TIME FRAME

The index on a weekly time frame hasalready broken down the symmetrical triangle but refused to breakdown the strong support level at 25,153.24 points, with the index gaining 0.34%higher for the period which supports reversal as   double bottom chart pattern is formed with yellow line being the base line. Despite the mixed sentiments toward the earnings season that managed to close positive, signaling an uptrend if earnings from the financial, service, petroleum and agribusiness beat market expectation.The trending  momentum and ability of the market is weak on a weekly and strong on daily time frame as ADX is 16.42 and 26.46 respectively, as the index is trading below its 20 and 50-Day moving average. 

The possibility of the market continuing in this direction or reversing is 50/ 50 as end of the month trading account balance and entering the peak of the earnings season. In all is a function of market forces.

Traders should watch out for first and second resistance level at 25,465.23 and 25,722.18 respectively, any move down to  first support level at 24,965.42 and  second support at 24, 720.61.

Looking at technical indicators, the NSEASI closed above the lower band by 17.2%, while MACD is bearish in the last 20 trading sessions. RSI is reading 38.27, which is relatively oversold region. Money flow index is looking up, indicating that funds are entering the market. MACD and SO still signaling sell position while CCI and RSI are indicating buy.

NB

NB moved 13.05% higher over the past week on a mixed sentiment as local investors exit positions for low income stocks, while offshore investors are buying as revealed by volume index of buying position of 67% and sell position of 33%.  Despite the mixed financials that led to the dividend cut. The price action has recently formed a symmetrical triangle within a falling channel, but retraced on mixed reaction to earnings report. 

On the strength of last week candlestick formation pull back is imminent. The current trend momentum and direction on a weekly and daily time frame are strong since ADX is above 20 at 27.96 and 32.30 respectively. 

Traders should watch out for profit taking to push the downtrend to the first support price of N115 and second support price of N102. Watch for any move up the first resistance level of N135 and second resistance level (R2) at N145 per share.The stock is trading below its 20 and 50 day moving average.

Looking at technical indicators, NB closed above the lower band by 19.7%. MACD is bearish for 16 trading sessions.  RSI is reading 45.43on relatively oversold region. All the momentum indicators like SO, RSI and CCI are signaling BUY, while MACD signaling sell. MFI is looking up on daily andweekly time frame. 

Analyst Opinion

Run with your short-term profit that is above its final dividend of N2.58 and reposition in other stocks with high dividend yield.

Unilever

Unilever moved 16.18% lower over the past week on a bearish sentiment as market players exit positions to target income stocks. This is despite the improving financials in a tight business environment to form a falling channel as price action is heading to breakdown the major support line to continue the pullback.  The trend strength and direction on a weekly and daily time frame are above ADX 20 at 31.05 and 36.63 respectively. 

Traders should watch as downtrend is likely to breakdown the first support at N26.40 and second support price of N24.50 and any move up the first resistance level of N31 and second resistance level (R2) at N34 per share. The stock is trading below its 20 and 50 day moving average.

Looking at technical indicators, UNILEVER closed above the lower band by 7.4%. MACD is bearish since 11 trading days and in an oversold region. RSI is reading 26.92 on oversold region. Momentum indicators are mixed as SO and CCI are signaling buy while RSI and MACD are in their oversold range but signaling sell.  MFI is looking down on daily and weekly timeframe. The buying to selling volume index revealed a weekly buy position of 0% and sell position of 100%.

Analyst Opinion

Wait to confirm reversal before jumping into the stock for short or long term position.

Aiico

Aiico fell by 8.33% over the past week on a bearish sentiment, despite its low price attraction to traders and investor, after it had remained on the down trend for almost two years as a result of mixed financials and the market direction. But with the double bottom formation of its price action, reversal is imminent especially with expectation of it full year 2016 financials. 

Traders should watch for first resistance level of N0.65 and second resistance level of N0.70 or reverse down to touch first support level at N0.53 and the second support level will be at N0.50 per share. The stock is trading below its 20-Day moving average at N0.55 per share. The current trend is strong on weekly and daily time frame as ADX is above 20. 

Looking at technical indicators, AIICO closed below the lower band by 6.5%.  Although prices have broken the lower band and a downside breakout is possible, the most likely scenario is for the current trading range that AIICO is in to continue.  MACD is bullish, RSI is reading 37.41.   The momentum indicators are mixed as SO and RSI are signaling sell while MACD and CCI are indicating buy. MFI is looking down to indicate that funds are exiting the stock. The buy to sell volume indicator reveal 100% sell volume of the stock for the week.

Analyst Opinion

Take position for short and long term as reversal is imminent

Forte Oil

Forte Oil fell by 14.96% over the past week on a bearish sentiment as pullback continued to formdouble bottom that supports reversal in the short time.  The trend momentum and direction is strong on weekly and daily as ADX is above 20.With selling volume position of 100% and buy position of 0% for the week. 

Traders should watch out for a breakdown of the first support price level of N48 and second support level of N41, any move up to the first resistance level of N56 and second resistance level at N63. The stock is trading below its 20 and 50-day moving average.

Looking at technical indicators,FO closed above the lower band by 15.61%. MACD is bullish for just one day trading. RSI is reading 29.42, as all momentum indicators like MACD, SO, CCI and RSI are signaling buy.  MFI is looking up, to indicate that funds are entering the stock.

Analyst Opinion

Take the very short term position as reversal is imminent