Nigerian Stock Exhcange: Technical Analysis Outlook

OVERVIEW:
The NSE All-Share Index and Market Capitalization appreciated by 1.85%  and 1.75% to close the week at 26,235.63 and N9.069 trillion respectively. 

Similarly, all other Indices finished higher during the week with the exception of the NSE Insurance and NSE Industrial Goods indices that depreciated by 0.09% and 1.04% respectively while the NSE ASeM Index closed flat. 

Market breath analyses review a strong positive sentiment as 43 equities gained with 16 stocks declined while 114 equities were unchanged in the trading week as compared to last week’s 38 gains, 25 declines and 114 stocks unchanged respectively, the breath indicators shows positive sentiment.

 

Trend Analysis

The bullish sentiment continues as the All Share Index closed bullish for the second concencutive week on strong volume.

From the technical perspective, the index closed above the demand trendline on 3th April, 2017 but failed to pickup in momentum and thus retests the trendline on 17^th April, 2017.

The trendline now acts as critical support level which results to a strong buying pressure.

Oscillator indicator, RSI 14day period curves from the bearish territory into the bullish zone of 52 level

Critical Support level 24,555 and resistance at 26,855 bps

Volume on a weekly basis continue to strengthen 

 

Daily trend analysis

Looking at the lower timeframe:   

·         The index trading broke above the downward trendline

·         Expanding upper Bollinger band

·         RSI 14 day period at the bullish zone

·         Trend in the upward channel trendline

·         Index currently eyeing resistance level 26,855 bps

 

Overall Sentiment:

Short term: Bullish
Medium term: Bullish
Long term: Neutral

Our Expectations:

We expect the index continue in the bullish momentum as sentiment remain strongly positive. We expected brief profit taking activities in equities as this would drive the index to correct to 26,000bps level.  Stocks from the banking and consumer goods could be taken advantage of as it is recommended to buy into the downward movement.