• Gainers 24, Losers 17
• TA SIGNALS FOR FEBRUARY 22 2012

What an interesting  rally on the floor of the Nigerian Stock Exchange.

The bulls staged a gallant charge again against the strong 20,500 strong resistant garrison but was stopped short.

Yes there was a breakout up to 20,534 points but with huge casualties as the Bears in one swoop drove the Bulls 4 days back where they charged from closing at 20,313.35.

Today’s loss of 178.95 points has set a New year Low as the NSE ASI  now stands at a YTD of -2.01%.

I strongly believe this rally was technical in nature.

My report yesterday showed the Index approaching its 3rd resistant level in February and was waiting for a Breakout or Fakeout?

Yes, today’s rally was a FAKEOUT as the NSE ASI failed to break its downward slopping trend line, closing within its last Lows of February 16th 20,314 points.

A pip from my TA view, shows the NSE ASI is:

•  Within a Double Bottom formation
• A Descending Triangle

In descending triangles, there is a string of lower highs which forms the upper line. The lower line is a support level in which the price cannot seem to break.

In the chart above, you can see that the price is gradually making lower highs which tell us that the sellers are starting to gain some ground against the buyers.

Now most of the time, and we do say MOST, the price will eventually break the support line and continue to fall.

However, in some cases the support line will be too strong, and the price will bounce off of it and make a strong move up.

Tomorrow will test for strength, the table has turned.. The Bears are now in the Bulls territory and need to defend their Garrison.

A look at the NSE Banking sector shows this current trend is approaching resistant level and an impending pullback within these zone is expected.

Note that today’s rally was not profit taking but correction by Market heavy weights.

When stocks like UBA, GTASSURE,ETERNAOIL, STERLNBANK IKEJAHOTEL, SKYEBANK which has gained between 26-14% pulls back..

Then Profit Taking sets in..

For now the NSE ASI is below all moving averages bearish in short-term, and bearish in mid-long term

Advertisement

• Gainers 26, Losers 20
• TA SIGNALS FOR FEBRUARY 21 2012

The bulls staged a gallant charge against the strong 20,500 resistant garrison and was stopped short.

Yes we did see some intraday spikes above 20,500 in the early part of trading around 11.09am before sellers came in strong and took the index down to 20,448 points.

Afternoon session around 2.01 and 2.18 pm saw the Bulls fight back, hit a double top formation of 20,496 and 20,493 points before closing at 20,492, a gain of 46.97 points.

Technically, the NSE Index is within its 3rd slopping down channel line, which have acted as strong resistant levels in 3rd feb, 14th feb and now 21st february forming lower Lows and highs formation.

This is where it gets tricky,will there be a A Breakout or Fakeout?

If the bulls are able to stage a charge with a low volume, imagine what happens after the volume starts kicking in. The Sellers were present and able to stay strong today despite the bulls winning the day.

With index approaching its 3rd downward trend line, tomorrow’s trading will give a better picture.

NB: There are obviously bulls in the market but they are just not as shrewd as the profit takers.

Advertisement

The Market did an impressively positive day today in a quiet day without any major economic releases. Nothing much has changed since my post last week,

The NSE ASI continues to bounce around the 20,450 top points and finding the 20,500 points resistance zone had to break.

Early intraday scenario  witnessed Strong  bullish spikes up to 20,476 points but momentum continue to simmer towards close of trading.

Such a formation shouts one word, “Uncertainty”. The bulls and bears each won half of the day, eventually to close almost where it started in a tie….

Another concern here is This shows that the 20,500 points is a strong resistance level here wearing out the buying momentum.

My view from the ever all analysis is, The NSE ASI needs to Break 20,500 points first on huge volume and continue back to its last hit top drop of 20,658, then i will be convinced the Bull trend is in charge.

Overall, this is still a very mixed market with plenty of indications to support both a bullish and bearish outlook. Traders are advised to continue to be cautious at this point.

VOLUME PRICE ANALYSIS

Advertisement

• WEEKLY GAINERS & LOSERS FEB 17 ENDING 2012
• TA SIGNALS FOR FEBRUARY 17 2012

ON YOUR MARKS SET GO…..

This was the rally we witnessed on the floor of the Nigerian Stock Exchange today with no signs of Bears insight as market opened up strongly and continued powering upwards all the way to its close at 2.30pm.

Today’s rally is definitely a technical followup as the Bulls tested for strength rebounding the index up by 97.07 points to close at 20,411.17.  

One thing I have learnt, whenever the market move ahead upwards within an intermediate bear trend on a week where we experienced a huge fall on Wednesday by over 300 points(WARNING SIGN), it is most likely nothing more than a bull trap or a simple oversold rally.

Indeed, with the fading trading volume, compared to Thursdays higher volume it is not hard to see the true nature of this “rally”.

The NSE ASI would need to test and break its 20,500 points once again before it can resume its bull trend. For now, odds continue to favor a failure at that level as seen on our Intraday chart shows presence of Selling into strength as index hit 20,467 points level before closing at 20,411.17 points.

A pip at the NSE Banking Index which closed at 28.33 points(best performer this week up by 3.81%) Shows its within a resistant level of 3rd February highs of  283.45 points.

The sector has a nice Higher Lows and Highs Ascending channel pattern trending within13 to 15 points entry and exit signals

Two likely scenario could play out here:

1. Pullback within this level to form a Double Top formation (Reversal formation) or
2. Breakout on huge volume and test it upper trend lines of 287 points level.

All in all the Bulls lost this week by 1.03% and from today’s market rebound we might see some profit taking by monday/Tuesday.

For now the NSE ASI has closed below its Short time moving average. Short time moving average is currently above mid-time, AND above long time moving averages.

The relationship between price and moving averages is: neutral in short-term, and bullish in mid-long term.

HAVE A NICE WEEKEND

Advertisement

The market today closed 20314.08 as at lost a marginal 15.54 points.

Intraday analysis showed early morning marginal gains before sellers trooped in sent the NSEASI into a New Low of 20,250 points but buyers returned taking the index back within its opening range.

Today’s trading range from a technical view is called a Dragon fly candle stick pattern

So, what’s a dragon Fly formation?

Well, its my way of calling long hammer candlesticks formed at the end of a significant and strong downtrend which comes with strong volume, like what we saw in the market today. Such a formation usually spells the end or consolidation of a short term or intermediate term and deciding the next level to go.

A break upwards could spell a visit to the 20,400- 20,500 points resistance level but a break downwards as earlier said would confirm and see new lows within the next 2 weeks.

At this levels it will test for strength and perhaps make a new leg down on this intermediate bear trend.

TA SIGNALS FOR FEBRUARY 16, 2012

Advertisement

What looked like a continuation bull ride of yesterdays rally quickly turned into a Massacre as the NSE ASI lost a HUGE 337.38 points to close at 20,329.62 points.

Todays loss is the highest point the market has witnessed this year, not even when Nigerians were on the streets protesting for government to revert prices of fuel during Fuel subsidy or the tension on the outcome of MPC meeting if there will be change in rates or even the most devastating KANO Bombing by BOKO HARAM.

What happened today?

First, Market heavy were at the Top Losers led by Dangote Cement. I have always tagged this stock as the foundation of the overall NSE ASI, A crack on any foundation leads  to huge casualties, and that was what happened today. Dangcem lost a total of N5.80 to close at N110.20.

If we are to analyse where the next support level DANGCEM will hit will be N105.00 levels, then we should expect more downward rallies if not curtailed…

However, lets not forget that the stock market is a discounting mechanism for future valuation and not a feedback mechanism for current valuations. As such, trying to line day to day economic numbers with what exactly is happening in the stock market typical ends in confusion for most people.

So far, this avalanche has broken many technical short term bottoming indications such as the “Hammer formation” Support levels, the 100MA, turning the intermediate trend to bearish.

However, just when I was about to be convinced that this bear trend has legs, today’s blow off day caught my attention again. It was a weak volume surge with a strong big down candle. Such huge blow off days occurring at the end of significant down trends usually suggest that the last of the sellers had lept into the market,

what is known as a “Last Gasp Selling” and that prices may be attractive enough for people to start buying into. We saw the same thing back in 2009 near the bottom of the big bear trend. However, even if it does rebound from this level, it could still amount to a bull trap unless it test and breakout of the 100MA at about 20,400. For now, it is still a volatile events driven market that can move dramatically in either direction depending how economic issues work out.

If I am to judge the NSE ASI chart rally as a technical analyst based on KEN. W. CHOW principles:

1. The current retracement from 20,583 to 20,667 is about 38.2% and with this current pullback down to 20,329 calls for Caution.
2. The Pullback from 20,877 to 20,583 is about 294 points
3. The difference between the current Pullback from 20,667 to today’s close of 20,329.6 is 331.40
4. Overall support levels will be within 20,280 points and some intraday rebound within the 20,500 to 20,481 points before the final copulation to 20,000 points

For now we need to monitor where the next rebound occurs if this is the Final Leg down before the New Bullish trend kicks in.

TA SIGNALS FOR FEBRUARY 15 2012

A VIDEO U MUST WATCH

The video is by a renowned Technical analyst KEN. W. CHOW.called Super Structure Trading,  that can improve your trading results.

For those interested in the Video send an email to abdulrasheedm@trw-stockbrokers.com or from my Blog comments

Advertisement

The market made a critical rebound closing upwards by 83.39 points. Today’s close of 20,667 points showed the Bulls in one sweep wiped out 3 days of Bear rally. It thus show the NSE ASI has feelings as this important rebound occurred on Valentines Day.

Looking at the NSE ASI Daily chart, we can see that it occurred within two support levels of 28th December and 24th January support levels of 20600 points forming a hammer candlestick, and also closed above its 5 days moving Average.

The next level to watch will be the 50 Days moving average of 20,777 points levels and 14 days RSI 50 levels.

Apart from NSE ASI rebounding above its 5DMA what stocks are likely going to continue this Bullish trend?

I will be analysing FIRSTBANK and GTB

Firstbank  rebounded today on huge volume closing at N10.50,  and approaching its last resistant line of N10.62.

A critical resistant line to watch which might translate to

1. A pullback below N10.62
2. Breakout forming a New High to N10.82 to N11.55 levels?

GUARANTY

Hit a YTD high of N11.99 and pulled back to N13.50 huge correction and Good entry levels for those who Sold high or Who missed the Bus.

I cant really predict the next line of pricing But a look at GTB trend behavior shows an average of 2 to 3 days bullish rallies before profit taking sets in.

2 areas to watch will be N14.46-N14.65 

All in all, this NSE ASI looks like the kind of classic short term pullback and rebound that we saw back in December 2011 and January 2012.

See you guys tomorrow off to see my VALENTINE….

Advertisement

My report remains short as I await a significant change in overall market scenario.

The Index declined by 40.02 points today recording 5 days of continued downtrend closing at 20,583.61

Even though today’s drop was somewhat discouraging and points towards weakening sentiments in the market, it really traded within friday’s trading range which makes today more of a sideways day rather than a negative one.

Though NSE has set a new 14-day low, the RSI has not shows Bulls remain intact.

It would be more prudent to wait one more day for a clear signal.

TA SIGNALS FOR FEBRUARY 13 2012

Advertisement

As at close of market on Friday, the NSE ASI lost a total of 254.01 points to close at 20,623.63.

• gainers 14 losers 30
• Weekly Gainers 19 ,Weekly Losers 42

The market had 4 days of trade because of Muslim holidays on Monday(birth of Prophet Mohammed).

For the week there were no signs of Bulls on the NSE ASI,NSE30,NSE Banking and NSE Insurance as overall market was in a selling spree. Though Fridays trading looked promising as the NSE ASI closed down marginally by 7.75 points or 0.04%, it shows investors are confident buying within these levels.

Yes the above level seems to be holding for now as intraday trading did see both the bulls and bears  in a tie in a spectacular day of wide intraday range mostly Bullish before the stocks of MRS (Chevron) Okomuoil & Jberber brought down the index towards end of trading.
From a technical point of view,The NSE ASI close on friday was sideways in a huge doji on falling volume. This shows that the bulls and bears are still locked in battle. How the next day opens following such a signal would usually tell which side won the battle and the direction which the day will close. So, how Monday would close would very much depend on how it opens. If it opens higher, it will likely trade and close higher targeting 20,700-20,800 points range. If it opens lower, it will likely trade within this current level or hit the 20,400 points in the Long run.

Have a nice weekend..

TA SIGNALS FOR FEBRUARY 10 2012

WEEKLY GAINERS & LOSERS FEB 10TH

What is a “DOJI”. Scroll down

Definition:

If a security has virtually equal opening and closing prices, this leads to a Doji. The length of the upper and lower shadows of a Doji can vary and consequently the resulting candlestick may look like a cross, inverted cross or a plus sign. Doji, taken alone, is a neutral pattern.

Recognition Criteria:

1. The real body is either a horizontal line or it is significantly small (its length is not more than a few ticks).
2. The upper and lower shadows vary in length.

Explanation:

The open and close should be equal in an ideal Doji. However the real life is unfortunately not that simple. A Doji with an equal open and close may be considered more robust but it is also rare in the real life. Hence it is more important to capture and understand the essence of this important candlestick. Doji is a particular signal showing indecision about the direction of the market and it represents a tug of war between buyers and sellers. Doji simply shows that prices has moved above and below the opening price during the day, but then the security closed either exactly at or very near the opening price. The overall result is a standoff. It shows that neither the bulls nor the bears were able to gain control during the day and it is possible that a turning point can develop soon.

Important Factors:

Doji is an important candlestick. It provides information on its own. It also features in other formations as an important element.

Doji is relatively easy to spot. It has a very small body with the appearance of a thin horizontal line. The very small body relative to other candlesticks is its distinguishing characteristic.

Doji needs to be interpreted in terms of a preceding trend or preceding candlesticks. The appearance of a Doji after an advance or a long white candlestick signals the fact that the buying pressure is getting weaker. The appearance of a Doji after a decline or a long black candlestick signals the fact that the selling pressure is diminishing. Essentially Doji gives the message that the forces of supply and demand are becoming more evenly matched and consequently a change in trend may be near. However Doji alone is not enough to identify a reversal and further confirmation by following signals may be warranted.

The importance of Doji as a signal is somewhat relative and depends on the characteristics of the market. It is actually important only in markets where you do not see many Doji. If there are many Doji on a particular chart, the appearance of a new Doji in that particular market is not very meaningful and its signal value is negligible.

Advertisement

• Gainers 16,Losers 27
• Highest volume on offer “UBA with about 250 million shares”.

So, odds definitely favor the upside from now on and I would certainly be looking out for entry points to downside.

Watch out for Video coverage on Stocks to watch soon

TA SIGNALS FOR FEBRUARY 09 2012

Advertisement