INVESTORS TAKE ADVANTAGE OF PULL-BACKS, POSITION FOR 2017 YEAR-END, 2018 EARNINGS SEASON

Market Update for December 21

Trading on the Nigeria Stock Exchange had an up-market on Thursday to consolidate mid-week reversal move on a strong volatile retracement to finish the session higher on a good and positive technicals that signaled traders taking position for end of the year rally after the market had pullback before now. With the increasing number of institutional and foreign players in the market ahead of full year earnings reporting season, the possibility for down market is slim due to change in market holding structure of less retail players that will be selling to meet personal needs for the new year. On this note January effect will be subject to market forces, as volatility continue in 2018 but let the numbers posted for third quarter guide your positioning for dividend income as higher payout is likely to come with 2017 full year earnings reports.

Trading started with a disappointing gap down and continued through the mid-morning to midday but retraced up in the afternoon, holding resistance and thereafter had a 5-wave advance move that kept the market in the rising channel near its first resistance level of 38,436.83. NSE All Share index intraday movement hit the highs of 38,350.64 from lows of 37,790.07 on a strong volume and positive market breadth.
The two trading sessions of 100% buying pressure revealed increasing demand for stocks as volume index stood at 0.87 of the day’s total transactions to continue the two-day bull run.

Meanwhile, at the end of trading, the composite index NSEASI gained 416.78 basis points at 38,350.64 from the opening 37,933.86 points, representing a 1.10% growth, just as market capitalisation went up by N148.38 billion to close at N13.65 trillion from an opening value of N13.50 trillion, representing also 1.10% value appreciation.
The sustained upturn was due to value gains recorded by medium and high cap stocks like ETI, Dangote Cement, Access Bank, UBA, Dangote Flour, Seplat and FBNH. This further impacted positively on the NSE’s year-to-date return, lifting it to 42.70%, just as YTD growth in market capitalisation stood at N4.4tr, representing a growth of 47.59% above the year’s opening value.
Market breadth for the day was positive as advancers outnumbered decliners in the ratio of 23:13 on a high traded volume that was higher than previous day’s level.

Activities in terms of volume and value were mixed as volume was up by 106.54% to 429.38 million share from the previous day 207.89 million units while value decline by 55.46% to N1.51 billion from previous day’ position of N3.39 billion. Transactions were driven by activities in Aiico, Transcorp, Fidelity Bank, FCMB and UBA topped the volume chart.
Berger Paints and Redstar Express were the top performing stocks for the day with gains of 4.94% and 4.92% respectively to close at N8.49 and N5.12 each on market forces. On the other hand, Dangote Sugar and Total Nigeria shed 5.75% and 4.78% to close at N19.34 and N219 respectively on profit taking.

TODAY’S OUTLOOK

Being the last trading of the week ahead of long holiday, expected volatility to continue as traders accumulate more value stocks that has high upside potentials despite profit taking as fund manager balance trade and account for the last quarter and year in order to meet target and earn their management fee. Add this to positive economic data that had continue to inspire confidence in the market and economy. The positive outlook for emerging markets in 2018 as a result of high commodity prices is a major attraction as currencies of these developing markets remain relatively stable.

All of these factors begin to make much more sense to investors when you add the undervalued nature of assets on these exchanges.
Again, we advise that investors allow numbers to 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 08032055467.

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 is out already.
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We in investdata wish all our esteemed clients, supporter, Resource Persons, Participants at our summits, one on one coaching class students and followers in the social media Happy Christmas and profitable new year. Also bring to your notice that closing down partially on Friday December 22, 2017 to resume second week of January. But our news and update continue on the site. For urgent attendance call 08111811223or 08028164085

Ambrose Omordion
CRO | Investdata Consulting Ltd
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