Bearish Outing On NGX, Despite Easing Inflationary Pressure, Undervalued Market

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The bearish sentiment continued for the second consecutive week on the Nigerian Exchange, as selling momentum in highly priced stocks and blue-chip companies weighed on the composite index and some other sectorial indexes. There was however buying interest in financial services and energy stocks that supported positive market internals and high traded volume in the period under review. Within the period, the economy withnessed a mild easing in macroeconomic data, just as recent rates decline in the latest TB auction that impacted sector rotation and the continued portfolio repositioning on the NGX.

The candlestick formation and pattern for the week revealed a bullish hammer that signalled a reversal chart pattern that needs confirmation in the new week. It is worthy of note that the secret of predicting market or stock movement is in the candlestick pattern as it reveals insider knowledge of what the market or stock will do next in under any condition. In every candlestick, there is a hidden message that helps successful investors and traders to read market turns with ease and accuracy, riding trends longer than possible and cutting loses faster than a hot knife through butter.

The current market situation has increased the opportunities available to make money, but you have to trade volatility correctly to get the big gains it offers. Also, you must protect your portfolio from being on the wrong side of the market, or any surprises on big down days. Understanding volatile trend and reversal days with clear technical tools will help you benefit from market volatility or oscillation at any time. As the month of August draws gradually to a close, let the index and price actions below guide your decision:

NGXASI Weekly Chart (Opening)

NGX Banking Weekly Index