NGXASI: All Shares Index

After breaking its 200,000 bps milestone, the Nigerian Exchange’s benchmark All-Share Index (NGXASI) started its distribution phase with an evening star candlestick pattern. The All Shares index closed bearish above its moving average at 199014.02 on Monday, indicating the relative strength of the Nigerian bourse in withstanding heavy bearish sentiment.

According to the MACD, the NGXASI has been bearish as of March. However, the index traded above its moving average, while MFI and RSI depict resilient and sustained market strength. Volume validates the current bearish sentiment; however, market analysts will speculate for the index to trade and close below the moving average. What sectors impacted NGXASI’s current performance?

Market Performance Per Stock

NGXBNK: Bank Sector Index

The banking sector index starts this week with a strong bearish sentiment. The index traded below its former resistance level, closing at 1918.28 bps. This index action indicates the end of a relatively strong markup phase.

Medium–term investors are responsible for this sturdy bearish sentiment. On the 30-min chart, a resistance level formed at the 2000 milestone before the Eid holiday. The resistance level led to a double–top candlestick formation. Thus, traders who bought on 13th March are taking their profit now.

The indicators on the daily timeframe send mixed signals. Thus, market spectators will focus on the predominant sentiment, which is bullish. The index closed above its moving average, which counters MACD and volume validation of the index’s bearish sentiment. MFI and RSI depict sustained liquidity and momentum in the index. Thus, the overall index action provides investors with an opportunity to participate in an upcoming bull rally.

NGXCSMG: Consumer Goods Sector Index

The NGXCSMG commences another distribution phase after trading below its former resistance level and moving average. Amidst profit–taking, market spectators will determine how sturdy the support level at 5463.29 is, as the index moves toward that zone.

On the 1–hour chart, market analysts posit that traders took profit aggressively at 5748.86 bps to complete the double-top candlestick formation. It also created a strong resistance level and a new all–time high for the index.

Based on the overall performance of the consumer goods index, the bearish sentiment is strong. Though MFI and RSI depict sustained momentum in the index, MACD, volume, and moving average validate the sturdiness of the bears.

NGXIND: Industrial Goods Sector

The industrial sector index sustains its bull rally above the moving average. At the moment, investors can only wait for a pullback in the lower timeframe to participate in this bullish sentiment. While this index remains positive and good for investors, factoring in other indicators and a top-down analysis is imperative.

The industrial sector started the week on a mild bullish run, which broke its all–time high at 8811.46. On the lower timeframes medium–term investor took profit, allowing other market players to buy into value. With the current index performance, spectators expect a massive pullback, especially at the 9000 bps milestone.

NGXOGSE: Oil and Gas Sector Index

The oil sector index showed signs of recovery after a strong bear surge. However, the index still traded below its moving average, closing at 4307.78. This bull candlestick will act as a new support level for the index, with 4430.77 as its resistance level.

MACD remains bearish, while volume depicts low bearish and bullish sentiment. MFI and RSI tilt upward to show signs of recovery. Market analysts will speculate on a potential bull surge. The lower timeframes traded above 4294.64, making the zone a strong support level.

NGXINS: Insurance Sector Index

The insurance sector closed with a doji candlestick pattern. A doji candlestick in a trend indicates that a market reversal is imminent. Given the current performance on this index, market analysts will expect a continuous market recovery.

Before the Eid break, volume confirmed a strong sentiment for the NGXINS. This indication was followed by an engulfing bull candlestick pattern. Other indicators are low; however, this is the best time for market players to buy into value.

Final Thought

The Nigerian Bourse continues its bearish sentiment following the profit taking in the banking and consumer goods sectors. The industrial sector has started showing signs of a potential pullback despite its strong markup phase. Finally, the insurance and oil sectors are recovering from their strong bearish sentiments.

While the sentiments for each sector remain mixed, market analysts will expect an overall quick market recovery before March runs out. This is due to pending earnings results from major companies in each sector.