The Nigerian Exchange (NGX) experienced a strong bearish momentum across benchmark sectors at the midweek. Amid this sentiment, some sectors stood out. This report should, therefore, help investors choose sectors that have favourable investment conditions.
NGX ASI: Nigeria’s All-Share Index
The NGX ASI lost 0.41% and closed at 246,980.17 bps. During intraday trading, the index experienced massive profit-taking while investors bought into value. This performance sustained the index’s action within its critical zone.
The bearish volume closed strongly above its moving average. In line with this performance, the index’s liquidity and momentum declined. Yet, they closed strongly above their thresholds with readings of 56 and 61, respectively.
NGXBNK: Banking Sector Index
The banking index lost 1,37% and closed at 2,532.17 bps. During intraday trading, the index retraced to the 0.382 Fibonacci level in wave 4. At this level, the index met strong support at 2,500.33 bps, which could lead to an impulsive wave 5. This corrective phase offers investment opportunities as market participants take profits.
The bearish volume closed solidly on the daily chart, aligning with the index’s sentiment. In line with this performance, the index’s liquidity and momentum declined, closing at 90 and 71.7, respectively. This performance signifies a strong market.
Top losers: FCMB (-4.66%), WEMABANK (-2.21%), GTCO (-1.91%), FIRSTHOLD (-1.65%), and ZENITH (-1.58%)
NGXCSMG: Consumer Goods Sector Index
The consumer goods index lost 0.99%, closing at 6,978.39 bps. During intraday trading, the index experienced a strong pullback, which suggests profit-taking. This pullback strengthened the index’s markdown phase on the lower timeframe. Following this pullback, the index met strong support at 6,913.93 bps, which suggests a brief, continuous bullish trend.
The bearish volume closed solidly on the daily chart, which aligned with the overall index sentiment. Also, liquidity and momentum declined, closing at 72.4 and 91.9, respectively. This performance suggests a sustainable, strong market. Notably, MACD’s bullish momentum signaled divergence, which should alert investors because a trend reversal is on the horizon.
Top gainers: NEM (+9.97%), SUNUASSUR (+9.83%), MANSARD (+5.60%), WAPIC (+1.56%), and UCAP (+1.11%)
Top losers: CORNERS (-10%), ROYALEX (-6.57%), DANGSUGAR (-4.53%), HONYFLOUR (-4.01%), and HBMNG (-3.80%)
NGXIND: Industrial Sector Index
The industrial sector index lost 0.68% and closed at 10,588.38 bps. During intraday trading, the index had more losers than winners, leading to a strong bearish candlestick. In line with this performance, the bearish volume closed strongly above its moving average. Also, the market’s liquidity and momentum declined, closing at 51, respectively. Investors should expect a market reversal as MACD’s bullish momentum closed with divergence.
Top losers: TRIPPLE (-6.16%), HBMNG (-3.80%), and CUTIX (-1.11%)
NGXOGSE: Oil and Gas Sector Index
The oil and gas index shed 0.08% and closed at 5,246.53 bps. During intraday trading, the index experienced strong bearish momentum, which closed below its moving average. This performance suggests continuous bearish momentum as investors buy into value.
In line with the performance, the bearish volume closed strongly above its moving average. Also, liquidity declined, closing at 44.8. Finally, the index momentum remained flat, closing at 45.7, as MACD’s bullish signal declined. Thus, investors should expect a trend reversal.
NGXINS: Insurance Sector Index
The insurance sector index gained 2.69% and closed at 1,218.74 bps. During intraday trading, the index experienced strong bullish momentum, which traded into the 1.618 Fibonnaci level. Thus, investors should expect a brief pullback to buy into value.
The bullish volume closed strongly above its moving average, signalling continuous bullish momentum. In line with this performance, liquidity and momentum increase, attracting investment opportunities.
Top gainers: LASACO (+10%), NEM (+9.97%), SUNUASSUR (+9.83%), PRESTIGE (+7.14%), and CONHALLPLC (+6.52%)
Top losers: CORNERS (-10%), REGALIN (-4.60%), INTENEG (-4.43%), SOVRENI (-4.00%), and VERITASKAP (-0.60%)
Market Analyst Insight
The consumer goods and banking sectors have started a brief corrective phase. As the month ends investor should remain vigilant, as these indices could commence another markdown phase. Notably, the insurance sector appears attractive; thus, investors should take note of fundamentally strong insurance companies and understand the index is within its corrective phase.
