The stock market continued its steady ascent higher, closing up 172.25 points (0.46%) and a weekly gain of 0.35%

After loosing momentum on Monday and Tuesday, the markets rebounded showing a Hammer formation and continued to trend higher for the entire week, revealing very little weakness.

By Thursday, 3 of the indexes actually cleared some key Negative levels back to positive  while NSE Oil & Gas,FBT & Insurance remained in Red and may be signifying a big shift in the markets underlying sentiment.

In fact, by the end of the week, None of the Indexes had hit their last highs. While the strength in the markets has to be respected, traders should also realize that the sharp rally that began a few weeks ago has really only retraced about half of the decline.

The market will need to take a breather soon if it intends to make a serious push to its last highs as a great deal of stocks looks healthy and many are starting to present possible buying opportunities. Traders should continue to exercise caution, as the markets remain vulnerable to some profit taking.

The areas to watch next week will be from the index are:

• NSE ASI 21,072, a short fall of 113.34 points
• NSE 30 946.48, a shortfall of 10.37 points
• NSE BANKING 275.87, a shortfall of 4.88 points

WEEKLY GAINERS & LOSERS

TA SIGNALS FOR JANUARY 27 2012

While resistant levels to check are in your TA SIGNALS

Have a Nice Weekend

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The stock market had a mixed session on Thursday & Friday closing marginally in what Technicals call a DOJI.

The Doji is one of the most revealing signals in Candlestick trading. It clearly indicates that the bulls and the bears are at an equilibrium, a state of indecision. The Doji appearing at the end of an extended trend has significant implications. The trend may be ending.

Let’s take a look at some of them, and see what we may be able to expect in the coming days, depending on the market, of course.

ACCESS BANK

Market being Evaluated = ACCESS Date: 02/12/2011

Asset Price : (Closing Price ) ………………………… 4.70

Market Volatility :………………………………………… 99.68%

Number of Days :………………………………………. 5

Upper Target :………………………………………….. 5.27

Lower Target :………………………………………….. 4.18

Probability of Finishing Above Upper Target :…. 15.87 %
or Below the Lower Target. ( If one Target Selected )

Probability of Finishing Below Upper Target :….. 84.13 %
or Above the Lower Target. ( If one Target Selected )

Access Bank is within a Daily time frame support level of N4.70. Note that multiple bottoms exist at the N4.70 since 27th September 2011. Though the weekly/monthly support levels shows N4.70 as new resistant levels.

If it gets below that range,N4.30-N4.18 is imminent. while a rebound above the support has an upper target of N5.27 as the stock is within a Double Bottom chart pattern formation (Which are very bullish Candle sticks).

BAGCO

Market being Evaluated = BAGCO Date: 27/09/2011

Asset Price : (Closing Price ) ………………………… 1.67

Market Volatility :………………………………………… 51.88%

Number of Days :………………………………………. 5

Upper Target :………………………………………….. 1.96

Lower Target :………………………………………….. 1.63

Bagco current analysis shows a Chart Pattern of Head & Shoulder formation” with N1.77 acting as a Neckline.

We have 2 market scenario here:

1. Complete the Head & shoulder pattern to close within N1.96- N2.00 September/October resistant lines
2. Pullback to N1.63 support levels.

CCNN

Market being Evaluated = CCNN Date: 02/12/2011

Asset Price : (Closing Price ) ………………………… 4.79

Market Volatility :………………………………………… 46.69%

Number of Days :………………………………………. 5

Upper Target :………………………………………….. 5.06

Lower Target :………………………………………….. 4.54

The chart below shows a Monthly trend analysis of CCNN trending within 2006 and 2008 Support levels, 2011 shows a 100% retracement  within N4.37. Good entry points here.

DANGOTE FLOUR

Market being Evaluated = DANGFLOUR Date: 02/12/2011

Asset Price : (Closing Price ) ………………………… 5.10

Market Volatility :………………………………………… 51.33%

Number of Days :………………………………………. 5

Upper Target :………………………………………….. 5.42

Lower Target :………………………………………….. 4.80

Dangflour seems to have found Good support levels at N5.00 since November performing same in December.
A good stock to have in your portfolio. Worst case scenario is Nov 2009 lows of N4.38.

DANGOTE SUGAR

Market being Evaluated = DANGSUGAR Date: 02/12/2011

Asset Price : (Closing Price ) ………………………… 4.40

Market Volatility :………………………………………… 54.10%

Number of Days :………………………………………. 5

Upper Target :………………………………………….. 4.69

Lower Target :………………………………………….. 4.13

Dangote Sugar is within 17th of November Support levels of N4.30 forming a ” Bullish Inverted hammer candle stick “.
Bullish Inverted Hammer Pattern is a candlestick characterized by a long upper shadow and a small real body preceded by a long black real body.

Explanation:

Bullish Inverted Hammer Pattern occurs in a bearish background. In a day of inverted hammer, market opens at or near its low. Then prices change direction and we see a rally. However the bulls cannot succeed to sustain the rally during the rest of the day and prices finally close either at or near the low of the day. It may not be clear why this type of price action is interpreted as a potential reversal signal. The answer has to do with what happens over the next day. If the next day opens above the real body of the inverted hammer, it means that those who shorted at the opening or closing of the inverted hammer day are losing money. The longer the market holds above the inverted hammer’s real body, the more likely these shorts will attempt to cover their positions. This may ignite a rally as a result of covered short positions, which may then inspire the bottom pickers to take long positions.

Recognition Criteria:

1. Market is currently characterized by downtrend.
2. The first day of the pattern is a black candlestick formed at the lower end of the trading range.
3. The second day of the pattern is a small real body and is formed at the lower end of the trading range.
4. The color of the second real body is not important, however the color of the body is black in the first day.
5. No gap down is required, as long as the pattern is seen after a downtrend.
6. Upper shadow of the second small body should be at least twice as long as the real body.
7. The second body does not have lower shadow or it has only a very little lower shadow.

Important Factors:

Bullish verification on the day following the inverted hammer is required. This verification can be in the form of the next day opening above the inverted hammer’s real body. The larger the gap the stronger the confirmation will be. A white candlestick with higher prices can also be another form of confirmation.

DIAMONDBANK

Market being Evaluated = DIAMONDBNK Date: 02/12/2011

Asset Price : (Closing Price ) ………………………… 2.90

Market Volatility :………………………………………… 98.87%

Number of Days :………………………………………. 5

Upper Target :………………………………………….. 3.26

Lower Target :………………………………………….. 2.58

Diamondbank from a weekly time frame has been trending within a Downward slopping channel since June.

Now finding support for now around a 200% of N2.90 Fibonacci levels forming a Doji Candlestick.

Still has room of breaking this level down to N2.58 points.

FCMB

Market being Evaluated = FCMB Date: 02/12/2011

Asset Price : (Closing Price ) ………………………… 3.78

Market Volatility :………………………………………… 49.80%

Number of Days :………………………………………. 5

Upper Target :………………………………………….. 4.01

Lower Target :………………………………………….. 3.57

FCMB broke its one week November ending support line of N4.20 with a 3 day bearish trend closing at N3.78 within September support levels of N3.70

A good entry at N3.70 but has room to hit N3.57 200% Fib levels.

FIDELITY BANK
Asset Price : (Closing Price ) ………………………… 1.30

Market Volatility :………………………………………… 49.52%

Number of Days :………………………………………. 5

Upper Target :………………………………………….. 1.38

Lower Target :………………………………………….. 1.23
Fidelity’s weekly charts has been trending Lower Lows since 15th December 2010 till date. Now trending within a support level we expect good entry points at these level.

We need to establish good rebound above these points or more downward trend to N1.23 points.

FIRST BANK DAILY

Market being Evaluated = FIRSTBANK Date: 02/12/2011

Asset Price : (Closing Price ) ………………………… 9.01

Market Volatility :………………………………………… 25.38%

Number of Days :………………………………………. 5

Upper Target :………………………………………….. 9.28

Lower Target :………………………………………….. 8.79

Firstbank daily time frame is approaching October Lows of N8.79, but we did see the heavy buying pressure at N9.01 forming a Bullish Candlestick signs of a rebound.

FIRST BANK WEEKLY

The weekly charts shows a support of N8.38 points

FIRST BANK MONTHLY

Shows a Downward slopping channel since 2009 recording Lower Highs and Lows. More room for spiking October Lows of N8.38

GT ASSURE

Market being Evaluated = GTASSURE Date: 02/12/2011

Asset Price : (Closing Price ) ………………………… 1.50

Market Volatility :………………………………………… 50.71%

Number of Days :………………………………………. 5

Upper Target :………………………………………….. 1.59

Lower Target :………………………………………….. 1.41

Displaying same pattern formation as BAGCO, The Inverted Head & Shoulder pattern (Bullish)

Though finding strong resistance of Highs of N153, A breakout above these level will complete the Right Shoulder pattern price target around N1.90.

IBTC

Market being Evaluated = IBTC Date: 02/12/2011

Asset Price : (Closing Price ) ………………………… 7.54

Market Volatility :………………………………………… 47.09%

Number of Days :………………………………………. 5

Upper Target :………………………………………….. 7.97

Lower Target :………………………………………….. 7.01

Ibtc broke an Up ward slopping channel formation on the 4th of November 2011 after recording Higher Lows from 2009 with strong Weekly resistant at N11.56 and Daily resistant of N9.93.

I see good entry points around N7.01 support levels recorded since 2009 and 2010.

SKYEBANK

Market being Evaluated = SKYEBANK Date: 02/12/2011

Asset Price : (Closing Price ) ………………………… 4.36

Market Volatility :………………………………………… 44.08%

Number of Days :………………………………………. 5

Upper Target :………………………………………….. 4.59

Lower Target :………………………………………….. 4.00

Watch out for entry points at N4.00 mid 2009 support levels

ZENITHBANK

Market being Evaluated = ZENITHBANK Date: 02/12/2011

Asset Price : (Closing Price ) ………………………… 11.45

Market Volatility :………………………………………… 23.24%

Number of Days :………………………………………. 5

Upper Target :………………………………………….. 11.77

Lower Target :………………………………………….. 11.30

Zenith is within a buying range of its support levels of N11.30

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The market resumed jumping out of the window type of bear trend today down by 35.51 points below 20,000 with a huge dive on strong volume to close at 19,967.84.

Today’s “rally” is merely a textbook drop after a drastic drop. Almost all big drops are followed by a small pullup,

The simplest way to tell is to see if the candlestick today made a lower high, lower low and a lower close. Yes today’s rally was down on Huge volume but it has not threatened the last short-term support Low of 19,961.20 recorded in 24th Nov 2011. Until this line breaks along 19,800 13th October Lows before I accept the NSE ASI is indeed in trouble.

Today marks the beginning of the December effect (Seasonal stock Market patterns) where many hedge funds, institutional investors, and high powered individual traders are taking advantage of to bring home major profits on short term trades.

Below are reasons why you should start planning your Entry Levels despite continuous downward trend:

The Best Months For Stocks

In order from top to bottom, the best months for seasonal stock market trends are January and December.

According  to Market analysis, December is the #2 best month of the year. bit of an anomaly in seasonal stock market trends due to what traders call the “December Effect.” The NSE ASI average gain is+100-490 points from last 2 weeks of December into January.

While there is no such thing as a foolproof recurring pattern in the stock market, certain trends do often occur based on the time of the year. These tendencies are not usually stronger than overall market conditions, but they do play into price fluctuations. In the event of a relatively tame stock market, a seasonal trend may offer greater influence on price movement. When market conditions are particularly dramatic, however, seasonal trends usually have little influence.

Window Dressing

Years End

January Effect

VOLUME PRICE ANALYSIS