Volatility, Profit Taking, As Investors Reposition In Value Stocks Ahead Full-Year, Q3 Numbers

Market Update for February 5

Nigeria’s stock market on Monday had another volatile trading session to kick start the first full week of February negative.
The session started out with a little gap down at the opening, and pulled back to recent key support, forming a hanging man candlestick pattern that signaled reversal but on a low volume after the previous day’s up market, on a declining volume to indicate a weak rally.
As things are now, Investdata urges everyone- investors and traders to keenly observe Tuesday’s session to confirm direction before going short, especially against the backdrop of the correction mode of international stock markets that was long expected due to over valuation and weak earnings. This, we recall, had made many international fund managers increase their positions in emerging and frontier markets like Nigeria’s.
U.S. stocks took a deep plunge, the most in 6 1/2 years, with the Dow Jones Industrial Average shedding over 1,100 points, amidst fever pitch sell-offs over rising concern that inflation will force interest rates higher, just as the S&P 500 Index sank 4.1%, enough to wipe out its entire gains for January.
Investdata believes the ongoing correction or pullback in the Nigerian market may not last if the expected earnings reporting season beats expectation, regardless of relatively high prices of some equities now trading above their Book Values.
The mixed sentiments at the end of Monday’s trading may lead to a retest of the new 44,684.38 resistance level, or even to lower-lows, which is what the chart above reveals. If this short-lived Wave 5 extension and decline ensues, it will take the composite NSE All-Share index to the 41,000 or 42,000 mark, down from this session’s highs. Only the expected numbers and positive information from the fiscal (government), it economic managers and the monetary authorities (Central Bank of Nigeria) may bring about a quick rebound.
Market technicals for the first day of the week were negative and weak as reflected in the volume and breadth to close the day.
The effects of strong oil prices in the international markets and impressive numbers from manufacturing companies arising from the improvement in dispensable income in the country, among others have indeed helped the country’s oil and non-oil sectors, which received the highest share of bank credits in 2017Q4, according to data released by the National Bureau of Statistics (NBS)(READ). Although, one cannot under-estimate the effects of the CBN’s sustained intervention through the Investors and Exporters’ window of the foreign exchange inter-bank market since it opened in April 2017, helping to resolve bottle-necks around their ability to source the much needed raw-materials from abroad.
Meanwhile, the All-Share index shed 378.27 points to close at 44,261.72 basis points after opening at 44,639.99, representing a decline of 0.85% on a low traded volume that was lower than the previous day’s. Similarly, market capitalisation dropped by N135.75bn to close at N15.88tr, after opening at N16.02tr, which also represented 0.85% value depreciation.
The downturn in the market was due to value loss in medium and high cap stocks like Dangote Cement, Lafarge Africa, UBA, Forte Oil, Dangote Flour, FBNH, Access Bank and Julius Berger, which impacted negatively on the NSE’s Year-To-Date returns that fell to 15.74%, just as market capitalisation gain for the period reduced to N2.02tr, representing 16.95% YTD growth.
The general market performance index and other sectorial indexes closed south, except for the NSE Insurance that inched higher, while the NSE AseM remained flat.
Market breadth was negative as decliners outnumbered advancers in the ratio of 34:22, to halt the two-day up market.
Market activities in volume and value terms for the day were down by 20.25% and 23.27% respectively to 426.87m shares worth N2.77bn, from previous day’s 535.26m units valued at N3.61bn.
Transaction volume for the day was considerably boosted by conglomerates and financial services sector stocks like FCMB, Skye Bank, Diamond Bank, Transcorp and Aiico Insurance, which witness increased trading to top the activity chart as most traded.
The day’s best performing stocks were Aiico Insurance and Prestige Assurance, which topped the advancers’ table after gaining 10.00% and 8.33% to close at N0.88 and N0.52 respectively, on market forces. Unic Insurance and Consolidated Hallmark Insurance were the worst performing, shedding 8.70% and 8.33% to close at N0.42 and N0.44 each, on market forces.


Expect volatility, profit taking and portfolio reshuffling/repositioning to continue ahead of full year audited reports that will be in the market very soon, as revealed by the hanging man candlestick formation pattern as market close yesterday. But stay with value stocks as today trading confirm direction.

However, we would like to reiterate that investors should go for equities with intrinsic value, especially during this season that dividend payment is approaching.
We advise investors to allow numbers guide their decisions while repositioning for the rest of the year’s trading activities, especially now that stock prices remain volatile amidst improving company, economic and market fundamentals.
It is time to combine fundamentals and technical tools to take decision by knowing the support and resistant level to reposition or exit any position. Market is in phases know the cycles in order to manage your trading and investing risk. For stocks that should be on your shopping list to buy in this seasonality changes as the year winds down, sign up to INVESTDATA BUY AND SELL signal setup by calling 08028164085.
Get your home study pack on INVEST 2018 Traders & Investors Summit and ride with the current recovery on Nigeria’s stock market and economy. By investing and trading knowledgeable. You can also still access stocks analysed in the home study pack of the INVEST 2018 traders & investors summit, which includes 15 stocks picks for 2018 are available now to guide your positioning as trading for the year just started.
Comprehensive training materials on stock Trading and Investing for Financial Independence series are Available, you can play and watch on your mobile phone, laptop, desktop and TV. Kindly call or send yes to 08032055467, 08028164086 or 08111811223.

Chart Summit! Chart Summit!! Chart Summit!!!

Investdata Consulting Ltd is organizing another workshop where experts would simplify market jargons with the aim of increasing understanding and increasing the pool of retail investors.
Theme: ABC of Technical Analysis for the Novices and Advance Traders
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We have also, over time, focused attention on attuning the mindset of investors and traders to managing risk, while eliminating emotions when trading so as to avoid irrational investment decisions.
Attend the Practical Conference on Technical Analysis for the Novices and Advance Traders. We would be taking participants through:
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• Know what the smart money are doing
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The workshop is scheduled as follows:
DATE: February 24. 2018
TIME: 10am – 3.00pm
VENUE: Ostra Hall & Hotel, Behind MKO Abiola Gardens, Opposite NNPC Gas Plant, CBD, Alausa, Ikeja. Lagos.

What you will learn at the Technical Analysis Chart Conference
1. The 3 Simple trading secrets that can help anyone succeed at investing
2. The tenets of stock trading and investing Using TA
3. Trading and investing strategies that will help you manage your risk, protect your capital and profit from market oscillation.
4. How to trade on your own online.
5. The psychology of trading and investing and how it will make you successful.
Registration is ongoing
There will be sales of stock trading and investing materials at the end of the conference, Fundamental and Technical Analysis materials, including home study packs you can play and viewed on your phone, laptop and television set. All at 20% discount for attending. You need to prepare yourself and profit from the market and the recovery economy to truly achieve your financial independence and freedom in this New Year.
For more enquiries about the programme, please call 08032055467, 08179547605, and 08111811223.

Ambrose Omordion
CRO|Investdata Consulting Ltd
Tel: 08028164085, 08032055467