Positive, Bullish Sentiments May Linger On Inflow Of Dividend News, Positive Momentum

Market Update for the Week Ended March 4 and Outlook for Mar 7-11

Trading activities on the Nigerian Exchange last week was mixed on panic selloffs and profit-taking, due to the ongoing volatility on the escalating hostilities between Russia and Ukraine which is today a source of serious concern for many investors across the globe. We, therefore, expect mixed sentiments to continue in the new week, as more companies announce their corporate actions, in the midst of profit-taking and buying interests, as market players react to 2021 financials and reposition their portfolios for safety ahead of electioneers activities being a  pre-election year.  

As the market enters the peak of earnings reporting season with expectations of dividend declaration, below are investing tips to guide you as income investors and earnings traders. Dividend investing is one of the most powerful strategies for superior returns, depending on your objective or goals. This strategy is beyond looking at dividend yields, as it focuses on the company’s earnings power, dividend growth, payout ratio, retained earnings, and shares outstanding. Also, there is a need to keep your gaze on economic data and fundamental news surrounding the sector or company.

Under any market condition, bull or bear, technical analysis has been proven to be effective in managing risk, so you must know how to read the candlestick to confirm the entry and exit of any trade position you are taking. On the strength of this, entry confirmation is necessary. Where and when to enter the market or trade.  Position size, stop-loss price, profit target, and when to exit a position.  The entry and exit confirmation are made easy, using these candlestick formation Reversal candlestick, Hammer candlestick, and Flanked Doji’s for a clue as to what price or index action might do next, because you want to catch the major or minor turning points on any chart and on any time frame, with your eyes on volume and value areas of the price action or trend.

The trading strategies that will help you to navigate this current market trend are below. Learn and understand how to use specific technical analysis tools, which Investdata Technical Tool Box will make it easier for you to understand and use effectively to enhance your trading results and bottom-line. Try and get it, if you have not made an order.

Understand price cycle, set-up, and price target levels in stocks and sectors to help you identify strategic entry and exit points for your trades, detect trend changes and move your money or capital into defensive stocks and sectors. Finally, it is a guide to following assets and money flows. By trailing the money, you become part of the new emerging trends and profit from any market condition.

Irrespective of the bear resurfacing during the week, the share prices of Seplat and FCMB, among others, hit new 52-week highs.

To navigate the New Year profitably, order for Investdata’s video on Technical Toolbox for Buy & Sell Decision Home Study Pack to enhance trading results and boost your bottom line. Also, to up your game in equity trading and investing, understanding the key to trading price and index actions will go a long way to make the difference in your trading results. Checkout the video materials below.

Movement Of NGXASI

The NGX All-Share index action had a pullback for the week, after starting on a bullish note for two trading sessions of Monday and Tuesday, before being short-lived at the midweek on panic selloffs that lasted till Friday to resist decline on a low traded volume to halt the previous week positive outing.

The week started on a positive note, gaining 0.12%, an extension of the previous Friday’s buying interest which persisted until Tuesday when the index rose by 0.21%. The trend was halted at the midweek when the market lost 0.24% on panic selling and profit-taking in all classes of stocks, this trend continued on Thursday and Friday after losing 0.14% and 0.06% respectively. This brought the week’s total loss to 0.13%, compared to the previous week’s gain of 0.40%.

In all, the composite index shed 59.81 basis points, closing the week at 47,268.61bps, after touching an intra-week low of 47,202.60 points, from its highs of 47,613.74bps. Recall that the week opened with the index at 47,328.42bps. During the week also, market capitalisation fell by N32bn, closing at N25.48tr, compared to the previous week’s N25.51tr, which also represented a 0.13% value loss. 

The week’s top gainers table was dominated by a mix of low, medium and high cap stocks, as demand for dividend-paying stocks continues in the face of panic trading, as players took advantage of the correction to buy into the better-than-expected numbers hit the market. There were also the impacts of sectorial fundamental news as the oil sector became the toast for investors as oil prices remained upbeat.  

We note that the NGX Index and price actions reveal selling sentiments, a situation that was reflected in major sectoral indexes that closed lower, due to losses recorded by NGX Group, CAP, Zenith Bank, GTCO, Access Bank, Lafarge Africa, and others that pushed the index higher.

Market breadth for the week turned negative on a low traded volume due to profit-taking, with the onset of corporate actions, leaving investors pleasantly surprised, even as the released numbers have so far given insights into what is expected in terms of dividends. This is likely to support the recovery in the short to long run, while investors increase their positions in the hope of higher dividend payouts and yields, as revealed by numbers and payout announced by directors of Zenith Bank, UBA, GTCO, Dangote Cement, just as fixed income market returns remain negative, despite the recently announced improvement in the inflation rate.

During the week, decliners outnumbered advancers in the ratio of 49:22 on selling sentiments, as revealed by the investor sentiment report showing a 16% ‘buy’ volume and 84% sell position. Money Flow Index inched up at 74.93bps from the previous week’s 68.24 points, an indication that funds enter the market despite closing down.  

Despite, the selling sentiment NGX’s index action remained strong and bullish technically on a daily and weekly chart, while momentum indicators were mixed, on a light traded volume, as the NGXASI still trades above the 47,000 points to test 47,613,74 basis points. The candlestick formation, at the end of the week, revealed seller are in charge at a time the release of more 2021 audited financials continues to give direction. The candlestick pattern indicates a possible reversal or continuation of the trend, depending on market forces in the new week. Meanwhile, market recovery is still strong. Also, all eyes are on fixed income market yields and oil prices to further support market fundamentals and attract liquidity to the equity space. The NGX at this point is creating new buying opportunities for dividend income investors.

Bearish Sectoral Indices

The sectorial performance indexes for the week were down, except for NGX Oil/Gas that closed higher by 10.61%, while the NGX Banking led the decliners after losing 2.71%, followed by Consumer, Industrial goods and Insurance with 1.71%, 0.67%, and 0.17% respectively  

Activities in volume and value terms were down as players traded 1.37bn shares worth N23.79bn, compared to the previous week’s 1.67.bn units valued at N19.48bn. This volume was driven by Financial Services, Conglomerates and ICT stocks, FCMB, Transcorp, Zenith Bank, Access Bank, and Courtville Business Solution.

Seplat Energy and Linkage Assurance were the best-performing stocks for the week, gaining 20.25% and 16% respectively, closing at N1034 and N0.68per share respectively on oil price rally and market sentiment. On the flip side, RT Briscoe and Learn Africa lost 32.98% and 24,14% respectively, at N0.63 and N1.98 per share, purely on selloffs and profit-taking.

Outlook for the week

We expect positive and bullish sentiments to continue in the new week, as more dividend announcements and audited earnings reports hit the market, in the midst of the positive momentum and profit booking, as investors and traders react to numbers and expected dividend declaration. We note that income investors continue buying into dividend-paying stocks,

Q2 Master Class Theme

Trading Opportunities in A Volatile Market & Defensive Sectors In A Pre-Election Year

Sub-Topics

A. The Power of Earnings in a Post Pandemic Shift & Political Uncertainty

B. Great & Tested Strategies For Trading In Unstable Market

C. Technical Tools As Timing Edge To Manage Volatility Risk & Identify Buy Opportunities

 Take way from this master class:

1. The volatile start to the year in financial markets is set to continue for this year and beyond 2023 election.

2. Economic recovery, high inflation, a post-pandemic repricing of equity, global trend and the Ukraine-Russia war have the potential to disrupt markets

3. How to navigate through this pre-election year environment and its challenges, as market volatility and sector rotation should present good opportunities for discerning traders and investors. 

4. Simple valuation process for stock picking that combines fundamental and technical analyses for your watchlist and stock picks.

5, How to use stop loss and other technical tools for effective risk management and capital protection.

6, Fundamentals news and earnings powers that support strong group and sectors for defense in an uncertain environment. 

7. Hot stocks to deliver 2-time inflation rate returns and gains in 91 days

Don’t miss this ultimate source of knowledge about the market, if you desire financial independence through profitable trading, investing and wealth building in this 2022 and beyond.

Date: April 2, 2022

Time: 9.am – 4pm

Venue: ZOOM

Fee: 50K

Discerning investors and traders know that highly volatile markets create exceptional opportunities, while novice and amateur traders can often have a different response to volatility, which leads to FEAR.

Fear is the root cause of so many costly trading behaviors…hesitation to pull the trigger, incorrect position sizing, chasing trend and, market wave as a result of lack of trading plan and objective. If you want to be on the list of successful investors and traders in Q1 2022, send STOCK to 08028164085, 08179547605 now.

Meanwhile, the home study packs on Comprehensive Stock Market trading course video, Stock Market Analysis Beyond Fundamental & Technical Analysis, 2022 Actionable Trading Plan and Opportunities in Q1,  INVEST 2022 Traders & Investors Summit materials and 10 Golden Stocks for 2022, Strategies and How to invest profitably in this Changing Market Dynamics/ Recession, Mastering Earnings Season For Profitable Investing and Trading in any market situation/ cycles, Life Beyond COVID 19 Investment Opportunities In The Stock Market are now available. To obtain your pack send ‘Yes’ or ‘Stock’ to 08028164085, 08179547605 now.

Ambrose Omordion

CRO|Investdata Consulting Ltd

info@investdata.com.ng

ambrose.o@investdataonline.com

ambroseconsultants@yahoo.com

Tel: 08028164085, 08179547605

Sign In

Register

Reset Password

Please enter your username or email address, you will receive a link to create a new password via email.