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8/2/2019 Sentiment 16th March 2012
http://slidepdf.com/reader/full/sentiment-16th-march-2012 1/10
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
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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.
Proshare Research
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%
Proshare Research
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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 .
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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.
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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.
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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.
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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.
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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.
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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.