NSE All Share Index Outlook for December, 2017 - Technical Perspective

The NSE All-Share Index  and Market Capitalization appreciated by 1.55% and 1.58% to close the last trading week in November 2017 at 37,944.60 and N13.215 trillion respectively. While the month of November has a 3.45% appreciation in the index and YtD now stands at 41.19% in the green

Trend Analysis

Monthly Trend Analysis of the NSE ASI showed a gradual pick in bullish momentum as the index is currently trending towards key resistance of 38,248 while also trading above Simple Moving Average 100. The index is trading above the SMA 100 which indicates a bullish sentiment

Volume traded in the month was strongly up by 74% relative to previous month of October, 2017.  

Oscillator indicator –Stochastic RSI currently trading at 78/72 levels

Source: Amibroker -  Monthly Chart

Daily trend analysis

On the daily timeframe, the index is currently expanding upward as the Price action continues to trend higher.

Daily Chart

Why is December 2017 important:
For the past 4 Decembers (2013 - 2016) we witnessed the All Share Index appreciate despite the bearish sentiment seen in those years. Year 2017 s a remarkable one as we have thus far seen a bullish trend in the market with the index at 41% positive.

Technically, the 2017 bullish trend is lilekly to continue into the month of December. A strong rally upward is expected.

Our Expectations:

The Index is currently trading at critical technical resistance levels at 37,023.5 - 38,097.2. A break above the resistance level on weekly basis would see a steep rally toward 43,224.70 as such stocks from the Industrial, Consumer Goods and Banking Stocks would be viable for investors. On the other hand, a reversal in trend below support 34,633.5 would see a sell off by the investing community towards next support 31,024. 

The month of December 2017 would most likely see a bullish rally in stocks favored by fund managers. Stocks such as NB Plc, NESTLE, Dangote Sugar, GTB, Total Plc, Unilever, Cadbury would remain a toast for investors as technical indicators has signaled 

 

NSE Chart of the Day - Fidelity Share Price Pose for Potential Entry For Investors

Fidelity Plc

The market share price of Fidelity Plc which saw a renewed rally which started from N1.21k having continually find support at 61.8% Fibonacci retracement level of high of N1.48k and low of N0.75k to reach an high of N1.77k in the week ended 11/10/2017. 

Technically, the profit taking level for the renew rally was 127.2% Fibonacci extension at N1.68k, this was slightly breached but investor’s profit taking activities eventually brought price back below N1.68K. 

RSI 14 day period currently trades at 75 level (overbought) while volume trade in the last week 17^th November, 2017 declined (indicating lack of interest to accumulate)

In the last traded week ended 17^th November, 2017 saw investors sell Fidelity shares to close bearish below 127.2% Fibonacci extension level having N1.48k as support (resistance now turned support).

A renew bargaining interest is expected to be seen at N1.48K level. 

As long as price trades above SMA 100, the sentiment remains bullish for the stock.

Happy Trading

 

Chart of the Day - Gold to Resume Upside Rally

Gold

The precious metal for about 3 trading weeks was trading within the range of resistance $1290 and support $1266.62 per ounce. Political uncertainty in the US as a result of passage of the Tax bill in the Senate, North Korea tension (refusal to negotiate) contributed to the sharp decline in Dollar in the last trading day of the week 17^th November, 2018. 

The sharp decline in Dollar index saw Gold sharply rallied past resistance $1290 to reach a high of $1296.49 testing critical resistance. The precious metal ended the trading day slightly below the critical resistance $1296.49 to close at $1293.77.

Looking at the weekly chart below, Gold is currently trading within 61.8% and 50% Fibonacci retracement levels of high $1357.29 and low $1204.65

 

On a lower timeframe using 1hr chart, we see a throwback in the trend as price as retrace to test the moving averages fast and slow while the RSI 14 hour period also retraced from the overbought level to currently trade at 62 (still in the bullish zone)

 

Sentiment

Gold remain bullish with a more valid confirmation when price closes above $1296 critical resistance on the daily candle. A daily close above $1296 would likely see the precious metal rally towards $1305 resistance on the other hand; a rally below $1290 would see the Gold trend back into a range with $1266 as key support

Recommendation:

Long with stoploss at $1275 and Take Profit 1 @ 1305 (next resistance) and $1322 (intermediate resistance)