TRADER WATCH

Year to date market performance and First Quarter Review.

In the last one year after the pronouncement of the incumbent president as the winner of the presidential election of 2015, the nation stock market had continued to nose-dive to formed a bearish channel to reflect the falling macro-economic indices of the economy as the nation external reserve continue to look southward, naira lost value as exchange rate hit all  high of  N420 per dollar before adjusting to N380 in the back market due to limited forex, low purchasing power of Nigerians as inflation and interest rate are looking northward reducing the propensity to save that will drive investment.  The market had remained under the upper line of the bearish channel which is the blue line standing as a strong resistance level all through the period of one year despite the seeming recovery recorded in the last two months of the first quarter which was attributed to the early earnings surprises that ushered the earnings season of 2016. 

 The Composite NSE All Share Index for the first quarter of the year lost 3,336.03 points to close the period at 25,306.22 from an opening figure of 28,642.25 points, after it had recovered to high of 26,020.40 representing 11.64 percent decline. The Market capitalization also drop by 11.68 percent from N9.85 trillion it opened the year to N8.70 trillion representing a value loss of N1.15 trillion.The year-to-date returns of the NSE's basic indicator is currently 10.95 per cent negative, just as market capitalisation for the same period has lost N1.08 trillion. Within the first quarter trading period the market had 33 bull sessions and 30 bear trading sessions to record a mixed performance of one month down market and two months up market. 

NSEASI Weekly Time Frame of YTD

NSEASI closed above the lower band by 44.7%.  During the past 10 bars, there have been 5 white candles and 5 black candles.  During the past 50 bars, there have been 20 white candles and 30 black candles for a net of 10 black candles. Currently MACD is bullish since it is trading above its signal line. It crossed above its signal line 4 period(s) ago.  Since the MACD crossed its moving average, NSEASI's price has decreased 1.21%, and has ranged from a high of 26,250.34 to a low of 24,181.51.RSI is currently reading 42.59. Other indicators MACD and CCI are signaling buy while Stochastic Oscillator is giving sell signal. As the market continue to trade below the blue line the bear remain in charge, suggesting that traders and investors should target stocks that are outperforming the market now due intrinsic value and other fundamentals in favour the stocks. The chart above also revealed that the market is trading below the short and long moving average like 20, 50 and 100 DMA.  This is also a signal of weak market with less external stimulus to trigger upmarket in the short term. 

NSEASI Quarterly Time Frame

The chart above has shown that the market have been trending down since the third quarter of 2014, the pre-election year as the major fund provider of the market, the foreign and institutional investors that had continue to pull their funds out the market due fear of the unknown before the election and after the election as a result of unclear economic policy to give direction, unstable monetary policy and fear of not getting their stack in Nigeria as exchange rate has remained volatile.

NSE Sectorial Indexes Trading Range Remains above 50 DMA Despite the weak Market

The charts below are thesectorial indices tradingrange of the NSE, representing sectors and industries for effective reading and analysing of the market's performance on sector by sector basis. As you can see, three of the ten sectoral indices are trading below the 50-day moving average, while othersare trading above the moving averages.  The sectors below 50DMA is NSE Insurance,NSE Banking and NSE Premium.  NSE 30, NSE 50, NSE Industrial and NSE Consumer are above the 50 DMA at the end of last Friday trading as revealed on the chart.  The more sectors trading below the 50-day moving average is an indication of down trend and weak market.  As most sectors have entered into its oversold region it’s expected that reversal is imminent with huge upside potential when it bounces back.

NSE BANKING INDEX

Banking index has gone back below its 50 days moving average after the earning season sentiment had trigger the positive momentum due to earnings surprises that emanated from the big five banks. The chart has shown that the banking index have been trading majorly below its 50 days MA over years due to its overregulation and influence of policies. 

NSE 30

NSE 30 is still trading above its 50 days MA, suggesting that the blue chips stocks that made up the index are strong but there is already a reversal in trend as the index is almost crossing down the 50 DMA as at the end of trading last Friday. It also signal that traders are exiting position

NSE 50

The 50 days moving average is forming a support level for NSE 50 as the index has signal immenint reversal as it touches the red line. Meaning that stocks that constitute the index are resisting further decline in price.  

NSE CONSUMER GOODS INDEX

The Consumer Goods index is still trading above its 50 days moving average as more of its earnings were just released recently and market players are interpreting the numbers especially to know whether to jump into the industry stocks.

NSE INDUSTRIAL INDEX

The industrial index is strongly trading above its 50 days Moving Average which by the same period in 2015 where above the 50DMA. It suggests that if you are there in the stocks that made up the sector you need to act fast and re-enter later depending on your investment goal.

NSE INSURANCE INDEX

Insurance index is trading far below its 50 days moving average as few earnings reports from companies that made up the sector were mixed as many are yet to release their scorecards, but forming a double bottom is a signal for reversal if only the expected numbers are impressive and investors are rewarded in relative to their par value prices.

NSE OIL/GAS

NSE Oil and Gas is slightly trading above it 50 days Moving Average as the prices of the major companies in that industry are relative stable due to small number of share issue.

NSE LOTUSISLM

NSE LOTUS is trading above its 50 days Moving Average with reversal above the red line, this is indication that stocks in the index are still galloping.

NSE PENSION

NSE Pension index is trading slightly below the 50-DMA

NSE PREMIUM INDEX

Premium Index is strongly trading above its 50 days moving average, as two out-off the three stocks that constitute index had rewarded investors handsomely.