Sunday, Jan 04, 2015/ Proshare Research

The Diagnosis

Analysis of the market activity in the week ended December 31, 2014 technically revealed waning bargain optimism as speculative tendency gained tempo while short term traders engaged in active profit-taking. The outlook came in line with our position as envisaged in our previous report.

Also, an extensive analysis revealed a reasonable growth in distribution level, paticularly towards the active stocks across board in the week. In addition, it was observed that both Big, small and Medium capped stocks were actively patronised.

In similar vein, volume analysis also revealed low patronage towards ETI and STERLNBANK while investors sustained sell-down postures towards FCMB, ZENITHBANK, GUARANTY, FBNH, UBA and TRANSCORP.

In addition, we observed sustained bargain appetite in Consumer Goods and Services sector(s) and renewed patronage in Healthcare sector . However, investors displayed fresh negative sentiments in Financial Services, Industrial Goods, Oil & Gas and Conglomerates sectors.

Summarily, the bulls rule the week, strenghtening the key benchmark indices by 228.33 points against +4,122.31 recorded in the previous week to close at 34,657.17 - ASI remains depressed and battered below its key resistance level at 41,957.50

In addition, the All Share Index traded within the range of 34,684.32 (week-high) and 34,657.17, (week-low) to settle at 34,657.17, above previous weeks high ( 34,428.82 ) by +228.33 — This indicates waning bargain tendency when compared with previous posture. The outlook reveals weak bargain optimism.

In the week just ended, market breadth closed positive at 0.96x against 4.33x recorded in the previous week on the back of low bargain optimism.

Likely trends in the coming periods . We expect moderate january effect to kick-in gradually while speculative tendency may dictate pace. Nonetheless, we expect moderate patronage towards low-priced blue chip stocks.

Technically, market sentiments during the week favoured liquid and active stocks of Medium Cap categories in the sector(s) but with stronger positive sentiments Healthcare, Services and Consumer Goods which further revealed the sector(s) investors patronised in the week.

On the other hand, it was observed that negative sentiments appeared stronger in Financial Services, Industrial Goods, Construction/Real Estate, Oil & Gas and Conglomerates sector(s)

Stock Trend & Direction

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

THE BIG VOLUME

ROYALEX experienced a sustained low bargain postures to close with negative sentiments in the week. The stock recorded -2.00% loss in the week against -1.90% loss position recorded in the previous week.

The outlook in the week revealed a prolonged sell tendency towards the stock while the stock shed -10.71% in the last 3weeks to close at N0.50, following the active sell down experienced between since the beginning of the year 2014.

In addition, technical indicator (MACD) revealed growing sell sentiments towards the stock while it closed neutral in both short term and mid-long term periods as revealed by its price moving averages- this however indicates growing presence of the bears towards the stock during the week.

However, we observed a significant surge in bearish volume during the week while the stock closed battered at its nominal value.

Technical conclusion on sentiments. The stock has moderate chance, with low reliability to retrace the downtrend in the coming session. A cautious Signal! Chart below shows MACD, candlestick, RSI and volume analysis

THE GAINERS

VONO experienced renewed bargain tendency to close with positive sentiments in the week. The stock recorded +24.40% gain in the week against (0.00%) flat position recorded in the previous week.

The outlook in the week suggests improved bargain optimism towards the stock, following prolonged sell-down experienced since the opening of the year 2014.

Technical indicator (MACD) revealed growing bargain tendency towards the stock while the stock remained bearish in both short term and mid-long term periods as revealed by price moving averages, indicating the stock is still within the ambit of the bears.

Technical conclusion on sentiments. The stock has moderate chance, with moderate reliability, to extend uptrend in the coming sessions, considering the active bargain postures observed during the last trading session for the week. A Cautious Signal! Chart below shows MACD, candlestick, RSI and volume analysis

THE LOSERS

OANDO experienced sustained sell tendency to close with negative sentiments in the week. The stock recorded -19.30% loss in the week against +26.80% gain position recorded in the previous week.

The outlook in the week revealed growing sell activities towards the stock in the last 28weeks to record -46.95 loss.

Technical indicator (MACD) revealed growing negative sentiments with a corresponding sharp decline in price momentum in the week. Also, the stock closed bearish in both short term and mid-long term periods -This indicates growing presence of the bears towards the stock.

Technical conclusion on sentiments. The stock has moderate chance, with low reliability, to extend the downtrend in the coming sessions, considering the active sell pressure observed in the last trading session. — A Cautious Signal! Chart below shows MACD, candlestick, RSI and volume Analysis

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