Investors Look To Earnings Season For Strong Recovery Moves By Nigerian Stocks

Market Update for March 1

Nigeria Stock Exchange on Thursday had what could be described as a tsunami to kick start the month of March on a negative note as it wiped out the gains of previous day.
The day started with a marginal gap up in the morning followed by a sharp decline in the mid-morning session to afternoon to reverse the sharp rebound of February’s last trading session near resistance. The bear wedges formed were reduced slightly in the last trading minutes to close the day.
The sharp pullback witnessed during the trading session were due to value losses by high cap stocks after the index had broken the symmetrical triangle chart pattern to trade above the 20-Day Moving Average in the previous day.
The index hit intraday highs of 43,366.29 from lows of 42,628.21 before closing at 42,843.38.
Market technicals for the day were negative and weak, with selling pressure of 71% on low volume traded, while buying position was 29%. Volume index was 0.42 with money flow index at 58.13 point.
Meanwhile, the composite NSE All-Share index shed 487.16 points to close at 42,843.38 after opening at 43,330.54 basis points, representing a decline of 1.12% on low traded volume that is lower than the previous day’s. Similarly, market capitalisation for the day fell N174.83bn to close at N15.37tr from an opening value of N15.55tr, which also represented 1.12% value loss in investors’ portfolios.
The downturn resulted from losses recorded by medium and high cap stocks like Nigerian Breweries, FBNH, Zenith Bank, Guaranty Trust Bank, Total Nigeria, Stanbic IBTC, Access Bank, Dangote Cement, Lafarge Africa and ETI that impacted negatively on the NSE’s Year-To-Date returns, cutting it to 12.03%, just as market capitalisation gain for the period was reduced to N1.59tr, representing 12.94% YTD growth.
The All Share index and other sectorial indexes closed lower, except for the NSE Oil/Gas and NSE Insurance that closed higher with 0.97% and 0.14% respectively, while the NSE AseM remained unchanged.
Market breadth remained negative as there were more decliners than advancers in the ratio of 31:28. Market activities in volume and value terms were down by 35.08% and 54.87% to 371.25m shares worth N4.87bn from previous day’s 571.87m units valued at N10.8bn.
Transaction volume for the day was boosted by financial services and conglomerate stocks like Transcorp, Zenith Bank, Guaranty Trust Bank, Wapic Insurance and Royal Exchange Insurance , which witnessed increased trading to top the activity chart.
Japual Oil and First Aluminum were the best performing stocks for the day by topping the advancers table with 7.41% and 4.65% respectively to close at N0.58 and N0.45 on market forces while FTNCOCOA and Vitafoam were the worst performers, losing 5% apiece to close at N0.38 and N2.85 respectively on market forces and profit taking.

Market Outlook

Being the last trading day of the week that ushered in the peak period of earnings reporting season, expect volatility and strong recovery moves to continue and profit taking at different times depending on the expected numbers.
Also, expect volatility and repositioning to continue, while profit taking will reduce on the strength of expected payout and earnings surprises.
However, we would like to reiterate that investors should not panic but go for equities with intrinsic value, especially during this season when dividend payment is ongoing.
We advise investors to allow numbers guide their decisions while repositioning for the year trading activities, especially now that stock prices remain volatile amidst improving company, economic and market fundamentals.
It is time to combine fundamentals and technical tools to take decision by knowing the support and resistant level to reposition or exit any position. A stock market is in cycles. You must know the cycle it, or particular stocks therein are to successfully manage your trading and investment risk. For stocks that should be on your shopping list to buy in these seasonal changes as the year unfolds, sign up to INVESTDATA BUY AND SELL signal setup by calling 08032055467.
Get your home study pack of the INVEST 2018 Traders & Investors Summit and ride with the current recovery on Nigeria’s stock market and economy, thereby ensuring that you invest and trade with knowledge. You can also access stocks analysed in the home study pack of the INVEST 2018 traders and the investors’ summit held on February 24, 2018, including the 15 stock-picks for 2018 are available now to guide your positioning as trading for the year.
Comprehensive training materials on stock Trading and Investing for Financial Independence series are Available, you can play and watch on your mobile phone, laptop, desktop and TV set. Kindly call or send yes to 08032055467, 08028164086 or 08111811223.
Meanwhile, a big THANK YOU to facilitators and participants that made the Chart Summit over the weekend a huge success. The eyes of participants were opened to the three tents of technical analysis and how it can enhance traders income, as well as simple trading indicators and tools for successful traders were revealed. Charting of the NSE Index on short and long term direction movements were carried out to guide investors and traders using technical indicators to know the energy behind funds entering the market, or individual stocks and when such funds begin to exit.

Here are some of the great feedbacks from the just concluded Chart Summit:

I have not seen a more lucid, concise, organized & insightful trading and investing educational presentations than the chart summit. All the speakers opened my eyes to how to manage risk using TA, despite the fact that I have been playing the market for 21 years. Mr Ambrose thank you. Please keep this good work you are doing for Nigerians.
Ikechukuw Olisa, an investor

Ambrose and Tunde’s presentations were the simplest, clearest and best understood of the many that I have heard in my trading lifetime of nearly 25 years, please keep it up. Thanks for your time
Oyebola Ademola

The Invest 2018 home study pack content was what attracted me to attend this chart summit today, it was so good that I just couldn’t stop watching. Today’s chart summit was the best class I have attended in over 10 years. It’s going to make a big difference in my trading.
Patrick Udo

Thanks Mike for opening my eyes to risk management and portfolio selection using Technical Analysis tools. Thanks to investdata for putting chart summit together for novice and advance traders. It was well presented and right to the point. Again thanks so much for the beautiful presentation. It’s superb.
Musa Ahmed

Chart Summit on technical analysis for novice and advance traders home study pack will be available on Friday, March 2, 2018, for those who have booked for the USB, you can play it on your phone, TV and laptop. Those interested in the pack should send ‘Yes’ or call any of: 08032055467, 08028164086 or 08111811223.

Ambrose Omordion
CRO|Investdata Consulting Ltd
Tel: 08028164085, 0803205546