Market Update for January 10

Nigeria’s stock market had its fifth consecutive trading sessions of gaining streak extended with stronger momentum to record the highest rise so far in 2018. In the process, it achieved the first breakout of the 41,000 psychological line for the first time since 2014 on a strong huge volume in the border of a five-year strong resistance level at 43,141.53, with a breakout expected to usher in a longer bull-run likely to be supported by the effects of the oncoming earnings reporting season and the continued flow of funds into the market. There is also the twin influence of crude oil price touching a three-year high and the government’s success at sustaining peace in Nigeria’s oil bearing Niger-Delta region that has ensured stable oil production output to boost economic recovery and growth. These have helped to also support stronger fundamentals now expected to reflect on the numbers to be posted by quoted companies in the market any moment from now.
At its opening, Monday’s session, set new highs, while consolidating the previous gains for most of the day, as the opening bang was maintained on a strong volatility to close at over 41,000 at 41,816.11 basis points.
Market technicals for the midweek was strong and positive as institutional money flow index continued to look up on a huge volume with investor sentiments remaining on high gear as reflected in the 100% buying pressure, and volume index at 1.92 points of the day’s total transaction.
Meanwhile, the composite index NSEASI gained a significant 1,453.14 points to close at 41,816.11 after opening at 40,362.97, representing a growth of 3.60% on huge traded volume that was higher than previous levels. Similarly, market capitalisation for the day went up by N517.12bn, closing at N14.88tr, from an opening value of N14.36tr which also represented 3.60% appreciation in investors’ position.
The increased number of companies that recorded value gained for the day impacted positively on the NSE’s Year-to-Date returns, pushing it to 9.34%, just as market capitalisation for seven trading days had accumulated N1.27tr year-to-date, representing 9.34% growth from its opening value.
The All Share Index and other sectorial indices closed higher, except for NSE AseM that was flat.
Market breadth for day remained positive and stronger as the advancers widened to outnumber decliners in the ratio of 60:3, continuing its five-day up market.
Market activities in volume and value terms for the day were up by 41.23% and 69.45% respectively to 1.09bn shares worth N13.30 billion from the previous day’s 770.87 million units valued at N7.89bn. Transaction volume for the day was significantly boosted by transactions in financial services and conglomerate sectors, as trading was heavy in Transcorp, Diamond Bank, Access Bank, Fidelity Bank and FBNH which topped the activity chart as most traded stocks by volume.
Best performing stocks for the day were petroleum marketing stocks: Conoil and Eterna, which topped the advancers’ table, gaining 10.23% and 10.17% respectively to close at N37.51 and N5.96 each. The gains were propelled by a bull-run and expectation of full year earnings reports, while Guinness and UACN Property led the decliners’ table after shedding 1.76% and 0.99% apiece to close at N100 and N3.00 respectively, resulting from profit booking by traders and investors.

TODAY OUTLOOK

The ongoing volatility will continue this morning as profit booking is underway amidst repositioning for earnings reporting season as quarterly and full year score-cards of companies are expected to be in the market any moment from now. Also, let us fix our gaze on this 2014 market peak 43,141.53 which had been the four year major resistance point which a breakout will confirm bullish trend continuation or correction. This is a very dicey point as money flow indicator revealed funds still entering the market as at mid-week’s market close. The above NSE Monthly Time Frame Movement has formed a triple bottom chart pattern that supports uptrend. but let us watch market forces and sentiments give direction.
However, we would like to reiterate that investors should go for value equities, especially during this season that dividend payment is approaching.
We advise investors to allow numbers guide their decisions while repositioning for the rest of the year’s trading activities, especially now that stock prices remain volatile amidst improving company, economic and market fundamentals.
It is time to combine fundamentals and technical tools to take decision by knowing the support and resistant level to reposition or exit any position. Market is in phases know the cycles in order to manage your trading and investing risk. For stocks that should be on your shopping list to buy in this seasonality changes as the year winds down, sign up to INVESTDATA BUY AND SELL signal setup by calling 08032055467.
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Ambrose Omordion
CRO|Investdata Consulting Ltd
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