Vitafoam Nigeria Plc is one of the country’s leading manufacturers of flexible, reconstituted and rigid foam products. Incorporated in 1962 and listed on the Nigerian Exchange, the company has evolved from a mattress and foam producer into a broader comfort, bedding, furniture and polyurethane solutions group with operations and subsidiaries spanning Nigeria and parts of West Africa
Current price: N141.50
Rating: Buy
Price projection: N225 and N275
Technical Analysis
In this report, we shall use the following tools and analysis methods:
Elliott’s wave theory to understand the overall market sentiment
Fibonacci tools to determine support and resistance levels
The Relative Strength Index and volume to evaluate the market’s strength
The Money Flow Index to determine the market liquidity
Moving average and MACD to understand the nature of the trend
Top-down analysis to know the best investment position
Elliott wave analysis
Weekly chart: Market overview
In line with Vitaform’s strong bearish sentiment, its liquidity and relative strength declined on the weekly chart. Also, MACD’s bearish momentum improved. This performance closed within the 0.5 Fibonacci level, suggesting a potential trend reversal. Investor could use this pullback to buy into value as the stock has potential for an upward momentum in the long run.
Daily chart: Investment opportunity
On the daily chart, the index experienced two consecutive strong bullish volume amid strong bearish market. In line with this performance, investors should watch for improved liquidity and momentum at N130 and N120. These levels should act as support levels for the stock with prices projected at N225 and N275 per share.
