Market Update for December 13
The nation’s equity market started the week’s trading on a strong positive note, driven by investors buying interest in telecoms giants MTN Nigeria and other blue-chip stocks to sustain a bull-run for the second consecutive trading session on a low traded volume and positive breadth ahead of historical trends and patterns associated with year-end and ahead of the Santa Claus rally.
Though the reasons for a Santa Claus rally are debatable, the main school of thought is that because there is less institutional participation in the market with many taking time off to travel, the stock market is left in the hands of the retail investors who tend to be more hopeful and cheerier.
However, this Christmas is far from average, casting doubts on the potential Christmas rally which normally occurs in the last two weeks of December.
There is the expected end of the quarter and year windowing by investors in the prices of listed companies by fund managers, coupled with the expectation of high cap stocks rally which has helped before now to close the market higher. With the behavior of the market so far, there are insinuations as to whether such sentiments will equally push many equities up during this period, especially between now and January when the billionaires are rated based on their assets and shareholding in publicly traded companies, which implies that there is likely to be movement in share prices in this season. This will ride on the general market performance, despite the mixed information on the new variant of the COVID-19 virus, as consumption of goods and services remain relatively stable during this festive season to further support the bottom lines of many companies as the year winds down.
However, if the institutional space is going to make a turnaround, it needs to overshoot the 44,000 basis points’ mark. That said, the smart money space is not sticking out as the only weak sector, looking at other key sectors like the financial, agriculture, industrial goods, services, banking, consumer goods, and construction.
This means that the retail space is not being singled out as profit-taking is still evident across the major indexes, following which if there is going to be a Santa rally this year, we can watch for signs that NGX 30 can hold these recent highs along with other key sectors.
Technically, the NGX index’s action has turned up on renewed buying interests, as momentum indicators for the day were green, while the ADX is reading 35.63, RSI at 50.06, and Money Flow Index flat at 33.39 points on the daily chart. The continuation of this trend depends largely on the interplay of market forces and inflow of funds into equity space as the market open on Tuesday.
Meanwhile, Monday’s trading opened slightly in the green and was sustained throughout the day after oscillating on position taking in highly capitalized stocks and others, a situation that pushed the NGX index to an intraday high of 42,582.94 basis points from its lows of 41,816.06bps before closing higher above the opening points at 42,411.12bps.
Market technicals for the session were positive and mixed as volume traded was lower than the previous day’s in the midst of positive breadth and positive sentimentas revealed by Investdata’s Sentiment Report showing 78% buy position and 22% sell volume. The total transaction volume index stood at 0.72 points, just as momentum behind the day’s performance remained relatively weak. Money Flow Index read 33.39 points, from the previous day’s 33.30points, indicating that funds entered the market.
For you to successfully invest and trade in this market, order for Investdata’s video on Buy &Sell Technical Analysis Toolbox to navigate the rest of the year profitably, enhance trading decisions and boost your bottom line. Also, to up your game in stock trading and investing, understanding the key to trading price and index action will go a long way to make the difference in your trading results, check out the video materials below.
Index and Mkt Cap Movement
At the end of Monday’s trading, the key performance NGX All-Share Index gained 528.15 basis points, at 42,411bps after opening at 41,882.97bps, representing a 1.26% growth, just as market capitalization rose by N275.59bn, closing at N22.13tr, from the opening value of N21.85tr, also representing 1.26% value gain.
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 buying range has just increased to 30 as they build a new bullish base and positive chart patterns to be on our watchlist. These stocks have double potentials to rally, considering their earnings prospect and the recovery move of the market at this time.
To become a member, send ‘YES’ or ‘STOCKS’ to the phone numbers below. Take advantage of this service to buy right and sell right at the current oscillating market in the midst of earnings season, portfolio reshuffling, and repositioning as we await an economic reform policy to stimulate and re-track the economy to the path of growth and development.
Monday’s upturn was driven by demand for stocks like MTNN, Dangote Cement, Lafarge Africa, UBN, GSK, Ecobank Transnational Incorporated, Honeywell, Vitafoam, Flour Mills and Meyer, among others, which impacted positively on Year-To-Date gain, increased it to 5.32%. Market capitalization stood at N1.12tr YTD, representing a 5.09% growth from the year’s opening value.
Bearish Sector Indices
Sectoral performance indexes were down, except for NGX Industrial Goods that closed higher by 0.66%, while NGX Oil/Gas led the decliners, after losing 0.86%, followed by Banking, Insurance and Consumer Goods with 0.47%, 0.15% and 0.05% respectively.
Market breadth remains positive as gainers outnumbered losers in the ratio of 23:16, while activities in volume and value terms were down after investors exchanged 229.64 million shares worth N3.39bn, compared to the previous day’s 444.93m units valued at N3.42bn. Volume was boosted by trades in Unity Bank, Universal Insurance, FBNH, GTCO, UBA, and Zenith Bank.
Meyer and Academy Press were the best-performing stocks after gaining 9.09% and 8.51% respectively, closing at N0.36 and N0.51per share respectively on market forces. On the flip side, NASCON Allied and Cornerstone Insurance lost 6.71% and 6% respectively, closing at N13.05 and N0.47 per share, purely on profit-taking.
Market Outlook
We expect an uptrend after the NGX index broke out its recent resistance level of 42,436.16 to test 42,582.94 points before closing above its 50-Day Moving Average and bouncing back on a low buying volume as assets rebalancing with seasonality historical trends and patterns are likely to influence equity prices ahead of year-end window dressing. The high volume traded in the midst of retracement is creating new buy opportunities on the strength of the Q3 numbers. Also, candlestick formation and volume traded during the session revealed that institutional players are buying especially banking stocks and other blue-chip companies, as the index rallied on a high volume. It is equally noteworthy that during a ranging market many players seat on the fence waiting for a breakout or down before jumping into any position. Even as many stocks are trading within their buy ranges, a situation expected to attract more funds into the stock market, given the Dividend Yield capable of serving as a hedge against inflation.
2022 Q1 Master Class Actionable Trading Plan & Opportunities
Now is the time to start planning for next year. If you don’t make a plan for 2022 right now, you could be left behind, which means you will end up doing the same things you did this year.
How did that work out for you? If you want to focus on building profitable portfolio in 2022. Then get access to Q1 2022 Master Trading Action Plan right away. The Action Plan includes 5 Hot Stocks for capital appreciation and 5 Double digit Dividend Paying Stocks. Get ready for Q1 2022.
Meanwhile, the home study packs on Comprehensive Stock Market trading course video, Stock Market Analysis Beyond Fundamental & Technical Analysis, INVEST 2021 New Opportunities & New Paths To Profits Summit materials and 10 Golden Stocks for 2021, Strategies and How to invest profitably in this Changing Market Dynamics/ Recession, Mastering Earnings Season For Profitable Investing and Trading in any market situation/ cycles, Life Beyond COVID 19 Investment Opportunities In The Stock Market are now available. To obtain your pack send ‘Yes’ or ‘Stock’ to 08028164085, 08179547605 now.
Ambrose Omordion
CRO|Investdata Consulting Ltd
ambrose.o@investdataonline.com
Tel: 08028164085, 08179547605
