The monthly chart gives retail investors a better long-term view of the market’s performance. Applying Elliott wave theory, the article should help investors understand why the bearish momentum in the month of June was strong and the way forward
NGX ASI: Nigeria’s All-Share Index
The NGX ASI lost 8.46% and closed at 229,419.19 basis points in the month of June which experienced a strong bearish momentum across key sectoral indices due to profit-taking, portfolio rebalancing, and sectoral rotation. Such defensive moves help investors preparing for an upward rally.
Monthly chart indicator analysis for NGX ASI
On the monthly chart, the index liquidity and momentum remained strong and high, while MACD’s bullish signal declined. This performance signifies profit-taking and an opportunity to buy into value. Which sectors offer investment opportunities for long-term investors?
Key Sectoral Index Performance
NGXBNK: Banking Sector Index
On the monthly chart, the banking index lost 11.56%, closing at 2,070.11 bps, reflecting the strong bearish sentiment in the intra-month market. Using the Elliot wave, the NGXBNK is currently in its fourth wave of the cycle degree. Thus, investors should expect an extended pullback.
Monthly chart indicator analysis for NGXBNK
On the monthly chart, the bearish volume was moderately strong, indicating massive profit-taking by long-term investors. However, the index liquidity and momentum remain strong, making the sector favourable for investors who want to buy into value for the long run
NGXCSMG: Consumer Goods Sector Index
The consumer Goods index lost 11.58% on the monthly chart, closing at 5,810.03 bps. The index also experienced strong bearish momentum as it trades within its fourth wave. While a continuous pullback is expected, investing in high-value stocks with outstanding fundamentals should be a good defensive strategy in this sector.
Monthly chart indicator analysis for NGXCSMG
The bearish volume closed moderately strong on the monthly chart. This performance signaled massive profit-taking. In line with the performance, MACD’s bullish signal signaled divergence, indicating a continuous bearish market. Given this sentiment, smart long-term investors are buying into value as the index liquidity and momentum remain strong.
NGXIND: Industrial Sector Index
The industrial index lost 16.38%, closing at 10,162 bps. This performance marked the beginning of the index’s corrective phase, the fourth wave in Elliott wave theory. Thus, investors should expect an extended bearish action.
Monthly chart indicator analysis for NGXIND
Despite the strong bearish sentiment during the intra-month market, volume closed below its moving average. This performance also indicates profit-taking as investors rebalance their portfolios. As MACD’s bullish signal indicates divergence, investors should continue investing because the index’s liquidity and momentum are strong.
NDXOGSE: Oil and Gas Sector Index
The oil index lost 14.71% and closed at 5,079.06 bps. Currently, the index is within its fourth wave of the higher degree. Given this sentiment, investors should also expect continuous bearish momentum.
Monthly chart indicator analysis for NGXOGSE
The bearish volume closed strongly above its moving average. This performance signified the strong bearish momentum which occurred in the intramonth market, amid global tensions. MACD’s bullish signal also closed, indicating divergence. On the other hand, the index liquidity and momentum remained strong, which is favourable for long-term investment.
NGXINS: Insurance Sector Index
On the monthly chart, the insurance index will soon complete its fourth wave of the Elliott wave cycle. After this performance, a strong bullish momentum is on the horizon. Thus, investing in this sector now is the best option for investors. The index lost 12.61% and closed at 1.098.12 bps.
Monthly chart indicator analysis for NGXINS
On the monthly chart, the indicators indicate that there is an opportunity for investors to buy into value. Although MACD’s bearish signal is strong, the market liquidity and momentum remain solid above their thresholds. This performance offers investors investment opportunities while the bearish volume remained low.
