Traders Watch 33: Investdata Stock Pick For February 2017

Zenith Bank
The Nigerian banking sector remains one of the main drivers of the nation’s equity markets since the beginning of the year. The price action recently formed an ascending triangle chart pattern that supports reversal or continuation of trend. The increasing participation of offshore and local investors in the stock has sustained the mixed sentiments as trend ability remains strong above ADX 20.
Zenith Bank recently broke up above a downtrend resistance line and appears to be finding buying support around the N15.30 level. The shares could be in the process of breaking out from the new double tops and on that basis is worth buying for the medium to long term with a stop below the lows. On balance volume, it pushed up above the 2015 high at the end of 2016 and has continued to lead price action into positive into February
Feb2017 Stockpick- Zenith Bank
The weekly buy volume of the total transactions was 38%, while sell position was 62%. Also, Friday’s position for buy was 44% and 56% sell volume.
Fundamental factors: Market Capitalisation- N488.84 billion; Price Earnings Ratio- 4.88x; and Dividend Yield, 10.21%.
Meanwhile, gross income is projected to grow by 9.3% this year and another 10.4% next year; Earnings is estimated to increase 20% this year. There is Positive Analysts Sentiment for the stock.
Eterna Oil
The Oil and Gas is one of the major drivers of the equity market, especially since the November 30, 2016 deal by the Organisation of Petroleum Exporting Countries (OPEC) to cut output, as part of efforts to stabilized crude price at the international market. The deal had the support by both OPEC and Non-OPEC members including a major stakeholder like Russia.
Oil price recently reached new highs, but we have noticed that a few major oil marketing stocks are following the price of the underlying commodity.
Eterna recent broke up above a downtrend resistance line and appears to be rallying to selling resistance around the N5.20 level. The shares could be in the process of continuing its uptrend and on that basis is worth buying for the short to medium term.
Feb2017 Stockpick- Eterna Oil
The recent breakout of the symmetrical triangle chart pattern, also confirms continuation of trend as price action is still trading above its 50 and 100-Day moving average at N3.58.
Traders should watch out for the first resistance level at N3.90 and second resistance price of N4.20 or reverse down to first support level at N3.20 and second support at N2.85 respectively. The strength of the current trend and direction is strong on the weekly time frame as ADX is above 20.
Looking at the technical indicators, ETERNA closed above the upper band by 3.9%. Although prices have broken the upper band and an upside breakout is possible, the most likely scenario is for the current trading range that ETERNA is in to continue. MACD is bullish while RSI is reading 68.03. But momentum indicators are signaling sell except for MACD that is indicating buy, however watch it, as MFI on weekly time frame is looking up, indicating that funds are entering the stock.
The weekly buy volume of the total transactions was 71%, while sell position was 29%.
Fundamental factors: Market Capitalisation- N4.59 billion; Price Earnings Ratio 2.78x; and Dividend Yield, 6.98%.
Meanwhile, sales revenue is projected to grow by 21% this year and another 25% next year; Earnings is estimated to increase 18 % this year. There is Positive Sentiment for the stock.

Africa Prudential
AFRIPRUD is another equity that is trading with a well-defined range. A push higher towards N3.50 and above seems realistic, given how often this has worked out over time to touch the resistance level. On balance volume it is still pushing up at the same time. The price volume relationship predicts a power breakout that lifts above 300 once price work through this season that could trigger a final uptrend into March to hit N3.80 and above.
Feb2017 Stockpick- Afriprud
The strength of the current trend and direction is relatively strong on the weekly and daily time frame as ADX is at 19.90.
Looking at the technical indicators, Afriprud closed below the upper band by 16.6%. MACD is bullish while RSI is reading 59.79. Two momentum indicators SO and CCI are signaling sell while MACD and RSI are saying buy. MFI on weekly time frame is looking up, indicating that funds are entering the stock.
The weekly buy volume of the total transactions was 92%, while sell position was 8%.
Fundamental factors: Market Capitalisation- N7.10 billion; Price Earnings Ratio 7.68x; and Dividend Yield 13.82%.
Meanwhile, revenue is projected to grow by 10% this year and another 8% next year; Earnings is estimated to decline marginally at 12 % this year. There is a mixed Sentiment for the stock.

Presco
Presco has rallied despite the negative position of the benchmark index of the market in recent weeks. But it is at nowhere near the volatility of the wider market. The relative ratio is actually making new highs as the shares find strong support at around N40. We expect the price to follow the relative ratio and push to new highs over the medium term. On balance volume pushed above the 2016 high and has continued to lead price action into February 2017. The current price-to-volume relationship reveals a breakout of the resistance level in near term.
Feb2017 Stockpick- Presco
The price action has formed a rising channel and at the same time ascending triangle that supports continuation of trend. The stock trend and direction is strong on daily and weekly basis, trading above ADX of 20.
Looking at the technical indicators, PRESCO closed below the upper band by 26.3%. MACD is bearish while RSI is reading 62.03. Two momentum indicators: SO and CCI are signaling buy, while MACD and RSI are indicating sell. MFI on weekly time frame is looking down, indicating that funds are not entering the stock now.
The weekly buy volume of the total transactions was 0%, while sell position was 100%.

Fundamental factors: Market Capitalisation- N44.12 billion; Price/Earnings Ratio 6.49x; and Dividend Yield 2.27%.
Meanwhile, sale revenue is projected to grow by 20% this year and another 28% next year; Earnings is estimated at 35% this year. There is a positive analyst sentiment for the stock.

UCAP
United Capital has performed fantastically well against the overall market indicators since the beginning of the year. The shares are now breaking above a number of key resistance levels as buyers appear to be rekindling their interest in the stock. We expect a push towards the N4.50 level over the medium term.

UCFeb2017 Stockpick- UCapap
On balance volume (OBV) pushed above the 2015 and 2016 high at the end of the first month of 2017 and has continued to lead price action into February. It is highest and still carried more technical weight till last week. The strength of price to volume relationship predicts continuation of trend. The trend ability and direction momentum remained strong above ADX 20 at 45.94.
Looking at the technical indicators, UCap closed below the upper band by 8.1%. MACD is bearish since seven trading days and RSI is reading 73.42, which indicates overbought. All momentum indicators are signaling sell. MFI is looking up on a weekly and daily time frame. The weekly buy volume of the total transactions was 55%, sell position was 45%, while Friday’s position was 56% for buy and 44% sell.
Fundamental factors
Market Cap, N21.03 billion; P/E Ratio is 4.55x and Dividend Yield, 9.86%. Gross Income is expected to grow by 20% this year and another 18.2% next year, Earnings is estimated to increase 24% this year. There is Positive Analysts Sentiment for the stock.

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