Technical Analysis Review: Nigerian Stock Market All Share Index WoW

For the seventh consecutive days the Nigerian Stock Market continue to trend higher with the week ended 18th January 2019 saw the All Share Index and Market Capitalization appreciated by 3.94% to close at 31,005.17 and N11.562 trillion respectively. The Year to date figure now stands at negative 1.35%.

Turnover analysis showed a advanced in traded volume compared to previous week’s traded activities. In the week 1.270 billion units of shares exchange hands among investor valued at N13.463 billion in 16,476 deals as against previous week’s 1.265 billion shares valued at N14.074 billion in 19,278 deals.

However, all other indices finished higher with the exception of the NSE Banking Index which declined by 1.04%.

Thirty-eight (38) equities appreciated in price during the week, higher than twenty-two (22) in the previous week. Twenty-nine (29) equities depreciated in price, lower than forty-four (44) equities of the previous week, while one hundred and two (102) equities remained unchanged higher than hundred and three (103) equities recorded in the preceding week. Market breadth showed a positive sentiment 1.31x

The index is trading close to critical support level 31,005.17

The upside rally was largely due to appreciation in bluechip stocks listed on the NSE, stock such as Nestle, Dangote Cement, NEM saw significant rally in the week.

Source: Amibroker NSEASI Weekly Chart

From a technical analysis perspective, looking at the broad index (NSEASI) on the weekly timeframe, the index is trending within a downward sloping channel trendline. The week rally has seen the price action eye the minor resistance of 31,187.88/32,065.99 while also continuously trading below clusters of Moving Averages (chart below) and downward sloping trendline.

Momentum indicators also showed sloping downward movements.

Volume momentum continues to slide, this shows lack of strength in the rally

Source: Amibroker NSEASI Weekly chart

Expectation:

In our opinion the short term bias is neutral, medium term is negative and long term is neutral. We expect the index to trade in a consolidated range of 30,000 – 32,265 levels, a breakout in either level would define the trend.

We recommend a stand aside to investors aside

About Adeshina Adetunji 14 Articles
Adeshina Adetunji, CFTe MSTA(UK) Managing Partner/Head Coach,Tredonomics Partners Limited. He is President, Traders, Investors & Analysts (TIA) MEETUP. Adeshina is a Certified Financial Technical Analysts (CFTe)

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