Market Update Jan 10

Trading activities on the floor of Nigerian Stock Exchange closed on a negative note Tuesday to reverse gains of the previous two days and reflect the pre earnings season market volatility that characterizes the first month of every Year, given that the market and the economic fundamentals remain unchanged at a time fiscal and monetary policies are yet to provide the needed direction that will drive the macroeconomic indices.
Bearing all of these in mind, investors should focus on value stocks to protect their capital in the course of the volatility that this up and down market movements is associated with.
The expected Q3 earnings reports for March yea- end accounts are underway as January remains the filing month for such companies. This also is therefore likely to give an insight of the 2016 last quarter corporate performance.
Meanwhile, the composite NSE All-Share index shed 233.98 points on Tuesday to close at 26,346.24 from the opening level of 26,580.22, representing a drop of 0.88% on increased volume of trades as stock prices were thinning due to profit taking by traders. This was just as market capitalisation, which opened at N9.15 trillion lost almost N80 billion to closed at N9.07 trillion.
Consequently, the NSE All Share Index Year-to-Date negative returns increase to 1.94%, just like market capitalisation also.
The day’s market breadth was negative and bearish, as the number of decliners outnumbered advancers in the ratio of 25:18 to reverse the bull transition on the floor of the exchange instantly. Volume of trades was up by 78.47% to 373 million shares, worth N1.33 billion as against the previous session’s 209 million units valued at N1.43 billion.
Transactions in the shares of OMOSAVEBK, FIDELITY BANK, FCMB, CUSTODYINS and DIAMOND BANK, topped the activity chart as most traded equities by volume.

All the sectorial indexes and the benchmark index were in the red, except for NSE ASem and NSE OIL/GAS that closed green.
At the end of day’s trading, UAC-Prop led the advancers table with 5% to close at N3.15 per share, while Cutix led the laggards’ table, sliding 9.52% loss to close at N1.71 each.
Outlook For The Today
We expect market volatility to continue until the major earnings season for 2016 audited financial reports kicks off expectedly from next month with filings by the known early fliers.
As the pullbacks creates opportunities to trade and invest, we emphasis the need for investors to target value stocks with high possibility of dividend payment.
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HOW TO TRADE IN THE CURRENT MARKET SITUATION
From a technical standpoint, the market’s mood is geared towards short-term. The trading strategy to employ for now and the coming months should be a short-term trading approach, clearly the Bollinger Band/support and resistant trading system should be used to determine our entry and exit in equities traded in the exchange.
Also we should concentrate on few volatile and liquid equities that have both short and long-term trending potentials, because we expect the market to continue its up and down movement due to short term players taking advantage of the low equity prices in the market to position and trade.
Expected Q3 Earnings Reports in the market.