sentiment 16th march 2012

8/2/2019 Sentiment 16th March 2012

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Sentiment Analysis Report – W/E March 16, 2012

March 18 , 201 2

Manage your risks or they w ill destroy you- W . B. Busin

Sentiments in capital market is a powerful determinant of stock prices. And price is

technically regarded as the summation of sentiments of all marekt participants.

This report is basically to guide you appropriately by revealing market sentiments as

regards to trend and direction of individual stock, so you won’t be treading against

market sentiments.

To this regard, we have employed technical analysis indicators which are strictly

mathematical equations without human influence to analyse stock trends. The objective

is not to (de)market any stock/company but to technically show you, our esteemed

subscribers, the direction which market is trending and the sectors/stocks that are

(un)favoured by current market sentiments.

In the subsequent paragraphs, we shall be relating to you how market fared in the

previous week .i.e. the technical review and interpretation of general market sentiment.Meanwhile the market movers i.e. volume drivers and gainers for the week will be

technically reviewed to reveal most possible emerging trend/direction. Also, we include

due deligence table which contains basic financial ratios for you justify your reasoning.

Please note that the analysis is based on volume and price reaction during sessions and

it does not suggest any recommendation to buy or sell as Proshare Nigeria limited would

not be responsible for any investment decision you take.

Diagnosis ( for the week ended 16t h March 201 2)

Analysis of the market activity in the week ended March 16 th 2 0 1 2 technically

revealead low optimistim and high speculative propensity in the investors’ tradingpattern as against growing optimism and steady bargain trend observed in the previous

weekly performances.

In the week, bargain momentum declined significantly while market sentiment appeared

mixed, though the bears dominated the terrain as reflected in the negative breadth while

pessimism level gained more points.

Also, the indecisive posture of the market remained too high. This further shows that

large number of market participants are on sideline and appeared wary which could not

be isolated from the unstable trend in the market.

Nevertheless, the waning of profit taking tendency and speculative buying witnessed at

the close of the week suggests better prospect in the new week.

Ma rke t Diagnostic Score Card

Market Gauges Scores Remarks

ASI -0.60%The negative posture was significantly impacted byprofit taking in Large CAP and blue chip stocks.

Market Breadth NegativeThis confirms the pessimism in the week whichfurther reflects the dominance of the bears as

majority of market participants appeared indecisive



with weak bargain postures.

Market RSI 47.59

The market RSI shows that market is losing uptrend

momentum and appeared falling into depressed stateas bargain momentum declined significantly. Market

RSI closed weaker as against previous week of 59.18

I ndecis ion level (% ) 54.89%

Illiquidity of some stocks, low purchasing power and

risk appetite, feeble confidence and wary posture of investors reflected here significantly as this is

considered too high

Opt imism Level (% ) 13.53%

There is a significant decline in optimism level againstthe previous outlook of 30%.

Also, there is continued weakness in the tendency as

the optimistic activity on the bourse closed furtherlower at 24%, against total market activity, from 31%

recorded in the previous.

This is likely to improve as speculative buying isfinding its way back into market. The positive news of

more impressive earnings report in the comingperiods may increase the activity level

Pessimism Level ( % ) 31.58%

There is significant growth in pessimism in themarket- a worse posture over the previous outlook of

16.92%.

This shows that 31.58% of market participants in theweek were pessimistic about the market. Also, therewas significant increase on the pessimistic activity

level against total market activity. This is likely towane as optimistic activity in the market improves.

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Also, it was revealed that market sentiments during the week moved againt the large

CAP and blue chips in the Consum er Goods, Services, I ndustr ial Goods,

Conglomerates, Financial Serives, Agriculture, Oil & Gas and Healthcare sectors

in that order which further revealed the sectors which investors were patronising in the

week.

On the other hand, it was observed that market sentiments favoured the followingsectors Construction/ Real Estate and I CT in that order as bargain sentiments was

strong in the sectors.

Sectors Perform ance Direction & Trading Psychology

Construction/Real Estate 7 . 08%Active buying observed while marketsentiments favoured these sectors as

continued bargain observed with growing

optimism particularly towards JBERGER

and NCRICT 0 . 83%

Natural Resources 0.00%This sector sustained neutra l

posture

Consumer Goods -0.04%

Mild sell tendency observed in these

sectors as short termist booked profitwhile low bargain momentum succumbed

to profit booking pressure.

Services -0.54%

Industrial Goods -0.63%

Conglomerates -0.72%

Financial Services -1.50%

Heavy sel l tendency hit these sectorsconsiderably. Profit taking and low risk

appetite could be responsible for the highsell propensity.

Agriculture -2.20%

Oil & Gas -2.47%

Healthcare -3.82%

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Stock Trend & Dire ctionHere, we shall review stocks that have shapened market direction and performance in

the week, using technical tools like RSI, MACD, VOLUME, MFI , CANDLESTI CK, MOVI NG

AVERAGES, BOLLI GER BANDS and ACCUMULATION & DI STRI BUTI ON to reveal investors’

sentiments towards the market movers.

THE BI G VOLUME

UBA closed positive for the week by +1.5% gain- a better performance to -11.4% loss

recorded in the previous week. Though, still struggling to establish a support level at

N2.56 but the bearish pressure witnessed in the midweek weakened the support level

as stock experienced low of N2.47 in the week.

Subsequently, the stock maintained the support level as the stock closed higher at

N2.68 - this indicates emerging positive sentiments towards the stock after mid-week

sell pressure witnessed in the market generally as suggested by candlestick pattern

The Moving Averages closed neutral and bearish in short and long term respectively

while MACD closed bearish below signal line.

The volume movement at the close of the week revealed that more of accumulation was

done in the week while the volatility appeared waned.

Technical Conclusion on sentiments: There is tendency for sustainable positive trend

as the stock maintained support levels at N2.56 while the sentiments likely to remain

positive, considering accumulation posture.

Though, the moving averages and MACD suggest mixed outlook in short term while the

slight reduction of Bollinger band reveals waning of volatility in the near term. The chart

below shows MACD, candlestick, RSI and volume .



STERLI NG BANK closed with 13.8% gain in the week as against 9.0% gain

recorded last week- a better and improved bargain sentiment as the stock experienced a

bullish trading pattern in the week.

This candlestick pattern reveals a strong buying drive and positive sentiments towards

the stock. The moving averages revealed bullish trend in short term but stayed neutral

in long term. Also MACD closed bullish.

However, the continuity of the bullish trend is in question, as the stock is currently at

overbought region; the price hits the upper Bollinger band. This means the stock is

technically at its top as buttressed by RSI which further means the trend can reverse

any moment for now, though the bargain drive likely to defy this, looking at thecandlestick pattern and volume trend.

Also, the money flow index closed northward and similar trend observed in volume trend

as most transactions were accumulation while this also confirms the strong positive

sentiments.

Technical conclusion on the sentiments: The sentiment towards the stock is positive

and bullish in short term. The candlestick pattern revealed strong buying sentiments in

the week.

On the other hand, the stock is at its top as revealed by momentum indicator (RSI) and

its price position at the tip of upper Bollinger band confirms the overbought region. But

the stock likely to maintain uptrend in next few sessions as buying momentum closed

stronger and firmed. The chart below show s MACD, candlestick, RSI a nd volume.



THE GAI NERS

JBERGER experienced a bullish week to close with 27.3% gain against 15.7% gain

recorded last trading week. The bargain drive remained strong as stock maintained

maximum opening position and closed with same position throughout the week- This

indicates strong positive sentiments and strong bullish run. This buttressed by MACD.

However, the RSI revealed the stock to be in overbought region buttressed by price

above the upper Bollinger band. Meanwhile, the moving averages closed bearish in both

short and long term as the price closed below its short and long term moving averages-

this means price movement momentum is technically weak.

The volume trend revealed that more of accumulation was done in the week, though the

volume trade was significantly low- this shows that majority of investors maintained hold

position.

Technical conclusion on sentiments: There is strong positive sentiment towards the

stock and this is likely to be sustained as most investors maintained hold positions on

the stock.



The uptrend is not in doubt. Though, the stock appeared due for correction and it might

retrace anytime soon, considering the overbought region as revealed by RSI and

Bollinger band while the uptrend movement appeared technically weak as suggested by

moving averages which closed bearish in short and long term. The chart below shows MACD,

candlestick, RSI a nd volume.

DANGFLOUR experienced positive sentiments and impressive rally in the week to

close with 11.4% against 6.0% gain recorded in the previous week. However, the stock

retraced as the stock failed to break its 6weeks resistance at N4.90. Though, the

MACD still closed bullish buttressed by volume movement trend which closed positive

and above its 15days moving average as more of accumulation was done in the week

However, the sentiments appeared mixed as the stock hit the upper Bollinger band while

the moving average revealed a bearish trend in long term.

Technical conclusion on sentiments: the emerging sentiments appeared bearish asthe stock failed to break its 6weeks resistance at N4.90 and retraced accordingly after

hitting above upper Bollinger band. The chart below show s MACD, candlestick, RSI and volume.



THE LOSERS

UBN experienced continued bearish sentiment to close with -22.2% loss as against -

9.6% loss recorded in the previous week. The stock records new lows throughout the

week. The RSI revealed that the stock is depressed buttressed by continued distribution

witnessed in the week while money continued to flow out of the stock

The technical conclusion on sentiments: there is a strong bearish sentiment towards

the stock while majority of sentiments indicators revealed a depressed posture of the

stock. The chart below show s MACD, candlestick, RSI a nd volume.



MAYBAKER appeared depressed as revealed by RSI while MACD and the moving

averages suggest bearish trend in both short and long term.

Also, the stock records new lows throughout the week, recording maximum loss for each

session to close the week with -16.8% loss as against -9.1% loss recorded in the

previous week.

The stock experienced consistent distribution and continued cash outflow through the

week. The trend likely to continue for a while, all things being equal.

Technical conclusion on sentiments: The sentiment towards the stock is bearish and

likely to continue. The chart below show s MACD, candlestick, RSI and volume.



12 M o nt h ' s ( % ) -50.21% -70.68% -36.04% -70.77% 50.48% -58.23%

Price Momentum

15 Day s MA 1.07 2.75 24.21 3.80 6.09 2.55

30 Day s MA 0.98 2.33 23.87 3.95 7.16 2.66

50 Day s MA 0.96 2.31 27.09 4.29 8.09 2.65

200 Days MA 1.29 3.66 42.27 7.66 3.94 3.03

Proshare Research

Disclaimer: The information provided herein is our opinion only. Under no circumstances do any statements

here represent a recommendation to buy or sell your stocks or make any kind of an investment. You are

responsible for your own due diligence. To summarize, we do not provide recommendations nor do we make

any claims or promises that any information here will lead to a profit, loss or any other result. They are for

your guidance purpose only.

sentiment 16th march 2012

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