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Sentiment Analysis Report for WE 010612 - Market Slips Into Reversal Mode

Sentiment Analysis Report for WE 010612 - Market Slips Into Reversal Mode

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Published by proshareng
Further analysis would indicate that the market has slipped into a reversal mode technically as the market consecutively recorded losses over a 4-week period, plunging below its 22,000 pyschological line on the back of an unrellenting sell tendency amid increased volatility.

To date, the indecisive posture of the market remains high, alongside growing activity level as sideline attendants appeared to take positions subtly, yet remain a significant feature.

Prescription and the likely expectation in the coming periods: The depressed and oversold postures of value and liquid stocks accross the board remain the most likely game changers for the market in the coming period(s); due in the main, to their attractiveness while the market RSI appears deppressed as well.

The point must be made that while the cycle of negativity has declined, the absence of positifve news in and to the market to drive impressive bargains would continue to give support to speculative and pessimistic activities in the coming periods - a pointer to further market price volatility in the coming period.
Further analysis would indicate that the market has slipped into a reversal mode technically as the market consecutively recorded losses over a 4-week period, plunging below its 22,000 pyschological line on the back of an unrellenting sell tendency amid increased volatility.

To date, the indecisive posture of the market remains high, alongside growing activity level as sideline attendants appeared to take positions subtly, yet remain a significant feature.

Prescription and the likely expectation in the coming periods: The depressed and oversold postures of value and liquid stocks accross the board remain the most likely game changers for the market in the coming period(s); due in the main, to their attractiveness while the market RSI appears deppressed as well.

The point must be made that while the cycle of negativity has declined, the absence of positifve news in and to the market to drive impressive bargains would continue to give support to speculative and pessimistic activities in the coming periods - a pointer to further market price volatility in the coming period.

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Published by: proshareng on Jun 02, 2012
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Market Sentiment Analysis for WE 010612
www.proshareng.com 
1
Sentiment Analysis Report: W/E 010612 – Market Slips into Reversal Mode
Saturday, June 02, 2012/ Proshare Research
The Diagnosis
Analysis of market activity in the week ended
June 01, 2012
technically revealed thesustained
weak market optimism and continued sell tendency 
in the investors’ tradingpattern as against the
moderate profit-taking tendency amid falling market optimism
observed in the previous week’s performance.Further analysis would indicate that the market has
slipped into a reversal modetechnically
as the market consecutively recorded losses over a 4-week period, plunging
 below its 22,000 pyschological
line on the back of an unrellenting sell tendency amidincreased volatility.In the week just ended,
 sustained weak bargain
 
tendency 
was observed across themajor sectors as
 price correction gained tempo
, mainly towards
big and medium CAP stocks due to their recent overbought postures
. However,
fresh and renewed bargaindrive
 
was observed towards bottomed-out stocks
 
in few active sectors while theirdepressed postures remained attractive.Nevertheless, the
sustained sell tendency continued to
outweigh the weak buy side asmost
active and liquid stocks are still experiencing price correction
while the
short termist 
remained in control of market direction - a major reason for the continued
 pessimistic activities
in the market.To date, the indecisive posture of the market remains high, alongside
growing
 
activity level 
as sideline attendants appeared to take positions subtly, yet remain a significantfeature.
Prescription and the likely expectation in the coming periods
: The depressed andoversold postures of value and liquid stocks accross the board remain the most likelygame changers for the market in the coming period(s); due in the main, to theirattractiveness while the market RSI appears deppressed as well.The point must be made that while the cycle of negativity has declined, the absence of positifve news in and to the market to drive impressive bargains would continue to givesupport to speculative and pessimistic activities in the coming periods - a pointer tofurther market price volatility in the coming period.
 
Market Diagnostic Score Card
Market Gauge Scores Remarks
ASI
-1.21%
The negative posture was significantly impacted byactivities
towards big and medium cap stocks
acrossthe sectors.
Weak bargain and continued selltendency
was observed when compared to
-0.66%loss
recorded in the previous week.Market Breadth NegativeThis confirms the
increase in pessimism
and
continued price correction
witnessed in the weekwhich further reflects the
weak bargain
 Market RSI42.88(
weak
)The market RSI shows that market is
 gainingreversal 
 
momentum
 
while it may move into
weak 
 posture
. Market RSI closed lower as against previousweek of 5
2.99.
More importantly, this indicates further that market has slipped into a REVERSAL mode. The trend may  persist due to lack of positive news to driver bargains
.
Indecision level (%) 60.29%
Illiquidity of some stocks, low purchasing power, lowrisk appetite, feeble confidence and wary posture of investors reflected here significantly- This isconsidered too high- an
improved posture
against
63.97%
observed in the previous week.
 
Market Sentiment Analysis for WE 010612
www.proshareng.com 
2
Optimism Level (%) 16.91%
There is an increase in the optimism level of themarket against the previous outlook of 
10.29%.
 However, there was
weak bargain tendency 
as the
optimistic activity
on the bourse closed
lower 
at
31.74%,
against total market activity, from
35.82%
 recorded in the previous week.
Pessimism Level (%) 22.79%
There is
slight decline
in pessimism level in themarket - an improved
posture
over the previousoutlook of 
53.74%.
This shows that 22.79% of market 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, Industrial Goods and Oil & Gas
sector(s) in that order –
reflecting the sectors investors patronised in the week
.On the other hand, it was observed that market sentiments
moved against 
the
Conglomerates, Services, ICT, Financial Services, Construction/Real Estate andAgriculture
sector(s)
 
as
sell sentiment 
was stronger in the sector(s).
Sector Performance Sector Movers Direction & Trading PsychologyHealthcare4.85%NEIMETH, GLAXOSMITH,FIDSON, MAYBAKER Industrial Goods0.64%ASHAKACEM, BAGCO,BERGER, CCNNOil & Gas0.36%JAPAULOILRenewed bargain sentiments
 observed in the sector(s) due todepressed and attractive prices thatfollowed the heavy sell tendencyobserved in the previous week
Natural Resources0.00%Indecisive (No active transactions)Consumer Goods0.00%CADBURY, DANGFLOUR,UNILEVER, PZ,HONYFLOUR, INTBREW
Sell pressure halts as bargain drivegained tempo in the sector(s)
Conglomerates-0.52%UACN, AGLEVENTServices-0.73%REDSTAREX, RTBRISCOE,LONGMAN, IKEJAHOTELMild sell tendency
observed in thesector(s)- Speculative trading patterndictates the direction as profit takingtendency sets in
ICT-0.82%NCR Active sell tendency
observed in thesector(s) after prolonged flat positions
Financial Services-0.87%FCMB, ZENITHBANK,SKYEBANK, FIDELITYBK,GTASSURE, WAPIC,STERLNBANK,CONTINSURE, GTBANK,CUSTODYINS, UBAContinued and Growing selltendency
observed in the sector(s) asprofiteering dominates
Construction/RealEstate-1.53%UAC-PROP, JBERGER Heavy sell tendency
observed in thesector(s)- Speculative trading patterndictates the direction as profit takingtendency sets in
Agriculture-2.10%LIVESTOCK, OKOMUOILContinued and Growing selltendency
observed in the sector(s) asprofiteering dominates
Proshare Research
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 & DISTRIBUTION 
 to reveal investors’ sentiments towards the market movers.
 
Market Sentiment Analysis for WE 010612
www.proshareng.com 
3
THE BIG VOLUME
TRANSCORP
experienced continued bargain tendency and sustained positive sentimentsin the week to record +
7.8% gain
as against +23.3% gain recorded in the previousweek - the stock appears to be losing uptrend momentum amid weak performance evenas the stock
recorded 73.21% gain in the last five weeks
.The stock remained in bullish trend, trading above both its short and long term posturesas revealed by price moving average while the bullish posture of MACD confirms same.However, the candlestick pattern (Black Marubuso) revealed a strong sell tendency inthe last session as bargain drive appeared weak due to the overbought posture of thestock. To buttress this further, the sharp fall in price uptrend momentum as revealed byRSI confirms this; just as a similar trend was observed in money flow index (MFI) asdistribution dominated the trading pattern, buttressed by the huge bearish volumerecorded.
Technical Conclusion on Sentiments
: The stock may extend the downtrend further asshort-termist (profit-takers) would appear to be in control of the stock. The chance for ashort term price correction has increased due to the prolonged overbought posture of the stock.
 
The chart below shows MACD, candlestick, RSI and volume analysis.
GUARANTY
experienced continued mild sell tendency and low bearish sentiments as thestock maintained gradual downtrend in the week to record -
3.2% loss
as against -1.3%loss recorded in the previous week – a sustained weak bargain drive was observed as
the stock booked -10.86% loss in the last four weeks
while the outlook revealedsome price correction after the stock recorded a
13-month high of N17.25kobo
onMay 3rd 2012.Nevertheless, the stock remained bullish in long term while maintaining a neutralposture in short term period, indicating that the stock is yet to attain full bearish modeas revealed by its price moving average - further indicating that the stock is
likely tomaintain its old support level (N15.40).
 However, the last candlestick pattern (inverted hammer) gives a reversal signal,revealing the presence of bulls as the trend sets to retrace for possible short term rally.

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