Market Update for June 25
The bullishness of midweek trading on the Nigerian Exchange reflected a broader positive investors sentiment that has been sustained back-to-back for six consecutive sessions on a very high traded volume and expanded positive market breadth that led to major breakouts across key psychological lines and resistance levels. Many low, mid and high cap stocks made new 52-week highs, indicating strong momentum and technicals that weighed on the benchmark NGX All-Share index pushing it across the 120,000 and 121,000 basis points marks respectively, after which it close higher at yet another historic high of 121,257.70bps in one session.
These major breakouts on strong buying sentiments and high volume to continue the markup phase of NGX signal strength, but calls for cautious trading and portfolio realignment ahead of the earnings reporting season, as pullback is underway in form of profit booking in some large cap stocks for the index to gather more strength needed to trade even higher. Note that dividend qualification dates and payments of some companies are close by. The market is witnessing bargain hunting along quarter end window dressing as the first half of 2025 winds down gradually ahead of earnings expectations and Central Bank of Nigeria’s policy meeting in July.
The increasing traded volume in recent times signals institutional investors participation and investor confidence around government’s economic reforms. As foreign investors also seeing value on NGX which had supported inflow of funds into the market and the economy at large. Nevertheless, the expected mixed trend in Q3, may not halt the bull trend, if the expected corporate earnings beat expectation. Already slowdown in fixed income market rates had triggered money flowing into the market as last week TB primary market auction rate declined across all tenors.
Also, market players should digest the recent macroeconomic reports and unfolding global uncertainties due to Mideast ceasefire moves for peace talk, which had impacted positively on major stock markets of the world. Nonetheless, there is need to avoid panic selling, even as profit booking could arise. As such, let your trading plan and investment objective guide your entry and exit. It is noteworthy that the improvement in macroeconomic data points to where the domestic economy is heading. This is the time to pay close attention to momentum, price action and market structure while timing your trades and avoiding losing money with your stop loss. While navigating the market and targeting value on the strength of companies’ performance and prospect, focus on growth and defensive stocks with strong earnings power and positive technicals in the face of sector rotation persisting.
Technically, money flow and other momentum tools were up indicating that funds entered to the market on position taking that presents opportunities to buy low and sell high in the midst ongoing volatility and overbought state of NGX. The index inched higher on a buying interest, thereby creating the perfect setup for high probability of continuation to catch better-than-expected corporate earnings to reposition at the right price. Also, the index action trading above T-line and the two moving averages of 50-EMA and 50-SMA which reveals strength in the midst of changing market fundamentals and technicals on the NGX and the economy. But RSI signal overbought market at the current level or zone, which also called cautious trading and know when to cash out profit even when taking positions.
Investors sentiment at the midweek, as revealed by the candlestick formation and momentum indicators, shows that the ADX is strong to read 57.09 points, while RSI and Money Flow Index were up at 90.37 and 81.15points against the previous session’s 88.65 and 80.40 points respectively. At this stage of NGX, players should watch the trend and trade wisely in the midst of markup phase and buying sentiment in some sectors and profit taking in others on a daily time frame. Also, trading volume pattern continues to oscillate, suggesting smart money are gradually taking position amid revaluation of the market and short-term opportunities, looking at economic events in the face of policy direction of the government and global economic outlook in the face of uncertainties and geopolitical tensions.
To navigate the rest of Q2 and beyond profitably, it is important to run with economic events, fundamental and technical analysis, join investdata live sessions at noon every Monday, Wednesday and Friday’s trading session “and also get investdata technical toolbox to play the current state of the market do suggest that discerning investors are gradually becoming greedy, while others are fearful, as seen in the recent pullbacks. Despite the oscillating volume of transaction witnessed in recent time, it is time to position in undervalued stocks, sectors and the next insider playing opportunity.
Oil prices at midweek inched lower to continued its oscillation, trading at $66.67 per barrel, in the face of ceasefire in Mideast for peace talks, and Ukraine-Russia war.
The Organisation of Petroleum Exporting Countries (OPEC), in all these is seemingly confused. The ongoing developments will deflate inflation and rate hikes if peace is achieved. Tariffs and geopolitical tensions are already driving mixed macroeconomic data emanating from the U.S and China which remain a concern for investors. Just as uncertainties across many economies remain a major source of concern to the global economy and energy consumption in 2025. This trend may likely continue, while the up and down movement continues to drive volatility.
Midweek’s trading opened in the green and was sustained powerfully for the rest of the session, on buying interest in highly priced stocks and others. This situation pushed the NGX’s index to intra-day high of 121,264.20bps from its lows of 119,804.6bps, before closing sharply above its opening level at 121,257.68bps.
Market technicals were positive and strong with higher volume when compared to previous session in the midst of breadth that favors the bulls on a buying pressure as revealed by Investdata’s Sentiments Report showing 100% buy position and 0% sell volume. The total transaction volume index stood at 1.27points, just as impetus behind the day’s performance was strong, as Money Flow Index was inched higher to read 81.15pts, from the previous day’s 80.40pts, indicating that funds entering the market.
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Index and Market Caps
The NGX All-Share index gained 1,466.87 basis points, closing at 121,257.68bps from 119.790.82bps, representing a 1.22% growth, while market capitalization rose by N1.18 trillion to close at N76.76tr from the previous day’s N75.58tr, representing a 1.57% value gain, due to the listing of Stanbic IBTC 2.94billion ordinary shares of 50 kobo at N50.50.
Attention: If you have not signed up for INVESTDATA’s buy and sell signal setup, don’t delay, because the number of stocks entering their oversold range has increased as market correction and volatility call for intelligent trading and positive chart patterns to be on our watchlist. These stocks have potentials to retrace, considering their earnings prospects and the oscillating moves in an upmarket and weak economy.
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Meanwhile, the upturn was driven by accumulation in the shares of Dangote Sugar, Okomu Oil, Oando, BUA Cement, MTNN, Zenith Bank, Accesscorp, Nahco, CWG, Nascon and Caverton among others, which impacted positively on Year-To-Date gain which inched higher to 17.81% while Market capitalization gain stood at N22.70tr, representing 22.30% increase over its opening level for the year.
Bullish Sector Indices
Sectoral performance indexes were higher, led by NGX Banking index after gaining 2.38%, followed by Consumer, Industrial goods, Insurance and Energy with 2.25%, 2.24%, 1.97% and 1.10% respectively.
Market breadth was positive as gainers outnumbered losers in the ratio of 56:17, while activities in volume and value were up, after investors exchanged 861.67m shares worth N26.18bn, with volume driven by trades in Fidelity Bank, Caverton, Zenith Bank, Japaul Gold and Accesscorp.
Dangote Sugar and Oando were the best performing stocks, gaining 10% each, closing at N48.40 and N68.75 per share respectively on the back of sentiment and market forces. On the flip side, University Press and RT Briscoe lost 6.25% and 6.12% respectively, closing at N6.00 and N2.30 per share, purely on profit taking.
Market Outlook
We expect mixed sentiments on profit taking, bargain hunting and sector rotation, as investors buy into value in expectation of audited corporate earnings of March year end and others in the midst of portfolio reshuffling, even as few audited accounts are expected to hit the market with dividend announcement.
Also, sector rotation and portfolio rebalancing continued in the market with investors taking advantage of price correction to buy into value. This is amid the volatility and pullbacks that add more strength to upside potential. Consequently, investors should take advantage of price correction. Also looking at the trends and events across the globe and domestically.
Investdata Q3 Master Class
Theme: Unlocking Trading Opportunities On NGX Amidst Fundamental Shift In Global Macroeconomic & Uncertainties
Sub-Topics
- 1.A Macro View of the Nigerian Stock Market & How To Navigate by Alhaji Kurfi Garba , MD/CEO APT Securities & Funds Ltd
- 2.It’s All In Charts- Trading Profitability with Price Actions& Other Technical Tools by Mr Abdul-Rasheed Momoh, Executive Director Operations, TRW Stockbroking Ltd
- 3.The Power of Reliable Dividend & Earnings Amid Portfolio Realignmentsby The Power of Reliable Dividend & Earnings Amid Portfolio Realignments, Mr Peter Sunday Adebola, Manging Director/CEO Edgefield Capital Management lLtd
- 4.Unlocking The Power Of The Volume Factor In Trends,& 5 Stocks To Ride On At the NGX Pullback by Ambrose Omordion, CRO Investdata Consulting Ltd
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The NGX 2025 market volatility has continued to create wealth for smart traders and discerning investors who took action, or are ready to take action. If you have been wondering:
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Ambrose Omordion
CRO|Investdata Consulting Ltd
ambrose.o@investdataonline.com
Tel: 08028164085, 08179547605
