Market Update for November 7
The seesaw movement on the Nigerian Exchange continued on Thursday, as trading closed on a positive note revealing that the NGX is resisting further decline as bargain hunters take advantage of pullbacks and corrections to buy into value. This pushed the benchmark NGX All-Share index higher on a high traded volume and positive market internals, short-living the loss suffered in the previous session. Also, breadth expansion indicates buying interests in the energy sector and others in the face of high volatility and continued portfolio rebalancing among market players on the strength of Q3 scorecards among others factors, even as world leaders continue to analyze the impacts of the imminent return of U.S President Donald Trump to the White House on global politics and trades in 2025 and beyond. Also, as the Feds plan its policy meetings to be quarterly in the New Year instead of the current two months’ interval.
The seeming rebound on Thursday is a sign that the exchange is searching for direction, while creating opportunities for new entrants that know the importance of buying low and selling high in any market condition. This particularly true now that many stocks on the NGX are undervalued with high upside potentials, as market players digest the recently submitted quarterly earnings reports that revealed the states of various companies on the NGX. Already, many companies reported better than expected Q3 numbers that reveal value with high possibility of higher payout at the end of the current financial year as sector rotation continue in the midst of positioning for year-end seasonality and others.
The NGX index has formed a bottom reversal chart pattern that signals an uptrend in a recovery phase, which needs confirmation as trading opens on Friday. This retracement from strong support level of 96,684.90 basis points and 96,597.70bps after forming a bottoming tail and uptrend candles. This created the perfect setup for high probability swing trade to catch end of year repositioning. Also, the index trading below the T-line and the two moving averages of 50-EMA and 50-SMA, this indicate weak momentum and somewhat in the midst of changing market fundamentals and technical as reflected at the end of Thursday trading.
Technically, the NGX is trying to resist further decline in the midst of downtrend and buying sentiment, as transacted volume improved to signal positioning around strong support levels of 96,597.79bps and 96,674.35bps. Just as candlestick formation and momentum indicators had revealed somewhat weakness and strength returning to the market gradually. As ADX is looking up at 22.07, while RSI and Money Flow Index were mixed to read 39.22 and 28.24 points against the previous session 37.98 and 29.24 points respectively. Market players should watch this current trend and trade wisely in the face of funds leaving the market on buying sentiment in some sectors and profit taking in others. Also, trading volume pattern continued to oscillates, suggesting position taking and selloffs in the market amid players studying the corporate earnings and policy direction of the government that look confused.
To navigate the rest of this quarter and beyond profitably using fundamental and technical analysis to run, join investdata live sessions at noon every Monday, Wednesday and Friday trading day “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 range market. Despite the oscillating volume of transaction witnessed in recent time, it is time to go shopping for undervalued stocks, sectors and the next insider playing opportunity.
Oil prices on Thursday slide to continue its oscillation, trading at $75.17 per barrel in the midst of increasing US inventory, tropical influence and strong dollar . Even as the ongoing geopolitical tensions and conflict in the Middle East. As demand outlook remained mixed in the midst of rate cuts by the major central banks of the world and OPEC delaying output increase to January 2025. The rising geopolitical uncertainties across many economies remains a threat to the global economy and energy consumption. This trend may likely continue for the rest of 2024, while the up and down movement continues to drive volatility, even as the raging war between Ukraine and Russia continues to influence global oil supply and demand.
Meanwhile, Thursday’s trading opened in the upside and was sustained throughout the session, on buying interest in highly priced stocks and blue chip companies. This situation pushed the NGX’s index to an intra-day high of 97,071.bps from its lows of 96,472.49bps, before closing above its opening level at 96,924.86bps.
Market technicals were positive and strong with higher volume when compared to the previous session in the midst of breadth favoring the bulls on a buying sentiment as revealed by Investdata’s Sentiments Report showing 76% buy position and 24% sell volume. The total transaction volume index stood at 1.34 points, just as energy behind the day’s performance was weak as Money Flow Index inched down to read 28.24pts, from the previous day’s 29.24pts, indicating that funds left the market, despite closing in the green.
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Index and Market Caps
The composite NGX All-Share Index at the close of Thursday’s trading gained 357.62 basis points, closing at 96,924.86bps, after opening at 96,567.24bps, representing a 0.37% growth. Market capitalization rose by N216.82bn, closing at N58.73tr from the previous day’s N58.51tr, representing a 0.37% appreciation in value.
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Thursday’s upturn was driven by position taking and accumulation in the shares of Aradel, Oando, Conoil, Wapco, Conhall, Zenith Bank, Accesscorp and Honeywell, among others. This impacted positivey on Year-To-Date gain as it inched up to 29.62%, while Market capitalization gain stood at N14.52tr, representing 43.54% growth over its opening level for the year.
Bullish Sector Indices
Sectoral performance indexes were up save for NGX Banking index that closed lower by 0.38%, while the NGX Insurance led advancer after gaining 1.84%, followed by Energy, Industrial and Consumer goods with 1.77%, 0.02% and 0.01% respectively.
Market breadth turned positive, as gainers outnumbered loser in the ratio of 31:16, while activities in volume and value were up after investors exchanged 744.54 million shares worth N16.48bn. Volume was driven by trades in Japaul Gold, Ellah Lakes, FBNH, Oando and UBA.
Conoil and Aradel Holdings were the best performing stocks, gaining 10% each, closing at N236.50 and N441.20 per share respectively on the back of sentiment and market forces respectively. On the flip side, Trantalizer and NGXGroup lost 6.25% and 5.81% respectively, closing at N0.60 and N23.50per share, purely on selloffs and profit taking.
Market Outlook
We expect mixed sentiment and recovery to continue on low valuation, profit taking and positioning. Also, sector rotation and portfolio rebalancing continues in the market, with investors taking advantage of pullbacks 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.
Take Action
Invest 2025 Traders & Investors Summit
Theme: Profit From 2025 Once-A-Decade Opportunities & Patterns
Sub-Topics
- Impact of the 2025 National Budget & Changing Government Policies On Investment Windows
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- Real Estate Investment Opportunities in 2025 Amid Fiscal Policy Reforms.
- How To Navigate The Alternative Investment Markets To Grow Your Portfolio
- Building An All-Weather Portfolio To Stay Ahead Of NGX In 2025 & Beyond
- Profitable Chart Patterns & Timing To Trade “Year Ending In 5” Effect On NGX
- The Place Of Corporate Earnings In Trading & Investing For Retirement
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How to construct a resilient and Powerful Portfolio that adapts to market changes.
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Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
08028164085
