As positive sentiment dominates the NGX market, some equity companies have shown signs of recovery. In this article, we’ll discuss these stocks and project potential profit-taking zones for investors who bought into value during the corrective phase.
Technical Analysis Tools
In this report, we shall use the following tools and analysis methods:
Elliott’s wave theory to understand the overall market sentiment
Fibonacci tools to determine support and resistance levels
The Relative Strength Index and volume to evaluate the market’s strength
The Money Flow Index to determine the market liquidity
Moving average and MACD to understand the nature of the trend
Top-down analysis to know the best investment position
Stocks to Watch
Computer Warehouse Group (CWG)
Over the past few months, CWG has been in its corrective Wave IV phase. The stock retraced to the 0.382 Fibonacci level and commenced its recovery. In line with this performance, its bullish volume closed strongly above its moving average, signalling strong buying interest. The stock’s liquidity and momentum also improved exponentially.
In June, CWG’s technical analysis suggested that investors should watch N20 as potential support, with prices projected at N27 and N30. Given this sentiment, market players should watch for continued bullishness amid recovery.
Nigerian Aviation Handling Company Plc (NAHCo)
NAHCo entered its deep corrective phase in May and completed waves a and b. The stock is currently in wave c, attempting to recover. In line with this sentiment, its liquidity and momentum increased as volume remained solid. MACD also sustained its bullish momentum.
In August, NAHCo’s technical analysis suggested that investors should watch N120 and N130 as potential support levels. They should also watch N273 and N400 as long-term profit-taking zones. For short-term profit-taking, investors should watch N220 and N260
NASCON Allied Industries (NASCON)
NASCON trades within Wave 4 of the intermediate Elliot wave cycle. After retracing to 100% of Wave 5 of the minor cycle, the stock commenced its recovery. In line with this performance, NASCON sustained strong momentum, liquidity, and volume.
In August, NASCON’s technical analysis suggested that investors should watch N175 and N165 as potential support levels, with prices projected at N280 and N360. Thus, this current pullback offers investment opportunities.
Consolidated Hallmark Insurance (CONHALL)
CONHALL began its recovery phase in September after a strong correction. In line with this performance, this phase improved the stock’s liquidity and momentum. Notably, MACD sustained its divergence signal due to profit-taking. Thus, investors should watch for continued bullishness.
In September, CONHALL’s performance suggested that investors should watch N5 and N5.50, with prices projected at N9 and N11. For short-term profit-taking, market players should watch the stock’s performance at N8.50.
UPDC Plc (UPDC)
UPDC experienced a 3-3-5 deep correction and started its recovery phase in September. In line with this performance, the stock’s volume closed strongly above its moving average. Its liquidity and momentum also improved exponentially.
In August, UPDC’s technical analysis suggested that investors should watch N2.5 and N3 as potential support levels. However, the stock initiated its recovery at N3.10. Thus, investors should watch N6 and N10 as profit-taking zones.
