Market Update for February 26
Trading activities for the week comprising the dying days of the month of February and the first two days of March opened very volatile yet again Monday on the Nigerian Stock Exchange (NSE), with the day closing slightly green to consolidate the five trading sessions of seemingly weak bull charge on improving volume which signaled buying sentiment awaiting the release of more earnings reports that would give the market a definite direction- whether north or south.
So far, the numbers released remain mixed, even as they are yet to beat market expectations, apart from few of companies that grew their dividend payouts. It is important to note that this is why although all the early filer have proposed dividend for their shareholders, the market remains unimpressed and silent as the stimuli so far is no enough to warrant any significant push that it has been waiting for.
The day started out with marginal gap up at the opening, rallying in the mid-morning to key resistance, before forming a symmetrical triangle chart pattern that supports continuation or reversal of trend. At the point of reaching intraday highs of 42,671.04 by the midday, following which profit taking in mainly oil stocks and others that were just rebounding ensued among intraday traders.
The market is still trading above its 50-Day Moving Average and heading to cross over it 20-DMA which will confirm a strong recovery if it happened, especially as earnings reporting season kicked off in earnestly. The three-wave motive that ensued took the NSE Index to 42,671.04 basis points, which was 156.87 points better than the session lows. Only in the last minutes did a slight pullback happen to close marginally up at 42,579.48.
The changing pattern we mentioned an our earlier write ups is lingering as revealed by the market on Monday as it did not react to Africa Prudential’s numbers and 40 kobo dividend, for a company that grew earnings and dividend by 86% and 33% respectively. Meanwhile, the same market reacted almost immediately to United Capital’s dividend payout cut to 35 kobo, resulting in high volume movement by traders.
Market technicals for the day were mixed and weak, with buying pressure of 42% on low volume traded, while selling position stood at 58%. Volume index was 0.48 with money flow index at 33.43 point.
Meanwhile, the composite NSE All-Share index gained 8.59 points to close at 42,579.48 basis points, representing a marginal growth of 0.02% on low traded volume but higher than the previous day’s. Similarly, market capitalisation for the day was up by N3.08bn to close at N15.3tr, which also represented 0.02% value gain.
The recovery trend was sustained by value gain in Zenith Bank, Guaranty Trust Bank, International Breweries, PZ, UACN, NASCON and ETI that impacted positively on the NSE’s Year-To-Date returns, as it bounced to 11.34%, just with market capitalisation gain for the period at N1.68tr, representing 12.14% YTD growth.
The composite index and other sectorial indexes closed higher, except for the NSE Oil/Gas and NSE Industrial Goods that closed 2.25% and 0.17% lower respectively, while the NSE AseM remained flat. Market breadth was negative as decliners outnumbered advancers in the ratio of 26:21. Market activities in volume and value terms were mixed as volume was up by 24.78% to 384.86m shares from previous day’s 308.43m units while value declined by 14.50% to N5.47bn from previous day’s N6.4bn.
Transaction volume for the day was boosted by financial services, Industrial and conglomerate stocks like CCNN, Transcorp, FBNH, Access Bank and Fidelity Bank, which witnessed increased trading to top the activity chart.
Japual Oil and Unity Bank were the best performing stocks for the day by topping the advancers table with 9.52% and 9.40% gain to close at N0.46 and N1,63 respectively on market forces, while Courtville Business Solutions and Caverton emerged as worst performers after topping the decliners table, losing 6.25% and 5.00%% to close at N0.30 and N2.28 respectively, owing to the impact of the new pricing rule and profit taking.
With February coming to a close and ushering in the peak period of earnings reporting season, expect volatility and strong recovery moves to continue which will be driven by end of the month trading account balancing and more numbers that will hit the market. All eyes are however on dividend stocks and Q4 2017 GDP that will be release by NBS today.
Also, expect volatility and repositioning to continue, while profit taking will reduce on the strength of expected payout and earnings surprises.
However, we would like to reiterate that investors should not panic but go for equities with intrinsic value, especially during this season when dividend payment is ongoing.
We advise investors to allow numbers guide their decisions while repositioning for the year 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. A stock market is in cycles. You must know the cycle it, or particular stocks therein are to successfully manage your trading and investment risk. For stocks that should be on your shopping list to buy in these seasonal changes as the year unfolds, sign up to INVESTDATA BUY AND SELL signal setup by calling 08032055467.
Get your home study pack of the INVEST 2018 Traders & Investors Summit and ride with the current recovery on Nigeria’s stock market and economy, thereby ensuring that you invest and trade with knowledge. You can also access stocks analysed in the home study pack of the INVEST 2018 traders and the investors’ summit held on February 24, 2018, including the 15 stock-picks for 2018 are available now to guide your positioning as trading for the year.
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 set. Kindly call or send yes to 08032055467, 08028164086 or 08111811223.
Meanwhile, a big THANK YOU to facilitators and participants that made the Chart Summit over the weekend a huge success. The eyes of participants were opened to the three tents of technical analysis and how it can enhance traders income, as well as simple trading indicators and tools for successful traders were revealed. Charting of the NSE Index on short and long term direction movements were carried out to guide investors and traders using technical indicators to know the energy behind funds entering the market, or individual stocks and when such funds begin to exit.
Here are some of the great feedbacks from the just concluded Chart Summit:
I have not seen a more lucid, concise, organized & insightful trading and investing educational presentations than the chart summit. All the speakers opened my eyes to how to manage risk using TA, despite the fact that I have been playing the market for 21 years. Mr Ambrose thank you. Please keep this good work you are doing for Nigerians.
Ikechukuw Olisa, an investor
Ambrose and Tunde’s presentations were the simplest, clearest and best understood of the many that I have heard in my trading lifetime of nearly 25 years, please keep it up. Thanks for your time.
The Invest 2018 home study pack content was what attracted me to attend this chart summit today, it was so good that I just couldn’t stop watching. Today’s chart summit was the best class I have attended in over 10 years. It’s going to make a big difference in my trading.
Thanks Mike for opening my eyes to risk management and portfolio selection using Technical Analysis tools. Thanks to investdata for putting chart summit together for novice and advance traders. It was well presented and right to the point. Again thanks so much for the beautiful presentation. It’s superb.
Chart Summit on technical analysis for novice and advance traders home study pack will be available on Friday, March 2, 2018, for those who have booked for the USB, you can play it on your phone, TV and laptop. Those interested in the pack should send ‘Yes’ or call any of: 08032055467, 08028164086 or 08111811223.
CRO|Investdata Consulting Ltd
Tel: 08028164085, 0803205546