The Nigerian equity market remained resilient and sturdy last wee, sutaining the current bull sentiment, with its composite All-Share Index attempts to break its resistance level of 204,928.11 basi points for another full market level. The index closed on Fridy at 203770.40 with a 100% buy bullish candlestick.
The overall performance of each indicated the impact of the bullish market. Despite the index’s ups and downs, its liquidity and momentum remained solid. MACD’s bullish signal weakened last week. This performance was due to portfolio rebalancing and profit-taking. How did the sectoral indices perform?
Sectoral Index Performance
NGXBNK: Banking Sector Index
The banking sector index fully recovered last week. After a brief consolidation between 1954.24 and 1859.93, the index ended with a bullish hammer candlestick. This candlestick led to a strong bullish sentiment in the index. The NGXBNK closed with a new all-time high in 2021.12.
On the weekly timeframe, the indicators displayed signs of recovery. MACD’s bullish signal strengthened, aligning with the bullish volume. This bullish volume reads above its moving average at 1.732 billion against 1.362 billion. This kind of performance attracts investors to buy into value.
NGXCSMG: Consumer Goods Sector Index
The NGXCSMG experienced a strong bull surge this week. However, it closed near its resistance level (5795.19) at 5776.75. This level prompts investors to wait for further price action to determine their position.
RSI regained momentum, and MFI remained flat. Combining these indicator readings, the index is strong and resilient. MACD is also recovering after an attempt to end its bullish signal. Thus, the outlook for NGXCSMG is promising.
NGXIND: Industrial Sector Index
The industrial sector slightly surpassed its all-time high (8811.46), closing at 8847.09. The index’s overall weekly performance reflects the market’s sturdiness. Evidently, the index should pull back properly before another bull surge.
Due to distribution expectations, the bullish volume wasn’t strong. However, MFI and RSI remained solid just above their thresholds. Then, MACD sustained its bullish signal. With these sentiments, investors can maintain their position as the bullish sentiment remained concrete.
NGXOGSE: Oil and Gas Sector Index
Whenever bullish or bearish sentiment follows an indecisive candlestick, the probability that the market will continue in that direction is high. The index broke two resistance levels last week following the easing of global tensions. NGXOGSE remained above its moving average in the second-stage recovery phase.
MFI and RSI readings indicate a strong index. Their readings also reflected the index’s sustained positive sentiment. MACD remained bullish despite losing its sentiment strength. Overall, the index continues to recover.
NGXINS: Insurance Sector Index
The insurance sector’s chart pattern formed an “M,” indicating a double-top chart pattern. This weekly chart reflects the strong bearish sentiment on the lower timeframes. The index price closed on its strong support level (1187.10). At this level, the index should experience a strong bull sentiment.
According to MFI, liquidity stayed sustainable. However, momentum remained low, consistent with the bearish signal. Something interesting to notice is the weekly fall in bearish volume. This action suggests bullish sentiment is on the horizon.
Final Thought
The NGXASI performance is encouraging. It also reflects the benefits of government policies on the macro level. The banking, consumer goods and oil sectors finished with strong bullish sentiment. This performance helps investors know which sector is favourable for investment. The industrial sector remains in its distribution phase despite bullish sentiment. Finally, the insurance sector could start a bull rally next week.
