Coronation Insurance Plc is a Nigerian insurance group with roots going back to 1958. It became a publicly listed company in 1990 and obtained a life-insurance licence in 2000. The life operation was subsequently separated into Coronation Life Assurance
Current price: N2.25
Rating: Buy
Price projection: N3.5 and N4.5
Technical Analysis
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
Elliott wave analysis
Weekly chart: Market overview
Coronation Insurance (WAPIC) started the week bullish on the weekly chart. This performance signifies market recovery because the stock retraced to the 0.5 Fibonnaci level after an impulsive WXY pattern.
In line with this performance, WAPIC’s liquidity improved. Thus, investors should watch for increased momentum, indicating the market strength. Also, MACD’s bearish momentum remains weak. Thus, investors should watch for a bullish signal to confirm the market’s outlook
Daily chart: Trading opportunity
On the daily chart, Coronation Insurance attempted to complete its fifth wave, confirming a full market correction. Thus, traders and investors should watch N1.5 and N2 as potential strong support levels, with prices projected at N3.5 and N4.5.
In llne with this performance, the stock’s liquidity increased exponentially. However, overall sentiment remains bearish as WAPIC’s momentum sustained its declining trajectory. Also, MACD commenced its bearish signal, attracting investors to buy into value.
SWOT Analysis
Coronation Insurance enters the next phase of its growth cycle with stronger fundamentals, a better-capitalised balance sheet and improving core insurance profitability.
The strongest part of the investment case is the combination of rising insurance-service results, expanding equity and improved liquidity at a time when Nigeria’s insurance sector is undergoing regulatory recapitalisation.
However, the sharp increase in operating expenses and claims remains a key concern. For investors, WAPIC therefore represents a potential earnings-and-valuation re-rating story rather than a dividend play, but confirmation of sustained underwriting improvement is essential before a stronger long-term share-price re-rating can be considered fully established.
