INVESTDATA WEEKLY STOCK PICKS

The Nigeria stock market rallied by 5.12 percent over a period of three monthsafter the election victory of Muhammadu Buhari’s APC Government, from the opening figure of 31,753.15 in the second quarter of the year to 33,381.45 in late-June this year, as the composite index of the market shatters the 50 days moving average as shown in the chart below.  The NSE Composite index has fallen hard over the last 58 trading days below its short and the medium moving averages of 20, 50 and 100 days due to traders and investors selling off their positions as a result of government’s delay and silence on its economic reform policy agenda to ameliorate the economy situation for growth and development as promised during its pre-election campaign. NSE All Share Index in the last five trading session has lost  338 basis points to close at 33,381.45 points from opening figure of 33,719.45 representing 1.00 percent decline and therefore bringing the market year to date negative position to 3.48 percent.

Composite NSE ASI

NSEASI closed above the lower band by 19.8 per cent. Bollinger Bands are 59.29 per cent narrower than normal. The narrow width of the bands suggests low volatility, when compared to NSE ASI's normal range. Therefore, the probability of volatility increasing with a sharp movement in stock prices has increased for the near-term.The market break down of pennant formation is a sign of weakness, but reversal is imminent as the volume traded continues to thin out, due to the fact that the market is waiting to see the reform policies to be unveiled by the government and the gloomy mood of global financial market. The current mood of the market calls for the very short trading, using tops and bottoms as guide for positioning, given that the trend is below the 50 days moving average.

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STOCKS TO TRADE

ZENITH INTERNATIONAL BANK PLC (ZENITH BANK)

This is a financial institution that is leading in profitability for two straight years with strong capital base and healthy risk management strategy. It ranks among the top 500 banks in the world and top two in the industry. Its strong commercial banking with aggressive marketing and customer service delivery in investment banking, corporate banking and retail banking products that are driving the impressive numbers being posted. Regardless of all the factors militating against the banking sector, the bank's earnings are robust to support its share price for upside. 

Company Figures                                 

Share Data	Ratio Analysis
Market Cap: N612.30 Billion	Net Assets per share:N16.77
Net Assets: N526.43 Billion	Price/Book Value:  1.18
Shares Outstanding: 31.40 Billion	ROE: 5.26%
Current Price: N19.90	Div Yield: 8.75%
52-Weeks High/Low N25.80/N14.54	Q1 EPS: 0.88
Year High/Low N25.48/N14.54	Q1- PE ratio: 5.64

Source NSE,Coy & InvestData Research                                 

ZENITH BANK Chart.

The chart above reveals that the stock had form bullish channel with strong support level at N16.49 and N19.20 respectively. The recent pullback is an opportunity to position alongside with smart money that were accumulating at that price range. Indicators like money flow, RSI, Bollinger band, MACD and candle stick confirmed reversal at the current market price.  As we expect the retracement to be sustained at the first resistance level of N20.98, which would give a return of 5.42 per cent. The second target is at resistance level of N22.25, which would give a return of 11.81 per cent, and the third target is at resistance level of N22.85, which is expected return of 14.82 percent. The last short trade target is at resistance level of N23.90, which would give a return of 20.10 percent. Any further break down below the support level at N18.75 and a stop loss of N1.15 calls for exit so that your capital can be preserved.  The upside potential of this stock is huge especially now that CRR has been review downward and the market expects economic policy statement from the government to give direction. Alongside the expected Q2 financials of the bank.

AFRICA PRUDENTIAL REGISTRAR PLC (AFRIPRUD)

Africa Prudential Registrars Plc is a potent business unit which successfully weathered the inclement financial environment of the past, while still waxing strong and being in contention for the leading Registrar firm in Nigeria.   The company has demonstrated strength in keeping share registration data for companies and since it got listed on the floor of Nigeria Stock Exchange. It has consistentlyposted strong earnings that hav supported dividend payout. Its earnings and assets are robust to support its share price going forward as the company free cash flow support operations due to the nature of its service products. 

Company Figures                                                     

Share Data	Ratio Analysis
Market Cap: N5.48 Billion	Net Assets per share:N2.45
Net Assets: N4.90 Billion	Price/Book Value:  1.16
Shares Outstanding: 2 Billion	ROE: 7.62%
Current Price: N2.82	Div. Yield: 12.77 %
52-Weeks High/Low N3.57/N2.30	Q1 EPS: 0.19
Year High/Low N3.57/N2.30	Current PE ratio: 3.61

Source NSE,Coy & InvestData Research                                 

AFRIPRUD CHART

The chart above reveals that the stock has been trending up for more than three months, before a pullback that recently formed a continuation symmetrical triangle pattern with bullish channel which has reversed at the support level N2.74 to usher in a new rally.  This reversal have been confirmed by the following indicators CCI, Chaikin Money flow and RSIsignals. The current value of RSI 43.35. As the stock retraces toward the first resistance price of N2.90, which would give a return of 3.30 per cent. The second resistance level will be at N3.00, which would give a return of 6.76 per cent.  The third target which is the resistance level at N3.10 with expected return of 10.32 per cent. The last resistance level which is at N3.45 is expected to give return of 22.77 percent, if the expected Q2 financials beat market expectation. 
Any breakdown below the support level at N2.60 and a stop loss of 21kobo which is anything not below N2.60 prompts exit so that your capital can be protected.

ACCESS BANK PLC (ACCESS)
This is a one shop financial institution that is into commercial banking, investment banking and securities trading with strong corporate, retail and investment banking products that are driving the impressive numbers being posted. Regardless of all the factors militating against the banking sector, its earnings are robust to support its share price for upside potential and with expected interim dividend in the nearest future. The bank share price has suffered as it trades at discount with high margin of safety.

Company Figures                                 

Share Data	Ratio Analysis
Market Cap: N139.57Billion	Net Assets per share:N12.81
Net Assets: N293.21 Billion	Price/Book Value:  0.47
Shares Outstanding: 22.88 Billion	ROE: 15%
Current Price: N6.10	Div Yield:10.00%
52-Weeks High/Low N10.18/N4.50	Q1 EPS: 0.60
Year High/Low N7.02/N4.50	PE ratio: 2.54

Source NSE,Coy & InvestData Research                                 

ACCESS BANK Chart

Looking at the chart you can see that the stock has been trending up for a period of six months making higher highs with up and down movement to recently form a continuation symmetrical triangle pattern with multiple bottoms at the blue line support line. The stock had a major pullback after adjustment for dividend and down to the support price at N5.99. And since then, it has been side trending with strong pattern of accumulation waiting for a major mark-up. The stock is at the point of breakdown or upward reversal at the current price.  RSI is below 50 currently at 46 level. The technical aspects of the chart are still compelling. As we expect the stock to retrace at this point due to Q2 report expectation, to the first resistance level at 6.29, which would give a return of 3.11 percent. The 2nd target is at resistance level of 6.50, which would give a return of 6.56 percent, and the third target which is atresistance level of 6.89 with expected return of 13 percent. The forth resistance level is at 7.33 which would return 20.16 percent.  As before, investors who purchase shares to hold could be well rewarded in the long term. Any further breakdown below the last support level at N5.60 and a stop loss of 50 kobo which is anything not below N5.60 calls for exitso that your capital can be protected from further losses. The upside potential of this stock is huge watch it.

OANDO PLC (OANDO)
Oando is the largest integrated energy solution in Africa and a holding company within its group. Its business is organised into six division operating in the downstream, mid-stream and upstream of its industry. Also carrying out business in marketing, supply & trading, terminal & logistic, gas & power, energy service and exploration & production.

The company's strategy to increase its presence in the mid-stream and upstream led to the acquisition of ConocoPhillips business in Nigeria to boost profitability level.

Company Figures                                 

Share Data	Ratio Analysis
Market Cap: N190.51 Billion	Net Assets per share:N17.89
Net Assets: N215.28 Billion	Price/Book Value:  0.88
Shares Outstanding: 12.03 Billion	ROE: 4.97%
Current Price: N15.83	Div Yield:6.32%
52-Weeks High/Low N36.89/N13.18	Q3 EPS: 1.17
Year High/Low N18.40/N12.83	Current PE ratio: 4.46

Source NSE, Coy & InvestData Research

OANDO Chart

Looking at the chart you can see that the stock came down gradually with the oil price before the major market correction that kept the stock southward movement to a support level of N12.83.But reversed in the last three months with up and down movement making higher highs with double bottom pattern at N15.85.  As the stock is still trading below its 50 days moving average and RSI value at 32.15. As we wait to confirm reversal, positioning at this point, if it retraces at the current price of N15.83, the first resistance level at N17.84 to give a return of 7.39 per cent. The second target resistance level at N18.20, which would give a return of 14.97 per cent and the third target is at resistance level of N19.96 with expected return of 26.08 per cent.  Any breakdown below the new support level and BLUE line to N13.95 and a stop loss of N1.88 which is anything not below N14.00gives exit signal Sto protect your capital from further loss.  The upside potential of this stock is high if assets can be put into proper use to generate income and reduce debt.  It may also take shorter period for it to recover if the company's earnings beat market expectation.