Traders Watch 32
Trading on the floor of the Nigeria Stock Exchange closed the week higher as all market indices were green, except for the NSE Premium index that was red.
The Monetary Policy Committee (MPC) decision last week to retain its monetary policy stance did not influence the market negatively as was expected by market players and analysts. Instead, it triggered flow of funds to sources of higher returns, while keeping an eye on safety in the process of creating wealth for investors. This is especially key as timing at this point in the financial market becomes very important, especially with the quarterly reports being released to kick off the earnings season.
NSEASI WEEKLY TIME FRAME
The benchmark index on a weekly time frame is still ranging sideways to a breakout of the bearish channel that is imminent to support an uptrend as buying momentum increases, despite the seeming profit taking and indecision among traders and investors during the week.
The index action has remained in its strong support level at 26,325.93 regardless of the oscillatory mood of the market since the beginning of the year. The possibility of market reversal around 61% Fibonacci retracement level is high as the index closed 0.40% higher for the period. End of the month rally is likely as market players balance their trading account. The trending ability of the market on weekly frame is still weak, as ADX is below 20 for the period at 15.29.
Traders should watch out for a breakout as end of the month trading continues and the earnings season draws closer. The first resistant level is at 26,432.68 and the second resistant at 26,626.52 point, any move down to 26,223.54 and 25,982.98 respectively.
Looking at technical indicators, the NSEASI closed above the lower band by 37.1%, while MACD has been bearish. RSI is reading 45.41 and relatively strong. Money flow index on a weekly and daily basis is up, indicating that funds are entering the market. All the momentum indicators are signaling buy, except SO that say sell.
Unity Bank
Unity Bank moved 15.63% higher over the past week on a positive sentiment after trending down for almost two years with various attempts to rebound, but reversed in the last two weeks after two months of side trending is trying to form a double bottom in a descending triangle chart pattern. The move is relatively strong on a weekly and daily time frame as ADX is at 19.78. Traders should watch for a break out to first resistance level of N0.83 and second resistance level of N0.91 or reverse down to touch first support level at N0.64 and the second support level will be at N0.58 per share. The stock is trading above its 20-Day moving average at N0.74 per share.
Looking at the technical indicators, Unity Bank closed below the upper band by 10.7%. MACD is bullish, while RSI is reading 54.97. MACD, SO and CC1 indicators have signaled BUY in more a week ago, while RSI is signaling sell as all the indicators are at their overbought region. MFI is looking up to indicate that funds are entering the stock. The Buy-To-Sell volume indicator reveals 100% buy volume on the week and daily while sell position 0%.
Analyst Opinion
New short term buying position should wait for a pullback before jumping in as profit taking is imminent.
Oando
Oando rose 12.47% over the past week on a bullish sentiment and positive outlook of upstream oil companies that are listed among those that won the bids announced recently by the Nigerian National Petroleum Corporation (NNPC) to export crude oil. Its price action on a weekly time frame has broken out the symmetrical triangle chart pattern after side trending to support continuation of trend. The trend momentum and direction is still weak as ADX on weekly and daily time frame is below 20.
Traders should watch out for a breakout at the first resistance price level of N5.45 and second resistance level of N6.00, any move down to the first support level of N4.74 and second support level at N4.20. The stock is trading above its 20-day moving average.
Looking at technical indicators, Oando closed below the upper band by 31.1%. MACD has been bullish for four trading days. RSI is reading 52.59, while the momentum indicators like MACD, SO, CCI and RSI are signaling buy and the same time some of the indicators are reading overbought. MFI is looking up, to indicate that funds are entering the stock, with buying volume position of 94% and sell position of 6% for the week. But as at Friday the buying volume was 78% and selling position, 22%.
Analyst Opinion
Any positioning now should be for the medium and long-term as profit taking by investors to buy dividend stocks would pullback the price.
Honeywell Flour
Honeywell moved by 11.29% lower over the past week on a mixed sentiment, owing to its low price attraction and dwindling earnings amidst cautious trading, judging by the recent pullback ahead of its expected mixed financials due to the nature of its products and falling purchasing power of consumers.
Traders should watch for first support level of N1.06 and second support level of N0.96 or reverse up to touch first resistance level at N1.16 and the second resistance level will be at N1.22 per share. The stock is trading below its 20-Day moving average at N1.10 per share. The current trend is weak on weekly and daily time frame as ADX is below 20.
Looking at the technical indicators, HONYFLOUR closed above the lower band by 22.5%. MACD is still bullish, RSI is reading 41.44 which is relatively entering oversold region. All the momentum indicators are signaling buy except for SO indicating sell. MFI is indicating that funds are exiting the stock. The Buy-To-Sell volume indicator reveals 8% buy position and sell volume of 92% for the week, while on daily time frame it is indicating 100% buy volume of the stock as at Friday trading.
Analyst Opinion
Any positioning at this time should wait for the price to hit N0.96 since the pullback is ongoing.
Forte Oil
FO moved 10.14% higher over the past week on a mixed sentiment as it has formed a double bottom that supports reversal in the short time, looking at the current candlestick formation. The trend momentum and direction is strong on weekly and daily time frame as ADX is above 20 at 39.14 and 28.97 respectively.
Traders should watch out for a reversal of trend at the first resistance price level of N81.23 and second resistance level of N104, any move down to the first support level of N66 and second support level at N62. The stock is trading below its 20 and 50-day moving average.
Looking at technical indicators, FO closed above the lower band by 23.2%. MACD is bullish as it cross above the signal line. RSI is reading 32.46, while all momentum indicators like MACD, SO, CCI and RSI are signaling buy as they are at their oversold region. MFI is looking up, to indicate that funds are flowing into the stock, with sell volume position of 25% and buy position of 75% for the week while daily buy and sell volume indicator revealed 100% sell as at Friday trading.
Analyst Opinion
Good for short to long term positioning as the stock retracement is imminent
Ucap
Ucap moved 2.99% higher over the past week on a bullish sentiment as market players position for dividend income on improving financials in a tight business environment to form cup and handle in a bullish channel that support the current uptrend.
The current trend momentum and direction on a weekly and daily time frame are above ADX 20 at 43.98 and 53.07 respectively.
Traders should watch as pullback is imminent within the rising channel to the current strong support level at N3.30 and second support price of N3.16. Watch for any move to breakout the first resistance level of N3.50 and a new high of N3.70. The stock is trading above it 100 and 200-Day moving average.
Looking at technical indicators, UCAP closed above the upper band by 6.4%. Although prices have broken the upper band and an upside breakout is possible, the most likely scenario is for the current trading range that UCAP is in to continue. MACD is bullish while RSI is reading 76.96 on overbought region. All the momentum indicators like SO, RSI and CCO are in their overbought range and signaling sell, while MACD signaled buy, MFI is looking up on weekly timeframe and down on daily. The buy to sell volume index revealed a weekly ‘buy’ position of 79% and sell position of 21%, while on daily time frame is 100% sell volume with 0% buy position as at Friday.
Analyst Opinion
Profit booking is underway, new positioning should wait for pullback before jumping in or in the alternative, buy in stages.
