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Market Sentiment Analysis Report for WE 090612 - Proshare

Market Sentiment Analysis Report for WE 090612 - Proshare

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Published by proshareng
The Union Bank of Nigeria stock has a moderate tendency to extend the downtrend in the coming sessions. However, a trend reversal is not in doubt as the stock tried to stabilize at N3.17kobo in the last two sessions while the contraction of Bollinger bands reveals the high possibility of a sharp price movement in near term.
The Union Bank of Nigeria stock has a moderate tendency to extend the downtrend in the coming sessions. However, a trend reversal is not in doubt as the stock tried to stabilize at N3.17kobo in the last two sessions while the contraction of Bollinger bands reveals the high possibility of a sharp price movement in near term.

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Published by: proshareng on Jun 10, 2012
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Market Sentiment Analysis for WE 080612
www.proshareng.com 
1
Sentiment Analysis Report – W/E June 08, 2012
 
Sunday, June 10, 2012/ Proshare Research
The Diagnosis
Analysis of the market activity in the week ended
June 08, 2012
technically revealeadan increase in pessimistic trading
and growing sell tendency 
in the investors’ tradingpattern as against
weak market optimism and continued sell tendency 
observed in theprevious week’s performance.Digging deeper, we discovered a strong
reversal mode
as the falling trend garnedmomemtum 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 bargain
 
tendency 
was observed across themajor sectors as
reversal mode continued to gain tempo
, mainly towards
big and medium CAP stocks
. However,
renewed and growing bargain drive
 
was observed towards 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 termist 
remained incontrol of market direction - a major reason for the continued
 pessimistic activities
in themarket.To date, the indecisive posture of the market remains high, alongside
waning
 
activity level 
as 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 wouldsuccessfully 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 marketparticipants 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% loss
recorded in the previous week.Market BreadthNegativeThis confirms the
increase in pessimism
and
continued 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 of 42
.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 of investors reflected here significantly- This isconsidered too high- an
improved posture
against
60.29%
observed in the previous week.
 
Market Sentiment Analysis for WE 080612
www.proshareng.com 
2
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 previousoutlook of 
22.79%.
This shows that 26.71% 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, 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 
the
Services, Consumer Goods, Financial Services, Construction/Real Estate andIndustrial Goods
sector(s)
 
as
sell sentiment 
was stronger in the sector(s).
Sector Performance Sector Movers Direction & Trading PsychologyHealthcare5.98%FIDSON, GLAXOSMITH,NEIMETH, MAYBAKER Growing and sustained active bargaintendency
observed in the sector(s),indicating attractive posture of stock(s)within the sector(s)
 Agriculture2.99%LIVESTOCKConglomerates1.92%TRANSCORPRenewed bargain sentiments
observedin the sector(s) due to depressed andattractive prices that followed the heavysell tendency observed in the previousweek
Oil & Gas0.45%ETERNAOIL, JAPAULOILGrowing and sustained active bargaintendency
observed in the sector(s),indicating attractive posture of stock(s)within the sector(s)
ICT0.00%Natural Resources0.00%Indecisive (No active transactions)Services-0.10%LONGMAN, IKEJAHOTEL,ACADEMY, REDSTAREXWaning sell tendency observed
in thesector(s)- as active bargain sentimentsobserved towards some attractive stockscushioned the sell pressure
Consumer Goods-0.31%DANGSUGAR, NB,UNILEVER, DANGFLOUR,CADBURYMild sell tendency resumed
in thesector(s)- Speculative trading patterndictates the direction amid weak bargainposture
Financial Services-1.19%UBN, GTASSURE, ACCESS,UNITYBNK, STERLNBANK,FIRSTBANK, FCMB, UBA,CONTINSURE, PRESTIGE,FIDELITY BANKConstruction/RealEstate-1.99%JBERGER, UAC-PROPContinued and Growing sell tendency
 observed in the sector(s) as profiteeringdominates
Industrial Goods-2.33%ASHAKACEM, DANGCEM,CCNN, CUTIX, DNMEYER,BAGCO, CAP, WAPCOHeavy sell tendency
observed in thesector(s)- Speculative trading patterndictates the direction as profit takingtendency sets in
Proshare Research
 
Market Sentiment Analysis for WE 080612
www.proshareng.com 
3
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.
THE BIG VOLUMEFirst 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 asdistribution 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 bearishposition 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 betterperformance 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 termrespectively as revealed by its price moving average – indicating that the stock is yet toattain bearish mode.

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