Seasonality Trends Shape Trading On NGX Ahead Of Year-End Rally

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Nigeria’s stock market sustained its positive momentum and buying sentiment for the fifth consecutive week across different stock classes, whether low, medium, or large cap companies as portfolio rebalancing continued on the strength of the impressive corporate earnings that continues to support higher payout ahead of the full-year dividend season in Q1 2024.
The above-average traded volume in recent sessions is a sign of increased positioning in low priced stocks, a situation that has pushed the market to trade above the 71,000 mark, yet another new all-time high ahead of the year-end rally and trends for the composite NGX All-Share index.
In the last 25 years as revealed by historical data, the peak of seasonality on the NGX is December which is the period for Santa Claus rally and year-end window dressing. During the quarter of a century, the NGX closed positive for 17 years and down for 8 years. Following which is safe to expect that seasonal data or cycle can be used for trading with an 80% or more reliability. This is what Investdata Research has been using for over two decades, going all the way back to our days as Research Officer at Stockswatch.
The time to trade with seasonal cycles and trends is now, especially as market players digest and interpret the economic agenda and statement of intent delivered by Olayemi Cardoso, Governor of the CBN at the 58th edition of the annual Bankers’ Dinner in Lagos on Friday.
As investors sentiment, psychology and perception are represented by the charts, price actions or candlesticks.
Below are chart patterns to watch out for:

NGXASI Weekly Chart (Opening)

NGX OIL/GAS Weekly Chart