Market Update for September 26
The bull resurfaced on the Nigerian Exchange to start the last full trading week of September on a positive outing in the of midst bargain hunting and prevailing low valuation as revealed by market price to earnings of 10.1x ahead of MPC meeting outcome and portfolio rebalancing in the final week of the third quarter. This halted three consecutive sessions of decline on low traded volume and negative market breadth.
The seeming renewed buying interest in blue chip and large cap stocks that suffered losses in the last weeks had supported the key performance NGX All-Share index and some major sectorial indices to close higher for the session in the midst of low liquidity, negative macroeconomic data and preparation of 2023 general election.
Positive sentiment for banking stocks continued at the end of Monday despite the mixed sentiment of the general market on strong volatility across board in the face of price adjustments for dividend and selloffs as a result of the increasing monetary policy tightening. This is why all eyes are on MPC meeting outcome today as the aggressive hawkish monetary policy across the globe continued despite warnings by the Wo, rld Bank and IMF that central banks should rethink rate hiking which could push the global economy into recession if not checked.
Believe it or not, it is officially the 4th and final quarter next week, but we need to finish the year strong, so join us this Saturday at Investdata Master Class, this is where we take a step back, analyze the general direction of the major trends, and then break it down into shorter timeframes for more tactical opportunities. The low valuation of NGX, high earnings and dividend yields on improved earnings released so far in the year, coupled with the expectation of third quarter corporate earnings to shape the market direction in the face of inflation hitting 17 years high above 20%, causing many players stay on the fence, waiting to confirm direction before jumping in, as outlook for the economy and the financial market remains unpredictable. However, there are sectors, industries and individual stocks that are still seeing positive activities from traders and investors. Those are stocks players should be paying attention to, as the correction in the NGX index action was halted after the third successive session, on improved buying sentiment in the midst of negative market breadth.
Market internals are revealing the hidden forces that work for both short and long-term traders to get into the best position and allow you to stay in them for maximum profit, despite the market rebounding or weaken further. The market’s internals that measure the forces behind the advancers and associated volume of the uptick or downtick. These two ratios tell you everything you need to know to predict future price movements. So, the volume pattern and index structure in recent sessions show position taking, while funds enter some stocks as revealed by money flow index which need to be confirmed, especially as negative sentiment supported the previous session candlestick formation.
At the current phase of the market, the decision of when to buy or sell individual stocks or an index, is always based on price actions and the money flow direction which combines price and volume. We only want to hold stocks that are increasing, or at least retaining their value, while avoiding equities that are on the decline, and the toolset to evaluate price action is technical analysis.
The contemporary technical analysis that works in the changing volatile market, is what you should adopt. That is why it’s never been more important to join me at the upcoming Q4 Master Class in October, the largest quarterly traders’ summit in Nigeria. I will be sharing new actionable strategies and real trading education that will arm you with the tools that will help you meet your financial goals for the rest of the year 2022 and beyond. Also, the last quarter of the year is around the corner, are you prepare to take advantage of seasonality to recover your losses and boost your gains?
To navigate the rest of the month profitably using fundamental and technical analysis to run, join investdata live sessions at noon every trading day “and also get investdata technical toolbox to play the current state of the market do suggest that discerning investors are gradually becoming greedy, while others are fearful, as seen in the recent range market. Despite the mixed sentiment witnessed, it is time to go shopping for undervalued stocks, sectors and the next insider playing opportunity.”
Oil price continued its oscillation as it rebounded slightly to trade at $85.03 on supply tighten due to Russia Ukraine war in the midst of weak demand and fear of recession around the globe on hawkish monetary policy by central banks, as China battle with Covid 19 lockdown. The up and down movement of oil price also continues to drive volatility in the face of rising interest rates and inflation. Despite the bailout package of the Chinese government to simulate economic activates and stable employment, as well as that of Germany aimed at managing the energy crisis.
Monday’s trading opened slightly in the green and was sustained, despite oscillating throughout the session on demand for blue chip stocks and large cap companies shares, a situation that pushed the NGX’s index to an intraday high of 49,218.35bps from its lows of 49,026.62 bps before closing above its opening figure at 49,218.35bps.
Market technicals were negative and weak, with lower volume of shares traded than the previous day in the midst of breadth favoring bears on buying sentiment as revealed by Investdata’s Sentiments Report showing 70% buy position and 30% sell volume. The total transaction volume index stood at 0.69points, just as momentum behind the day’s performance was weak as Money Flow Index is looking up at 18.12pts, from the previous day’s 15.86pts, indicating that funds entered the market.
For you to successfully invest and trade in this volatile market, order for Investdata’s video on Buy & Sell Technical Analysis Toolbox to navigate the volatile market 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 Market Caps
The NGX All-Share index, at the end of Monday’s trading gained 191.73bps, closing at 49,218.35bps, after opening at 49,026.62bps, representing a 0.40% growth, just as market capitalization rose by N98.91bn, closing at N26.57tr, from the previous day’s N26.44tr, which also represented a 0.40% appreciation in value.
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Meanwhile, Monday’s upturn was driven by accumulation in BUA Cement, UBN, FCMB, GTCO, NGX Group, Zenith Bank UCap, Sterling Bank and Multiverse among others, which impacted positively on Year-To-Date gain, as it increases to 15.22%. Market capitalization gain YTD also rose to N2.95tr YTD, representing a 20.18% rise over the opening level for the year.
Mixed Sector Indices
Sectorial performance indexes were mixed, as NGX Industrial goods and Banking closed higher by 1.89% and 0.52% respectively, while the NGX Insurance index led the decliners after losing 2.61%, followed by Energy and Consumer Goods with 0.54% and 0.11% respectively.
Market breadth was negative, as losers outpaced gainers in the ratio of 17:12; just as transactions in volume and value were down, with players exchanging 119.28m shares worth N854.76m, with volume driven by trades in Courtville Business Solution, FCMB, Zenith Bank, Transcorp and UBA.
Multiverse and FCMB were the best-performing stocks, gaining 9.93% and 8.02% respectively, closing at N3.10 and N3.50per share respectively on market forces and earnings expectation. On the flip side, Academy Press and NEM Insurance lost 10% and 8.91% respectively, closing at N1.53 and N4.91 per share, purely on profit taking.
We expect a mixed trend and sentiment on bargain hunting and end of the quarter window dressing by fund managers as investors digest the latest inflation data and outcome of MPC meeting today. This is just as banking stocks are gaining attention due to their undervalue state and the expected impact of rate hike on the sector, while portfolio rebalancing continues on bargain hunting in the midst of the worsening sovereign risks.
We note also the flow of funds into the fixed income segment on the rate hike by the CBN, as sector rotation persists. Analysts are also focused on the lookout for August CPI and flow of funds amid oil prices oscillation.
INVESTDATA Q4 MASTER CLASS
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- Equity Investing in changing volatile Market: Two Sides Of The Coin, Mr Rotimi Olubi. MD ARM Securities Ltd
- Arbitrage Trading & Other New Strategies To Hedge Against Stagflation, Mr Abiola Rasaq , CSCS
- Mastering Contemporary Technical Tools For Wealth Building In Uncertain Environment, Mr Abdul-Rasheed Momoh, Head Capital Market, Trw Stockbrokers Ltd
- Time & Price Analysis For Money Making In Uncertain Market, Mr Ambrose Omordion, CRO. Investdata Consulting Ltd.
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- How classical technical analysis had failed many traders in this high volatile market
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- Tradeable chart patterns and candlestick formations that signal real money-making opportunities
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Time: 9AM Prompt
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CRO|Investdata Consulting Ltd
Tel: 08028164085, 08179547605