Market Update Jan 30
Trading activities on the Nigeria Stock Exchange on Monday followed the trend of stock markets around the world to close lower, losing all it gained last week while continuing the up and down movement that has characterized trading since the beginning of the year.
This movement has been attributed to intermittent profit booking and dwindling confidence resulting from the negative macro-economic indices that has continued to deepen. The market dip today was largely driven by price depreciation of medium and large cap equities as players took profit.
At the close of trading, the benchmark index NSEASI shed 111.04 points to close at 26,217.18 points from an opening figure of 26,328.22 points, representing a 0.42% decline, on low volume of trades to reverse previous three trading sessions of bull-run.
Similarly, market capitalisation for the day dropped by N38.21 billion to close lower at N9.02 trillion from an opening value of N9.05 trillion representing 0.42% loss in value.
Buying volume of total transactions for the day was 18%, while selling position was 82% signal profit taking and smart money positioning in the market.
Decline in stock prices further deepened the NSEASI’s year-to-date negative position to 2.45%, while market capitalization adjusted down for the same period to a loss of N226.13billion.
Market breadth in the first trading day of the week turn weak and negative, as the number of decliners outpaced advancers in the ratio of 19:9 on a bearish mood.
Today’s volume and value traded were down by 35.50% and 65.48% respectively to 144 million shares worth N756 million from the previous trading session of 238 million shares valued at N2.19 billion.
Transactions in the financial service and conglomerates shares of Aiico, Transcorp, UBA, FBNH, and Fidelity Bank topped the activity chart as most traded equities by volume.
NSEASI and all sector indices were in red, except for the NSE Consumer Goods, NSE Oil/Gas and NSE Lotus that were up by 0.13 %, 1.16 % and 0.21% respectively.
DAILY TIME FRAME NSEASI
The NSEASI on a daily time frame continues its sideway trending within a falling channel and symmetrical triangle chart pattern that support the current trend as the index breaks down its strong support level of 26,328.45. The momentum and trending ability of the market on a daily time frame is weak as ADX is below 20.
The probability of the market remaining in this direction for the rest of the week is high as momentum is low. Once the doted trend line is broken it confirms a weaker market. The index is trading below its 20 and 50-Day moving average. Traders should watch out.
Analyst Opinion: Reversal is imminent as smart money take position. Skepticism and temporary pullbacks in stock trading can be a healthy way to sustain a long-term bull market.
Stocks To Buy
Aiico, FO, Zenith Bank, Presco, UBA, Fidelity, 7up and Total
