The Nigerian Exchange (NGX) experienced strong bullish sentiment across benchmark sectors on the back of sector rotation amid a corrective market. Thus, this article should help investors know which sector is suitable for investment
NGX ASI: Nigeria’s All-Share Index
The NGX ASI gained 1.12%, closing at 246,183.95 basis points. During intraday trade, the index experienced strong bullish momentum, which broke its resistance at 244,289.06 bps. Closing within the 0.382 Fibonacci level, the index enters its final recovery phase.
Daily chart indicator analysis for NGX ASI
Volume closed strongly above its moving average with 851.6 million shares purchased against an average of 646.34 million shares purchased. MACD’s bullish momentum declined from 1398 to 1313. Also, RSI and MFI increased, closing at 63 and 67, respectively
Although the market is strong in terms of liquidity, volume, and momentum, MACD’s decline can’t be ignored. This decline signals a potential bearish market is on the horizon. Thus, improved MACD momentum should align with the overall market bullishness recovery.
NGXBNK: Banking Sector Index
The banking sector gained 3.14% and closed at 2,422.72 basis points. During intraday trading, the index experienced a strong bullish rally, which led to a resistance breakout at 2,413.91 bps. This performance puts the index in its final recovery phase; thus, a continuous bullish rally would mean a full market recovery. Notable gainers included FIRSTHOLD (+9.95%), FCMB (+7.87%), UBA (+6.37%), ACCESSCORP (+2%), and ZENITH (+2.37%)
Daily chart indicator analysis for NGXBNK
Volume closed strongly above its moving average with 497.987 million purchased shares against an average of 288.909 million purchased shares. MACD’s bullish momentum increased from 37.11 to 45.78. MFI and RSI closed at 90 and 71, respectively
Following the strong bullish sentiment, the index’s volume, momentum, and liquidity gained strength. Also, this performance indicates that the index is regaining investors’ interest amid its corrective phase
NGXCSMG: Consumer Goods Sector Index
The consumer goods index gained 2.17%, closed at 6,695.41 bps. During intraday trading, the index experience a strong bullish momentum, which broke its resistance level at 6,559.87 bps. This performance puts the index within its final recovery phase. Notable contributors includes GUINNESS (+3.34%), blue-chip banks and insurance companies.
Daily chart indicator analysis for NGXCSMG
Volume closed strongly above its moving average with 559.942 million purchased shares against an average of 327.74 million purchased shares. MACD’s bullish momentum increased from 92 to 106. Finally RSI and MFI closed at 71 and 90, respectively. This indicator performance suggests a strong recovering market with strong volume, liquidity and momentum.
NGXIND: Industrial Sector Index
The industrial sector index gained 2.82% and closed at 10,325.88 bps. During intraday trading, the market bulls dominated, which led to the index closing above its moving average. This performance puts the NGXIND within its first recovery phase. Also, a notable contributor included BUACEMENT (+9.98%).
Daily chart indicator analysis for NGXIND
Volume closed strongly above its moving average with 23.987 million shares purchased against an average of 12.058 million shares purchased. MACD’s bullish momentum declined from 22.5 to 22. Finally, MFI and RSI increased, closing at 41.8 and 44.3, respectively.
Despite the strong volume, MACD sustained its divergence signal. Thus, investors should observe the index’s liquidity and momentum performance as they remain moderate. A sustained bullish run should strengthen the index’s recovery phase
NGXOGSE: Oil and Gas Sector Index
The oil and gas index experienced a fractional gain of 0.08%. During intraday trade, the index slightly gained momentum amid sector rotation. Closing at 5,253.79 bps, the index remains above its moving average. This performance signals sustained recovery strength. A notable contributor included ETERNAO (+5.90%).
Daily chart indicator analysis for NGXOGSE
The index volume closed with 10.9 million shares purchased against an average of 23.6 million shares purchased. MACD’s bullish momentum declined from 45 to 39. Also, MFI and RSI closed at 74.6 and 46.3, respectively.
The index’s volume remained low, as MACD sustained its divergence signal. Also. momentum remained neutral but solid. However, the index’s liquidity increased, indicating sustained investors’ interest. A stronger bullish signal should determine the sector’s outlook
NGXINS: Insurance Sector Index
The insurance index gained 0.25%, closing at 1,138.72 bps. In intraday trading, the index pulled back and met strong support at 1,119 bps. This support led to strong bullish momentum, closing the market above its moving average. Notable contributors included NEM (+10%), PRESTIGE (+2.78%), INTENEG (+0.64%), and AIICO (+0.48%)
Daily chart indicator analysis for NGXINS
Volume closed strongly above its moving average with 98.74 million shares purchased against an average of 68.77 million shares purchased. MACD’s bullish momentum increased from 7 to 7.6. Also, MFI and RSI increased, closing at 55.1 and 47.27, respectively.
These indicator performances signify a strong market recovery. The index gained volume, momentum, and liquidity within its first recovery phase. This performance shows sustained interest in the sector amid recapitalization.
Market Analyst Insight
Generally, the overall market remains within its corrective phase. Within this phase, the banking and consumer goods sectors are leading the indices’ recovery. A breakout at key resistance levels would signal a fully strong market for investment
Following this performance, the insurance and oil sectors are experiencing increased money flow. Thus, these sectors could become the next attractive sectors during another sector rotation phase.
