market sentiment analysis report for we 090612 - proshare

7/31/2019 Market Sentiment Analysis Report for WE 090612 - Proshare

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Market Sentiment Analysis for WE 080612

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Sentiment Analysis Report W/E June 08, 2012Sunday, June 10, 2012/ Proshare Research

The DiagnosisAnalysis of the market activity in the week ended June 08, 2012 technically revealeadan increase in pessimistic trading and growing sell tendency in the investors trading

pattern as against weak market optimism and continued sell tendencyobserved in the

previous weeks performance.

Digging deeper, we discovered a strong reversal mode as the falling trend garned

momemtum in the week, plunging futher the ASI below the 21,000 pyschologicalline driving by the growing sell tendency on top of increased market volatility.

In the week just ended,sustained weak bargaintendencywas observed across themajor sectors as reversal mode continued to gain tempo, mainly towards big andmedium CAP stocks. However, renewed and growing bargain drivewas observedtowards depressed stocks in few active sectors while their depressed posturesremained attractive.

Nevertheless, the sustained sell tendency continued to outweigh the weak buy side asmost active and liquid stocks are yet to stablize while the short termistremained in

control of market direction - a major reason for the continuedpessimistic activities in themarket.

To date, the indecisive posture of the market remains high, alongside waningactivitylevelas sideline attendants appeared to take positions subtly, yet remain a significantfeature.

Prescription and the likely expectation in the coming periods: More bottomed-outstocks are likely to decamp to gainers list in the coming period and so act as apossible game changer; while the expectation is that the blue chip stocks would

successfully stabilize within trading range (and find new support levels).

Meanwhile, the absence of more positive news in the market continues to stoke morepessimistic activities as stakeholders envisage a mild sell tendency to lure market

participants into transactions in the coming periods.

Market Diagnostic Score Card

Market Gauges Scores Remarks

ASI -4.83%

The negative posture was significantly impacted byactivities towards big and medium cap stocks acrossthe sectors. Weak bargain and continued reversaltrend was observed when compared to -1.21% lossrecorded in the previous week.

Market Breadth NegativeThis confirms the increase in pessimism andcontinued price correction witnessed in the weekwhich further reflects the weak bargain

Market RSI19.66

(depressed)

The market RSI shows that market is in depressedposture while gaining reversal momentum.Market RSI closed lower as against previous week of42.88. More importantly, this indicates further thatmarket has slipped below OVERSOLD REGIONmode. The chance of another round of rally hasincreased significantly. Nevertheless, the trend maypersist due to lack of positive news to driver bargains.

Indecision level (%) 57.53%

Illiquidity of some stocks, low purchasing power, lowrisk appetite, feeble confidence and wary posture ofinvestors reflected here significantly- This isconsidered too high- an improved posture against

60.29% observed in the previous week.


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Optimism Level (%) 15.71%

There is a decline in the optimism level of the marketagainst the previous outlook of 16.91%. However,there was weak bargain tendency as the optimisticactivity on the bourse still closed weak at 32.76%,against total market activity, from 31.74% recordedin the previous week.

Pessimism Level (%) 26.71%

There is an increase in pessimism level in themarket - an unimpressive posture over the previous

outlook of 22.79%. This shows that 26.71% ofmarket participants in the week were pessimisticabout the market.

Proshare Research

Technically, market sentiments during the week favoured liquid and active stocks of

Medium and Large CAP categories in Healthcare, Agriculture, Conglomerates andOil & Gas sector(s) in that order which further revealed the sectors investors patronisedin the week.

On the other hand, it was observed that market sentiments moved against theServices, Consumer Goods, Financial Services, Construction/Real Estate and

Industrial Goods sector(s)as sell sentimentwas stronger in the sector(s).

Sector Performance Sector Movers Direction & Trading Psychology

Healthcare 5.98%FIDSON, GLAXOSMITH,NEIMETH, MAYBAKER

Growing and sustained active bargaintendency observed in the sector(s),

indicating attractive posture ofstock(s)within the sector(s)

Agriculture 2.99% LIVESTOCK

Conglomerates 1.92% TRANSCORP

Renewed bargain sentiments observedin the sector(s) due to depressed and

attractive prices that followed the heavysell tendency observed in the previous

week

Oil & Gas 0.45% ETERNAOIL, JAPAULOIL

Growing and sustained active bargain

tendency observed in the sector(s),indicating attractive posture of

stock(s)within the sector(s)

ICT 0.00%

Natural Resources 0.00%Indecisive (No active transactions)

Services -0.10%LONGMAN, IKEJAHOTEL,ACADEMY, REDSTAREX

Waning sell tendency observed in thesector(s)- as active bargain sentiments

observed towards some attractive stockscushioned the sell pressure

Consumer Goods -0.31%DANGSUGAR, NB,

UNILEVER, DANGFLOUR,CADBURY

Mild sell tendency resumed in thesector(s)- Speculative trading pattern

dictates the direction amid weak bargain

posture

Financial Services -1.19%

UBN, GTASSURE, ACCESS,UNITYBNK, STERLNBANK,FIRSTBANK, FCMB, UBA,CONTINSURE, PRESTIGE,

FIDELITY BANK

Construction/RealEstate

-1.99% JBERGER, UAC-PROP

Continued and Growing sell tendencyobserved in the sector(s) as profiteering

dominates

Industrial Goods -2.33%ASHAKACEM, DANGCEM,CCNN, CUTIX, DNMEYER,

BAGCO, CAP, WAPCO

Heavy sell tendency observed in thesector(s)- Speculative trading patterndictates the direction as profit taking

tendency sets in

Proshare Research


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Stock Trend & Direction

We conducted a review of stocks that have sharpened market direction and performancein the week - using technical tools like RSI, MACD, VOLUME, MFI, CANDLESTICK,MOVING AVERAGES, BOLLIGER BANDS and ACCUMULATION & DISTRIBUTIONto reveal investors sentiments towards the market movers.

THE BIG VOLUME

First Bank experienced moderate sell tendency and negative sentiments to record -6.1% loss in the week as against the modest gain of +0.8% gain recorded in theprevious week supporting the weak bargain drive witnessed towards the stock as

distribution dominated the trading activities in the week while the general bearish trendin the market had an overbearing impact on the performance of the stock.

Be that as it may, the stock maintained its bullish range to close neutral and bullish inshort and mid-long term period respectively as revealed by price moving average,indicating the stock is yet to attain bearish mode. In addition, the two days bearish

position of MACD further buttressed the weak bargain drive observed in the week whilethe sharp fall in RSI revealed the active distribution and sell momentum amid bearishvolume posture.

Technical Conclusion on Sentiments: Barring unforeseen market price volatility, thestock has moderate possibility to extend the trend as the sell tendency gainedmomentum in the last session. The chart below shows MACD, candlestick, RSI and volumeanalysis.

Zenith Bank experienced waning sell tendency and mixed sentiments to record modestgain of +0.4% as against the -9.1% loss recorded in the previous week - a better

performance when compared with the recent four weekly consecutive losses, followingthe 12-months high of N15.59 recorded on May 3th 2012.

The outlook for the stock will suggest that we may have reached the end of current pricecorrection taking place, as the stock seems to stabilise around N13.25k to form a newsupport level. On the other hand, the bearish position of MACD suggests a weak bargainposture while the stock closed neutral and remained bullish in short and mid-long term

respectively as revealed by its price moving average indicating that the stock is yet toattain bearish mode.


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Technical Conclusion on Sentiments: The stock has a moderate possibility ofexperiencing an uptrend in the coming periods as sell pressures appear to have waned,

suggesting that the depressed posture of the stock may actually encourage new bargainsas revealed by RSI. The chart below shows MACD, candlestick, RSI and volume analysis.

THE GAINERS

MAYBAKERexperienced an improved bargain drive and sustained positive sentiment inthe week to record +26.2% gain as against +14.6% gain in the previous week as a

sustained bullish sentiment was observed towards the stock as its depressed posturecontinued to stoke sustain bargain drive in the week, just as we had envisaged in ourprevious sentiments analysis dated June 1st 2012.

Further analysis indicates that the stock is yet to attain bullish mode as it closed neutral

and remained in bearish range in both short and mid long term respectively as revealedby its price moving average, indicating a possible uptrend potential with growingbargain drive. The strong bullish position of MACD buttressed this further.

Additionally, we observed a continued inflow of funds into the stock while a similarpositive pattern was witnessed in the accumulation trend, buttressing the uptrendpotential further.

Curiously, the low volume trend affirms a hold position taken by investors who believe inthe company and have adopted the sentiment analysts position.

Technical Conclusion on Sentiments: the stock is yet to record weakness in uptrendmomentum since picking up, thus indicating a further uptrend potential in the comingperiods as revealed by its moving averages. However, a trend reversal is not in doubt as

bears remain in control of the market. The chart below shows MACD, candlestick, RSI andvolume analysis.


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TRANSCORP experienced continued bargain tendency and sustained positive sentimentsin the week to record +24.7% gain as against the +7.8% gain recorded in the previousweek - renewed strong bargain tendency was observed as the stock broke its 9-mthresistance level of N1.07(high price recorded on 02 August, 2011) during the week.

The outlook reveals an extra ordinary bargain drive as the stock sustained a 6-wksuninterrupted uptrend, recording a 137% price appreciation to settle at a new 12-mths

high of N1.21 with a growing bargain posture, despite the 5-wks general bearish trendin the market. However, analysis suggests that the stock is overbought i.e. trading at itstop, indicating possible reversal anytime soon as revealed by RSI and MACD. Though,the stock is yet to display bargain weakness as most momentum indicators maintained a

northward trend while the stock remained bullish in both short and mid-long term periodas revealed by its price moving average.

Technical Conclusion on Sentiments: The stock is overdue for price correction due toits prolonged overbought posture with a 137% price growth in the last six weeks.However, the bargain drive appeared very strong with potential to extend the uptrend asthe market is yet to see any weakness in the uptrend momentum. Nevertheless, we

advise a cautious bargain approach as short term retracement is not in doubt anytimesoon. The chart below shows MACD, candlestick, RSI and volume analysis.


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THE LOSERS

UBN experienced renewed sell activities and negative sentiments in the week to recorda15.5% loss as against the +5.6% gain recorded in the previous week - sustained pricecorrection trend was observed as the stock has been on the downtrend since 4weeksago, following the 5weeks uptrend experienced recently.

The outlook revealed active sell tendency as the stock recorded new lows throughout theweek. The bearish posture of MACD buttresses the sell tendency further as the stock

continues to slide towards the oversold region amid its bearish posture in both short andmid-long term period as revealed by the price moving average. In addition, thesustained bearish volume trend further reveals the active sell tendency as more ofdistribution was observed in the week amid sustained southward trend in money flow

index.

Technical Conclusion on Sentiments: the stock has a moderate tendency to extend

the downtrend in the coming sessions. However, a trend reversal is not in doubt as thestock tried to stabilize at N3.17kobo in the last two sessions while the contraction ofBollinger bands reveals the high possibility of a sharp price movement in near term. The

chart below shows MACD, candlestick, RSI and volume analysis.

ASHAKACEM experienced continued sell tendency and sustained negative sentiments torecord a -16.0% loss in the week as against the -2.9% loss recorded in the previousweek - continued price correction with significant growth in sell tendency was observedin the week as the stock has been on a downtrend for upwards of 5-wks to record the -

19% loss, following the 2-weeks rally witnessed recently.

The outlook reveals a growing active sell tendency and bearish sentiment while the stock

remains in a bearish mode in both short and mid-long term period as revealed by theprice moving average. Additionally, the stock appeared depressed to close weak at anoversold region; the prolonged bearish posture of MACD buttressed this further while thevolume trend and money flow index revealed similar negative trend amid continued

distribution.

Technical Conclusion on Sentiments: The sell tendency towards the stock remained

strong, pointing to a moderate possibility of a further decline in the price movement.However, a trend reversal may not be in doubt as the depressed posture of the stockcreates incentives for a bargain drive. The chart below shows MACD, candlestick, RSI and

volume analysis.


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Due DiligenceValuation/InvestmentRatio FIRSTBANK ZENITHBANK MAYBAKER TRANSCORP UBN ASHAKACEM

Book Value (N'm) 363,638 397,830 3,118 15,514 - 184,571 19,047

Book Value/Per Share 11.14 12.67 3.18 0.60 -10.90 8.51

Price to Book 0.00 0.00 0.00 0.00 0.00 0.00

EPS 0.75 0.61 -0.04 0.02 -3.69 1.60

PE 14.37 22.05 -49.84 60.18 -0.86 5.37

Profitability

ROE (%) 6.74% 4.83% -1.12% 3.35% 33.85% 18.75%

PAT Margin (%) 26.57% 26.57% -3.79% 100.78% -79.64% 17.19%

PBT Margin (%) 31.26% 31.80% -3.79% 118.45% -109.31% 22.92%

Revenue Growth 42.49% 33.36% -3.45% -22.44% -8.32% 8.49%

Proshare Research

Price Trend

Price Performance FIRSTBANK ZENITHBANK MAYBAKER TRANSCORP UBN ASHAKACEM

52 Weeks High 13.65 15.59 4.00 1.21 11.15 24.47

52 weeks Low7.95 11.45 1.23 0.50 1.96 8.01

3 Month's (%)-2.35% -2.88% -28.80% 108.62%

-44.97%

-22.02%

6 Month's (%) 27.06% 17.39% -1.66% 120.00% 51.67% -32.52%

12 Month's (%) -20.65% -10.00% -55.50% 31.52% 53.14% -64.07%

Price Trend

Current Price 10.80 13.50 1.78 1.21 3.17 8.57

15 Days MA 11.21 14.25 1.43 0.95 3.61 10.06

30 Days MA 11.07 14.56 1.55 0.77 4.02 10.26

50 Days MA 10.65 13.95 1.7898 0.67 3.65 9.93

200 Days MA 10.06 12.79 2.47 0.65 4.32075 12.73

Proshare Research


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DISCLAIMER/ADVICE TO READERS:While the website is checked for accuracy, we are not liable for any incorrect information included. The detailsof this publication should not be construed as an investment advice by the author/analyst or thepublishers/Proshare. Proshare Limited, its employees and analysts accept no liability for any loss arising fromthe use of this information. All opinions on this page/site constitute the authors best estimate judgement as ofthis date and are subject to change without notice. Investors should see the content of this page as one of the

factors to consider in making their investment decision. We recommend that you make enquiries based on yourown circumstances and, if necessary, take professional advice before entering into transactions. Furtherenquiries should be directed to the authors [email protected] .

Tags: Sentiment Analysis, Market Sentiments, Due Diligence, Technical Analysis, Bollinger band, Fibonacci,Candlestick, Money Flow Index, Proshare Research, The Analyst, Bullish Trend, Bearish Trend, Weak Bargain,Profit Taking, Short-termists, Price Correction, Trend Reversals, Volume Trend, Price Performance, FinancialServices, proshareng.com, Nigerian Stock Exchange, Equities Market, NCM, Investors, Shareholders, StockRecommendations, First Bank of Nigeria, Zenith bank Plc, May Baker Plc, Transcorp, Union Bank of Nigeria,Ashaka Cement

market sentiment analysis report for we 090612 - proshare

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