Low Stock Prices Offer Opportunities, As Selling Pressure Subsides Ahead Earnings Season

Market Update for February 8

It was yet another bearish Thursday on the floor of the Nigerian Stock Exchange as the indicators plunged from the very beginning.
First, it extended the corrective wave for the fourth consecutive days of decline, and by midday the composite index rallied to intraday highs of 43,616.14 which was the day’s resistance from its low 43,261.66 point to reflect high volatility as the ongoing shakeout or correction momentum continues to subside, indicating that reversal is imminent, despite the mixed technicals at the end of the Thursday’s trading session as revealed by the huge volume traded and declining negative market breadth.
The economic recovery and transformation that had supported the inflow of funds into the economy and stock market are still intact as international investment banks continue to grow their presence in emerging markets, with Africa and Middle East remaining their focus. This is especially as bond sales, M&As and trading activities continue to attract attention in Nigeria, Egypt and the United Arab Emirates, spurring investment banking revenues among the banks.
Going by the World Bank’s projection for 2018, Middle East and North African regions are likely to witness a 3% growth rate, based on the expectation that improved oil prices, despite the recent oscillation and hope that improved economic reforms would make the region an attractive destination for fund managers, private banks, hedge funds and investment banks.
Notably, Nigeria is undergoing a turnaround from traditional IPOs, public offers to Right Issues, placements and bonds, which guarantees strong investment banking performance and offers opportunities for upcoming merchant banks in the country.
The positive economic data continues to confirm and reflect the impact of the sustained intervention by the Central Bank of Nigeria (CBN) in the foreign exchange segment of the inter-bank market, given the economy’s import dependence. There is a growing agitation among analysts that the CBN may cut rate before the end of first half of the year, a situation that may become even more compelling, if the nation’s inflation rate continue its downward movement in the January data expected to be released on Wednesday, February 14.
At the end trading on Thursday, the market formed a double bottom that signals reversal or breakdown of the 2014 resistance level, following which market forces would decide today’s direction, against the backdrop of its 20-Day moving average heading to the 50 DMA on a strong selling pressure of 82% and buying position of 18% of total transaction, with volume index of 2.42 with money flow index of 56.37 point looking down.
The All-Share Index shed 211.27 points to close at 43,326.89 basis points after opening at 43,538.16, representing a decline of 0.49% on a huge traded volume that was higher than the previous day’s. Similarly, market capitalisation went down by N75.82bn to close at N15.55tr after opening at N15.62tr which also represented a 0.49% depreciation in investors’ portfolios worth.
The downturn recorded was due to losses by Nestle Nigeria, Stanbic IBTC, Nigerian Breweries, Dangote Sugar, FBNH, Access Bank and UBN, all of which further dragged the NSE’s Year-To-Date returns to 13.29%, just as market capitalisation gain for the period reduced to N1.94tr, representing a 14.24% YTD growth.
The benchmark index and all other sectorial indexes closed in red, except for the NSE Industrial and NSE Oil/Gas, which were green, while NSE AseM that remained flat. Market breadth for the day remained negative number of decliners outweigh advancers in the ratio of 26:17, to continue its four days pullback.
Market activities in volume and value terms were up by 336.94% and 63.98% respectively at 2.22bn shares worth N7.59bn, from previous day’s 508.3m units valued at N4.57bn.
Transaction volume for the day was considerably boosted by financial services stocks like Sterling Bank, Skye Bank, UBA, JaizBank, and FCMB, which witness increased trading to top the activity chart as most traded.
Unity Bank and Forte Oil topped the advancers table with gain of 9.17% and 4.90% to close at N1.75and N48.20 respectively, on market forces and full year earnings expectations, while Skye Bank and Consolidated Hallmark Insurance led the decliners by side, losing 8.93% and 5.26% to close at N1.02 and N0.36 each, on profit booking and market forces.


Being the last trading day of the week, prices are low to attract positioning that support high possibility of rebound today but expect volatility and portfolio reshuffling/repositioning to continue, while selling pressure reduces ahead of full year audited reports that will be in the market very soon, going by the hanging man candlestick formation pattern as market close yesterday. But stay with value stocks as today trading confirm direction.
However, we would like to reiterate that investors should go for equities with intrinsic value, especially during this season that dividend payment is approaching.
We advise investors to allow numbers guide their decisions while repositioning for the rest of the year’s 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. Market is in phases know the cycles in order to manage your trading and investing risk. For stocks that should be on your shopping list to buy in this seasonality changes as the year winds down, sign up to INVESTDATA BUY AND SELL signal setup by calling 08028164085.
Get your home study pack on INVEST 2018 Traders & Investors Summit and ride with the current recovery on Nigeria’s stock market and economy. By investing and trading knowledgeable. You can also still access stocks analysed in the home study pack of the INVEST 2018 traders & investors summit, which includes 15 stocks picks for 2018 are available now to guide your positioning as trading for the year just started.
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. Kindly call or send yes to 08032055467, 08028164086 or 08111811223.

Chart Summit! Chart Summit!! Chart Summit!!!

Investdata Consulting Ltd is organizing another workshop where experts would simplify market jargons with the aim of increasing understanding and increasing the pool of retail investors.
Theme: ABC of Technical Analysis for the Novices and Advance Traders
Have you traded the stock market before and failed? It is a known fact that about 90% of those who trade without knowledge and understanding of the dynamics will end up losing 90% of their capital most of the time. You don’t have to be one of them.
Therefore, when you attend this Practical ABC Technical Analysis conference, you would learn how to trade such that you become one of the lucky 10%, who manage to consistently play the market profitable by themselves through our SIMPLE trading strategies and buy & sell signal setup.
Consistency is the key to equity trading and investing successfully.
At investdata we have been teaching investors simple and proven strategies which when implemented makes you a successful trader and investor in any market situation, especially when it comes to equipping you well enough to know how to protect their portfolios and profit from market corrections in a recovering economy.
We have also, over time, focused attention on attuning the mindset of investors and traders to managing risk, while eliminating emotions when trading so as to avoid irrational investment decisions.
Attend the Practical Conference on Technical Analysis for the Novices and Advance Traders. We would be taking participants through:
• Understanding the momentum behind current equity movement and when to exit using SIMPLE Technical Indicators and Tools to avoid losing capital and profit.
• Our team of experts and time-tested resource persons will show you how you too can successfully and confidently trade and invest in stocks profitably on your own from your phone, laptop and/or desktop computer.
• Know what the smart money are doing
• Know what they are buying
• How you should buy what they are buying.

The workshop is scheduled as follows:
DATE: February 24. 2018
TIME: 10am – 3.00pm
VENUE: Ostra Hall & Hotel, Behind MKO Abiola Gardens, Opposite NNPC Gas Plant, CBD, Alausa, Ikeja. Lagos.

This chart summit is designed specifically for those who:
• Jump out of profit position in fear of giving profits back?
• Indecision in pulling the trigger because you fear the prospects of a loss?
• Holding on to losing positions because you fear taking the loss?
• Trading often leads into unplanned trades because you fear leaving money on the table?
• Small trade size or investing small amount because you’ve just had a large loss?
• Increasing you position size to try and make up for past losses?
This practical workshop is for novice traders, investors, professionals and fund managers who want to overcome fear and improve their trading performance. The workshop is basically on technical analysis and practical charting teaching on evidence-based techniques that is working in today market. Also the power of focused trading and investing strategies that will help participants build mental skills to turn fear into profits and protect capital.
Registration is ongoing
There will be sales of stock trading and investing materials at the end of the conference, Fundamental and Technical Analysis materials, including home study packs you can play and viewed on your phone, laptop and television set. All at 20% discount for attending. You need to prepare yourself and profit from the market and the recovery economy to truly achieve your financial independence and freedom in 2018. Also come with your laptop.
For more enquiries about the programme, please call 08032055467, 08179547605, and 08111811223.

Ambrose Omordion
CRO|Investdata Consulting Ltd

Tel: 08028164085, 08032055467