Market Update for July 22
It was yet another bullish session on the Nigerian Exchange on Tuesday, on the back of an increase in buying interest in large cap stocks and blue-chip companies as investors and traders begin to play defensive in the midst of extended uptrend and distribution phase that signals that correction is underway. Also, the market is digesting the recent rebased GDP data which revealed the growth of 3.13% which was slightly below the old Q4 national growth of 3.4% in 2024, in the face of seeming decline in rebased inflation for three consecutive months. We also see the possibility that the market will on Wednesday react Tuesday’s outcome of the Central Bank of Nigeria policy meeting where members of the its Monetary Policy Committee voted to keep the benchmark rate unchanged at 27.5% for the third successive meetings. The CBN is prioritizing price stability over credit expansion due to the country’s sticky inflation as reflected in June report and global uncertainties.
This signal cautious trading and investing at this reflective point of the market making a new historic all-time high of 132,452 to breakout 132,000 psychological line on a low traded volume and warning sign of weakness that support pullback depending on market forces as trading opens at midweek. Especially as NGX remains bullish at overbought region with more stocks and sectors hitting a new 52-week highs, and also momentum indicators like money flow and RSI reading 100 and 93.64 points respectively.
The broader market seems weak, notwithstanding the price appreciation of Nestle Nigeria, Wapco and others which weighed the benchmark NGX All-Share index as it closed higher on a higher trade volume and positive market breadth.
Recall that we projected that MPR will be left unchanged to further solidify economic recovery and boost fundamentals and attract more funds into the economy, especially if the Naira remains relatively stable. The market continues to analyze the impressive performance of Wapco such as the top and bottom lines growth of 75% and 352% respectively to N517bn and N133bn in the first six months of 2025. This translated to earnings per share of N8.24 as against the N1.82 each reported in the same period of last year. This should give investors insight of what they should expect from others in that sector or industry.
The NGX is still at a critical level of pulling back or continued uptrend, as market is already at its overbought zone with strong momentum that calls for cautious trading as mentioned earlier, while more companies continue to notify the exchange of the board meetings to approve their Q2 earnings reports. Pullbacks in stocks are creating opportunities for new entry and bargain hunting, as the market expects corporate numbers to beat investor expectations. There is also the impact of market confidence around the government’s economic reforms, while foreign investors are also seeing value in the NGX, a situation that has supported inflow of funds into the market and the economy at large.
The lingering tariff and U.S President Donald Trump’s deadline of August 1, 2025 for effective take off with trade partners continues to unsettle the global economy, even in the midst of geopolitical tensions arising from the Middle East ceasefire. This has impacted mixed sentiment in major stock markets of the world. Nonetheless, there is need to avoid panic selling, even as profit booking could arise. As such, let your trading plan and investment objective guide your entry and exit. It is noteworthy that the improvement in macroeconomic data points to where the domestic economy is heading. This is the time to pay close attention to momentum, price action and market structure while timing your trades and avoiding losing money with your stop loss. While navigating the market and targeting value on the strength of companies’ performance and prospect, focus on growth and defensive stocks with strong earnings power and positive technicals in the face of sector rotation persisting.
Technically, money flow and other momentum tools were up, indicating that funds are entering the market on position taking that presents opportunities to buy low and sell high in the midst ongoing volatility and overbought state of NGX. The index inched higher on a buying sentiment, thereby creating the perfect setup for high probability of continuation to catch better-than-expected corporate earnings to reposition at the right price. Also, the index action trading above T-line and the two moving averages of 50-EMA and 50-SMA which reveals strength in the midst of changing market sentiment and technicals on the NGX. But RSI continued to signal overbought market as it reads 93.30.
Investor sentiment for the day, as revealed by the candlestick formation and momentum indicators shows that the ADX is very strong to read 78.76points, while RSI and Money Flow Index were up at 93.64 and 100 points against the previous session’s 93.30 and 96.74 points respectively. NGX at this point call for players to be watchful and trade wisely in the midst of markup, distribution and mixed sentiment in some sectors and profit taking in others on a daily time frame. Also, trading volume pattern continues to oscillate, suggesting smart money are present in the market amid revaluation of the market and short-term opportunities, looking at economic events in the face of policy direction of the government and global economic outlook in the face of uncertainties and geopolitical tensions.
To navigate the rest of Q3 and beyond profitably, it is important to run with economic events, fundamental and technical analysis, join investdata live sessions at noon every Monday, Wednesday and Friday’s trading session “and also get investdata technical toolbox to play the current state of the market do suggest that discerning investors are gradually becoming greedy, while others are fearful, as seen in the recent pullbacks. Despite the oscillating volume of transaction witnessed in recent time, it is time to position in undervalued stocks, sectors and the next insider playing opportunity.
Oil prices on Tuesday inched lower and continued its oscillation, trading at $68.83 per barrel, in the midst of key trade talks falter ahead of tariff deadline and threats from US President for sanctions on buyers of Russian oil. Also, the ceasefire in Mideast for peace talks that seem to be shaking, and Ukraine-Russia war. Even as OPEC production hike misguide the market. The ongoing developments will trigger inflation and rate hikes if peace is achieved. All eyes are on emanating quarterly earnings reports. Tariffs and geopolitical tensions are already driving mixed macroeconomic data emanating from the U.S and China which remain a concern for investors. Just as uncertainties across many economies remain a major source of concern to the global economy and energy consumption in 2025. This trend may likely continue, while the up and down movement continues to drive volatility.
Tuesday’s trading started in the green and was sustained for the rest of the session, despite oscillating profit taking and buying interest in all class of stocks. This situation pushed the composite index to its intra-day high of 133,165bps from its lows of 131,797bps, before closing above its opening level at 132,452bps.
Market technicals were positive and strong with higher volume when compared to previous session in the midst of breadth that favors the bulls on a mixed sentiment as revealed by Investdata’s Sentiments Report showing 48% buy position and 52% sell volume. The total transaction volume index stood at 0.82points, as impetus behind the day’s performance was strong, as Money Flow Index was inched higher to read 100pts, from the previous day’s 96.74pts, indicating that funds entered the market.
To successfully invest and trade in this volatile market for the rest of the quarter and year, order for Investdata’s video on Buy & Sell Technical Analysis Toolbox to navigate the volatile market profitably, enhance trading decisions and boost your bottom line. Also, to up your game in stock trading and investing, understanding the key to trading price and index action will go a long way to make the difference in your trading results, check out the video materials on our site and take action.
Index and Market Caps
At the end of Tuesday’s trading, the benchmark NGX All-Share Index gained 789.92bps, closing at 132,451.73bps from 131,661.81bps, representing a 0.60% growth, while market capitalization rose by N499.71bn to close at N83.79tr from the previous day’s N83.29tr, representing a 0.60% appreciation in value.
Attention: If you have not signed up for INVESTDATA’s buy and sell signal setup, don’t delay, because the number of stocks entering their oversold range has increased as market correction and volatility call for intelligent trading and positive chart patterns to be on our watchlist. These stocks have potentials to retrace, considering their earnings prospects and the oscillating moves in an upmarket and recovery economy.
To become a member, send ‘YES’ or ‘STOCKS’ to the phone numbers below. Take advantage of this service to buy right and sell right at the current oscillating market in the midst of earnings season, portfolio reshuffling, and repositioning as we await an economic reform policy that can stimulate and re-track the economy to the path of growth and development.
The session upturn was driven by accumulation and buying interest in the shares of Wapco, BUA Cement, Dangote Sugar, Nestle, Nahco, Accesscorp, and Cadbury among others, which impacted positively on Year-To-Date gain which inched higher to 28.69% while Market capitalization gain stood at N33.72tr, representing 33.69% increase over its opening level for the year.
Bullish Sector Indices
Sectoral performance indexes were higher, save for NGX Oil & Gas index that closed lower with 1.04%, while the NGX Industrial goods index led the advancers after gaining 2.87%, followed by Consumer goods, Insurance and Banking with 0.50%, 0.25% and 0.12% respectively. Market breadth was positive as gainers outnumbered losers in the ratio of 36:34, while activities in volume and value were up, after investors exchanged 762.60 million shares worth N26.79bn, with volume driven by trades in Accesscorp, EllahLakes, UBA, GTCO and Wapco.
Dangote Sugar and TIP were the best performing stocks, gaining 10% and 9.97% respectively, closing at N56.10 and N12.13 per share respectively on the back of sentiment and market forces. On the flip side, Legend Internet and Ellah Lakes lost 10% each, closing at N5.31 and N9.90per share, purely on profit taking and selloffs.
Market Outlook
We expect mixed sentiments to continue, as players digest outcome of MPC meeting, in expectation of more corporate earnings and sector rotation in the midst of profit booking and cautious trading, while investors analyse earnings release so far and buying into value in the midst of portfolio reshuffling, even as few audited accounts are expected to hit the market with dividend announcement.
Also, sector rotation and portfolio rebalancing continued in the market with investors taking advantage of price correction to buy into value. This is amid the volatility and pullbacks that add more strength to upside potential. Consequently, investors should take advantage of price correction. Also looking at the trends and events across the globe and domestically.
Ambrose Omordion
CRO|Investdata Consulting Ltd
ambrose.o@investdataonline.com
Tel: 08028164085, 08179547605
