Weekly Technical Equity Outlook - 10th April, 2017

OVERVIEW:
The NSE All-Share Index and Market Capitalization appreciated by 0.92% to close the week at 25,746.52 and N8.909 trillion respectively. 

Similarly, all other Indices finished higher during the week with the exception of the NSE Banking index that depreciated by 0.20% while the ASeM Index closed flat.

Market breath analyses review a positive sentiment as 36 equities gained with 22 stocks declined while 119 equities were unchanged in the trading week as compared to last week’s 36 gains, 24 declines and 117 stocks unchanged respectively, the breath indicators shows positive sentiment.

 

Trend Analysis

Investor’s sentiment was mildly bullish during the past trading week, with relatively low accumulative stands from market players. The Nigerian Stock Exchange All Share Index in the weekly chart below showed that investors remain optimistic on the equities traded on the floor of the exchange.  

Technical levels indicates support at 24,521.80 while intermediate resistance at 26,243bps and key resistant zone at 27,161.20 – 26,874.30 bps

Trend indicator, Bollinger band system on the weekly timeframe showed that the index still trends within the bearish territory and eyeing EMA 20 (mid Bollinger band) at 25.807 bps.

Volume analysis was strongly weak compared to the previous week’s volume with more than 500m volume though it remain on the bid side.  

Daily trend analysis

• Looking at the lower timeframe:   
• The index trading broke above the downward trendline
• Index formed a doji at the upper Bollinger band  
• RSI 14 day period trading at 59
• Volume momentum remain relatively low

 

Overall Sentiment:

Short term: Bullish
Medium term:Bearish
Long term: Bearish

Our Expectations:

Last week’s bullish movement in the ASI index may be regarded as weak as volume did not correspond to the strong rally seen in the index. We can  refer to this as the activities of speculators taking advantage of dividend driven stocks as such we expect a profit taking activities in the coming session as the daily chart reflects a possible impending correction. We expect a correct to occur in blue chip stocks such as Mobil, Nestle, 7Up Bottling Company and some banking stocks giving room for possible accumulation at a relatively lower price.