Will the NSE All Share Index Rebound Next Week?

The 2019 presidential election is over with the incumbent president emerging after polling 15.19 million votes to defeat Atiku Abubakar, his key opposition. The result has however been rejected by the opposition party citing violence in some areas and election malpractices.

Is this a sign of another political uncertainties? 

Investors have also reacted negatively to the uncertainties surrounding this development as the NSE All Share Index failed to break 33,000 basis point, rather went opposite direction to close the week at 31, 827.24 with the year to data return inching close to the negative territory, now at 1.92%.

Similarly, all other indices finished lower with the exception of the NSE Insurance and NSE Industrial Goods indices which rose by 3.01% and 0.93% respectively while the NSE ASeM index closed flat.

Let us analyse the NSE All Share Index Chart:

Continue reading Will the NSE All Share Index Rebound Next Week?

Will NSE Index Go Up or Down After Election? Here a Technical Analysis

The NSE Index has recorded impressive appreciation. On a year-to-date basis, the index is up by 3.45% as investors take positions on stocks believed to be undervalued ahead of year-end results.

As of this analysis, the market closed the session at 32,515.52 basis point, down by 0.16%. Interestingly, this is the last trading day before Nigerians decide on who leads the country in the next 4 years.

Let us first look at a weekly performance of the index.

The NSE All-Share Index and Market Capitalization depreciated by 0.61% to close the week at 32,515.52 and 12.126 trillion respectively. Similarly, all other indices finished lower with the exception of the NSE ASem, NSE Banking, NSE Insurance NSE-AFR Bank Value and NSE Oil/Gas indices which rose by 0.96%, 0.68%, 0.02%
0.95% and 0.13% respectively.

Continue reading Will NSE Index Go Up or Down After Election? Here a Technical Analysis

Why You Should Keep an Eye on NSE All Share Index Right Now

Investors seem to have ignored the political risk, shun the upcoming election and started hunting for cheap stocks ahead of the financial year-end result.

Last week, the NSE index closed on a positive note with the year to date return now on the green side. Even as I share this post, the market ended the trading session at 32,462 basis point, up by 2.14%, Year to date, the index is up by 3.28%

While this is in line with the stock market cycle, where gains are usually recorded in the first half of the year, it makes more sense to analyse the general market sentiments; a technical analysis that helps us ascertain the short term direction of the market.

Let us look at the NSE index direction on a weekly chart:

The market turned bearish in February 2018 as investors flee to safety on rising interest rate in the US, geopolitical tension between the US and Iran, brewing political uncertainties (battle between the two key parties )and trade wars between economic powers. While the first, second and fourth risk isn’t talked about like before, the third risk which seems to be the fundamental driver of the market direction.

Continue reading Why You Should Keep an Eye on NSE All Share Index Right Now

How I Trade US Stock Ahead of Earnings Releases

How To Trade The News and Earning Releases In US Stock Market – Learn The Best Strategy To Buy Foreign Stocks At Low and Sell At Higher Price for Profit

As of this writing, we had just wrapped up the 3rd quarter and are at beginning the final quarter of the year.

Any moment from now, listed companies in the US equities market will be expected to release their 3rd quarter reports so that investing public can take decisions as whether to hold the stock or sell.

Earnings seasons are characterized by market noise and high volatility due to investors’ reactions to several companies reports and announcements. While some listed stocks’ prices will experience massive sell-off on disappointing results, other stocks, with the impressive report will attract positive sentiments.

The third and most confusing are stocks that would go in the opposite directions; what I mean is you will see earnings beat expectations, instead of prices to follow the same trend, it will nose-dive as profit-taking volume outweighs bidders. In such, scenario, you need to quickly understand that investors have already priced in earnings expectations before the actual releases.

In the midst of this market noise, how do you cut through the needle, capture trading opportunities ahead of other traders and exit with a sizeable profit?

Here is how I am trading Apple stocks ahead of earnings release:


Screen for Stocks With Positive or Negative Sentiments

The sentiment of a stock is the culmination of past financial results, expectations and company-specific news. It shapes investors’ emotion around the stock and overall lead to buy or sell decisions.

When investors’ sentiment is positive, the affected stock’s price tends to increase which may be a result of the last earnings report or potential growth opportunities.

Below is the chart of Apple, a stock that has been enjoying positive sentiments and had just hit $1trillion market capitalizations.

How To Trade The News and Earning Releases

Look At Past Earnings & Analysis Forecast

Apple is expected to report its next quarterly earnings on November 1, 2018, past earnings had shown positive surprises with 11 analysts’ forecasting EPS for the next quarter at $2.77 against the reported EPS( for the same quarter last year) of $2.07.

With such positive sentiments, Apple is expected to trade higher before the earnings date as investor’s take position ahead of November announcement.

Best Entry and Exit Strategy

The overall stock trend is bullish as indicated by my favourite moving averages which I have already explained on analysis of MasterCard stock.

The best strategy to trade Apple stocks is to enter and exit before the earnings date.  Why should one close one’s trade before the announcement? we still can’t rule out of the fact that the market could turn sideways if Apple’s earnings come out below expectations; to be on a safer side and lower my trade risk, I’d rather exit the market and take profit.

The trade idea is to take advantage of the positive sentiment driving the stock by waiting for a dip, on profit-taking, to the 50-day SMA support region, buy on the resumption of the uptrend and sell at a higher price per share.

On the chart shared earlier, notice how price had bounced off the 50-day SMA (the 3 big circled regions) thrice before moving up to a new level in the last 2 months.

This strategy to trading stocks ahead of earnings releases had been very profitable, at least, I made money on MasterCard, Visa Card and Amazon’s last earnings expectations using this method.

How To Trade Netflix Stock Ahead Of Q3 Earnings

Netflix Stock – US Stocks Trading Analysis and Setups – Learn How I Trade US Stock Market Online From Nigeria via CFD Stock Brokers.

As of this writing, Netflix shares is currently selling for $367.67. On YTD, the stock up by 82.73% so far, a performance that is not unconnected to the media company’s market penetration strategy and increasing global acceptance outside the US.

In the most recent quarter, the company reported an EPS of $0.85 (27th, July 2018) which is $0.05 above analysts’ expectations hence a surprise of 6.25%. But, the stock witnessed a massive sell-off as Netflix’s declining subscribers base came out at 5 million against an estimated 6 million users, which resulted in a 26% drop in market capitalization.


What next as we look forward to the company’s quarterly report?

Netflix, Inc. is expected* to report earnings on 10/16/2018 after market close. The report will be for the fiscal Quarter ending Sep 2018. According to Zacks Investment Research, based on 14 analysts’ forecasts, the consensus EPS forecast for the quarter is $0.68. The reported EPS for the same quarter last year was $0.29.

As investors price in the possibility of a better than expected earnings spurred by a growing subscriber base outside the US and investment in premium contents. Netflix shares have regained strength from the low of $310 to its market price of $367, 18% appreciation.

A closer look at the stock price in the last 3 weeks of trading, $375 seems to be a very strong resistance (the red circle region marked with A) to breakthrough before it retests the pre-earnings stock price of $420.

netflix stock - us stocks trading

Using sentiment analysis, Netflix is clearly bullish on short-term with price sitting above its 50-day SMA of $352. Investors expectations are high (rumour) with the RSI at 55.  All these indicate a potential breakout, hence, I bought at $366 with a target profit of $400 and stop loss of $347.  Since the 50-SMA is now acting as a support, it’s wise to set my stop loss below the average so that we can ride the volatility which, on average, is $13.

Update:

I had to close my trade for a paltry 3% profit after investors shun the global stock market for the US-Bond.

Rapidly rising Treasury yields (now at a 7-year high of 3.23%) are rocking equity markets around the globe, with high price-to-earnings tech stocks leading the decline,” said Yasuo Sakuma, chief investment officer at Libra Investments.

Netflix has since then suffered a sell-off from its recent month high of $385 to $361, the current share price as of this analysis. Although, it is still above my targeted exit price but I had to close the position to cut possible loss from general market sell-off.

While the media giant is expected to release its next earnings, we will be watching sentiments on the stock for possible re-entry.

Would you like to analyse US stocks like this, trade from your home/office and earn 5 – 20% return per trade? Click here for more details about my practical video training course.

How to Analyse Stock Market Trend: a Lesson from my Profit on MasterCard Stock

How to Predict Nigerian Stock Market Trend & Analyse Movement – Learn Stock Market Analysis, Know When to Buy and Sell Easily for Maximum Profit

Have you been in a situation where you bought a stock because it made the list of top gainers and on the next day the price suddenly fell to an extent that you were stuck; couldn’t sell at a loss again but rather decided to turn it to a long-term investment, even after months, you still couldn’t recover the loss suffered earlier but watched your stock sank more? Then, this guide is for you.

Your mistake was that you didn’t analyse the trend of the stock before buying or taking a position. The trend of a stock doesn’t have anything to with daily price fluctuation or else, you will keep checking the stock market table or market prices every day. When I buy stock based on my pre-determined setup, I try to avoid market noise; whether it’s up today or down tomorrow, I have always cut the noise and focus on my overall profit target.

As of this writing, my MasterCard stock just hit the profit target. I bought the US stock on the 16th, July 2018 at $205.5 and after 7 days, the stock touched $209. Did the price rise without a fall? No, at times it might even fall to $203; my account would be in a loss position but I wasn’t moved because I understood how to analyse a stock’s trend. My hope was intact and I said to myself, “as long as you did your homework well, have a trading plan, there is no need to panic”. Now, look at the result, I ended up in the green region.


What gave you confidence in this stock, you may ask? My simple response is, I understand the overall market trend. A stock trend is a very important factor to consider before taking a position. You could be lucky to go in the direction of the trend and cash out but you know what? You just played a gamble and won! Yes! you did. You could have entered another trade and lose your trading capital. So, isn’t smarter to understand a stock’s trend before opening a position?

What is a trend?

In the stock market, we say, a trend is a direction which could be up or down. When you see a stock closing higher on a daily, weekly or monthly basis, it’s an uptrend but if the market closes at a level that is lower than it’s previous closes, we say it’s trending down. This is a lay man’s definition of a trend and it’s not devoid of confusion.

Let’s say a stock add 50k to close at N1.5 on day 1 and shed 30k to close at N1.2 and added another N1 to close at N2.2. On the last trading day of the week, it lost, 75k to close the week at N1.25, do you say it’s bullish, bearish, bullish, bearish? This is a clear definition of confusion and imbalance, only a trader who is glued to his computer 24/7 will be bothered about this fluctuation. Recall my trading experience on MasterCard, the stock fell sharply after I opened a position and after 7 days of patient, it hit my target price.

More Details About a Trend

Understanding a stock’s trend increases your chance of trading in the market direction which ultimately makes more profit. When a stock is clearly in an uptrend, the best decision is to open a long position (buy), set a reasonable profit target and go engage yourself in other activities. You don’t have to stay glued to your system all day.

How to Analyse Stock Trend

To analyse a stock’s trend, I use a simple indicator called moving average. Moving average lets you measure the average price of a stock over a specified period so that you can gauge the overall trend of the market.

The most popular moving averages as of this writing is the 20 days, 50 days and 200 days moving average. The reason these three moving averages are popular is that they coincide with a month, quarter and a year respectively. Investors love to watch the performance of a stock within this period but the most popular and effective moving average is the 50 days.

Why 50-day moving average?

This moving average mimic the performance of a stock in a quarter which is the period listed firms are expected to release their interim report. It’s generally believed if the quarterly earnings beat analyst estimates and outperform previous quarter’s result, the 50 days moving average will rise, and the price tend to stay above it, which means that fund managers are clearly bullish on the stock.

The rule of thumbs on moving averages indicator are:

  • When the 20 day is above 50-day, and 50-day is above 200-day it is a short-term and long-term bullish trend.
  • When the 20 day is above 50-day and the 50-day is below 200-day, it is a short-term bullish and long-term bearish trend.
  • When the 20 day is below 50-day and 50-day is below 200-day, it is a short-term and long-term bearish trend.
  • When the 20 day is below 50-day and 50-day is above 200-day, it is a short-term bearish and long-term bullish trend.

This was the exact tool I explored to determine the overall trend of MasterCard stock before taking a position, I saw the bullish opportunity when the 20 sma was clearly above the 50 sma and 200 sma.

So, when you want to trade your next stock, don’t forget trend analysis, you will increase your chance of making money consistently in the stock market. The idea is to follow the trend or else you would be stopped out.

I hope this helps?

 

Why I Sold Some of My Nigerian Stocks and Bought More American Stocks

Trade American Stocks Online – Learn How I Buy & Sell Foreign Stocks With an International US Stock Brokers for Non-US Residents or Foreign Investors

Trading the stock market has always been my favourite way to make and multiply money easily and during my trading journey, I have come to understand that the stock market isn’t partial; it rewards those who, through diligence and well-planned strategy, understand the perfect time to open positions and exit their trade but burns gamblers seeking a quick return.

I had a discussion with one of my blog visitors on the way forward after he read my guide on the 3 low risk fixed deposit options that will likely outperform stocks in the next 6 months. His portfolio is down by close to 20%, no thanks to Dangote Cement stock and Zenith Bank, these are stocks he anticipated would deliver impressive results this year but aren’t so.

As of this writing, all eyes are currently on Ekiti State governorship election, a lot of local and foreign investors are following the recent happenings to understand and gauge the effect of the upcoming election in 2019. For me, I am cutting down my exposure to the Nigerian stock market, the possible risk of further fall is very imminent. Let’s analyse the chart using some of my favourite indicators, this will help us understand what the next 6 months would be:

Trade American Stocks Online

Using price action analysis on a weekly chart, the NSE all-share index broke the 50-day moving average which also doubled as a key support  and an old resistance level, the index pulled back for 2 weeks and kissed it goodbye: we have seen how the market had performed in the last 30 days with YTD performance now at -4.9%. This is a perfect reflection of the bearish sentiments which, fundamentally, isn’t unconnected to the factors earlier shared on this blog

Why are we bothered about the general market and not individual stocks, after all, there are some stocks with YTD return above 50%, you may ask? My dear, the truth is no matter how strong the fundamentals of a stock is, a larger percentage of share price move is still not disconnected to the investor’s sentiment on the economy. Take a look at Zenith bank, UBA stocks, despite their strong earnings and balance sheet size, they have barely delivered up to 10% return this year, why? the growth of bank stocks is tied to yield on fixed income securities as loan portfolio expansion is expected to be minimal.

I can go on to explain and give reasons I am not bullish on the NSE all-share index, at most 6 months from now but why did I opt for US stocks? To answer this question, I would like to share the chart of Dow 30, an index that tracks the performance of the top 30 most capitalised stocks in the US stock market.

While the NSE all share is set for another weekly fall, the Dow 30 index has just bounced from a key support level to the upside and as the 20-day sits above 50-day and 200-day moving averages, we can confidently say that the index is clearly bullish for stocks. As a smart stock market trader, I would rather be active in a market that is bullish, then allow my portfolio to lose value in a bearish market.

Another reason I would hold more US stocks to our local bourse is “availability of technical tools and data“, the US stock market is very open to international traders; you can access real-time market data on several financial platforms like Google Finance, Bloomberg, and MarketWatch from your personal PC while data on the Nigeria stock market trading is delayed, you can’t access the NSE trading terminal unless you are a premium subscriber or a registered stockbroker.

Lastly, the US stock market provides a larger pool of stocks to pick from. You have access to over 5,000 stocks, ETFs, mutual funds to invest in but I am only trading these selected stocks which are: Groupon, Apple, Cisco, Google, Amazon, Intel, Facebook, Microsoft, Tesla, Netflix, AT & T, Berkshire Hathaway, Bank of America, Boeing, Caterpillar, Chevron, Citigroup, Coca-Cola, Walt Disney, Exxon Mobil, General Electric, General Motors, Goldman Sach Group, Johnson & Johnson, JP Morgan Chase, McDonald, Pfizer, Procter & Gamble, Twitter, Alibaba, Visa, MasterCard, and SnapChat. These are the few stocks available on my broker’s platform for now but I still find these companies liquid, attractive and highly capitalized for new traders.

You don’t have to buy all the companies in the US stock market before you make money, just focus on few stocks with potential, master a trading strategy and trade your plan consistently, that is what successful stock market traders do, they trade like a sniper.

That’s all you should know about my decision to be more active in the US stocks.

Since I shared this content, I have received a lot of response from my blog subscribers on how they can get started trading US stocks and strategies to profit from short-term price moves in stocks like Facebook, Apple, Visa, MasterCard, Amazon, Groupon, Microsoft, etc. 

You can follow my latest weekly analysis of US stocks and see some of my trade setups here.

This group is strictly for traders who wish to trade local and US stocks. Click here to join the group now 

Warning: We will ban you from the group if you post an update that is not connected to the group.

How I Trade US Stocks

How To Trade US Stocks From Nigeria & Overseas – Learn How to Open a US Stockbrokerage Account, Pick Profitable Stocks As Non-Resident Citizen Living Abroad.

As a Nigerian who is looking for overseas investment opportunities in a market like the US, it is quite difficult to find an online broker that offers unrestricted access to the financial market. If you doubt, then you can spend some time to research all the regulated stockbrokers in the US, you will notice that one of the countries that are hardly accepted into their client record is Nigeria.  While I understand the regulatory reasons for such decline, and the need to ensure sanity in their global financial market, I still feel there are sincere local traders and investors to consider.

Why are foreigners/non-US resident showing increasing interest in US stocks despite the presence of the local stock exchange and online equities trading platforms in their respective countries? The US stock market remains the world’s largest and most liquid stock exchange in the world. Not only does it give you opportunities to trade fast-growing global brands, but also lets you diversify your portfolio into foreign-currency-denominated assets.  As an investor, you need to hedge your asset against currency risk by diversifying into foreign assets.

As of this update, the number of publicly listed US stocks representing major sectors is more than 7000, and that of foreign listed stocks in the market keeps increasing as they seek access foreign currency capital for expansion.

For us here in Nigeria, the market is a perfect alternative to trade stocks and diversify equity portfolio away from the Naira, especially now that the NSE index performance has shrunk from a peak of 45,000 points in February 2018 to a multi-year low of 24,000.

As of this writing, the NSE index has just returned to a negative path, posting -15% YTD on the back of higher than expected selling pressure. Besides, after the 2008 equity market crash, it seems retail investors do not have confidence in our local bourse again; most stocks in the banking, consumer, oil and gas, insurance and industrial sector are down from their highest price level; some stocks that traded as high as N100 – N150 are even selling for a paltry N5 to N10.

This bearish trend as pointed out in my post on how to pick stocks in a bearish market is very strong, the dollar against emerging market currencies is gaining momentum as the FED reserve increased US rate from 1.5% to 1.75%. Normal, foreign portfolio investors, who are looking for “carry trade opportunities”; buy currencies with increasing yield and sell currencies with falling yield.

Also, the political landscape isn’t clear again; no thanks to political insecurity. Even after impressive year-end results, fund managers are re-adjusting their portfolio to cushion the effect of political risk.

If you look at the NSE market outlook in near-term, it makes more sense to cut equity exposure as a short-term trader until the market regains its strength and diversify into the foreign stock market.

The best investing strategy for Nigeria investors:

Diversifying into the US stock market offers a perfect hedge against exchange rate risk arising the US dollar strength against the Naira. The US stock market lets you trade various asset classes beyond equities; metals, energy, and indices. Each of these asset classes tracks the performance of virtually all the segments of the US and world economy, for instance as the US dollar index continues to strengthen against emerging market currencies, there is a tradable ETF that tracks that movement, and as the Oil price increases on rising tension in the middle east, there is also an Oil ETF shares to trade, even the overall market indices, S & P, Dow 30 and Nasdaq have their ETFs too. Right now, everyone is talking about AI (artificial intelligence), and fintech, you can also leverage the stock market and tap into the multi-billion dollar opportunities in this emerging technology.

Another catch I love so much about US stocks is that there is no limit to their daily price movement, a stock can rise and fall by more than 100% depending on investors’ sentiment. Take a look at the snapshot of two stocks that gained 143.12% and 105.23% on a single day:

You won’t find such an opportunity in our local bourse as regulatory and allowable changes are capped at +/- 10% daily.

The summary of these is that you need to look beyond the local stock market by giving foreign stock trading a try, but not without having a proper understanding of strategies for picking stocks that will rise.

Click here to join my private Whatsapp group and learn how to diversify into foreign assets for massive growth.

I have also added US Equities Market to this blog so you can follow my weekly US stock analysis and trade setups.

Best Online StockBroker For Non-US Residents or Foreigners

Best Stockbroker for non-US residents, foreigners or international investors you can open a global stock trading account, pick profitable top gaining stocks on Nasdaq, AMEX and NYSE

If you are a non-US resident looking for tips on opening a low-cost stock brokerage account in the US so you can easily trade shares of listed companies from the comfort of your home, or office, this investing guide contains my experience and how I gained access to the world’s largest and most liquid stock exchange platform.

Yes! the US stock market remains the most attractive financial trading platform in the world; not only is it because it has the highest number of listed companies of any market size from different countries but also offers you the easiest route to tap into the numerous wealth creation opportunities in the US market; technology, healthcare, real estate, finance, construction, etc

When you gain access to the US stock market, you have an unlimited opportunity to trade the finest, fast-growing and most valuable companies in different stock exchanges like NYSE, AMEX, Nasdaq & OTCs.

During my search, I realised that the real challenge typical non-US residents or international investors face wasn’t the availability of US brokers but finding the regulated and trusted stockbrokers that accept retail investors with little capital. Some even, accept and reject applications from selected regions due to international regulatory policies.

My first encounter with a US stockbroker wasn’t even appealing: I met all their minimum account opening requirements but couldn’t move ahead because their initial deposit as t then was $500 ( at an exchange rate of N360, you need N180,000), by the time you factor additional commission on trade, miscellaneous fees, e-tax statement, and so on, I guess you properly would re-direct your search.

Update:  Sogotrade broker no longer accepts Nigerians.

Best Stockbroker for non-US residents, foreigners or international investors & basic requirements:

To summarize this guide, here are the basic requirements you need to make available before opening a US stock brokerage account as a non-US resident or international investor.

  • Government issues ID ( National ID, International Passport, Drivers’ License) for personal identification.
  • Utility bill (PHCN for almost 3 months ) or bank statement showing your physical address. The address on your document must correspond with the address to fill online.
  • Go to ChoiceTrade.com, my preferred and recommended regulated low-cost stockbroker for non-US retail investors.

ChoiceTrade is the leading stockbroking firm in the US, the platform offers the cheapest transactions fee compared to other US Stockbrokers like ETrade, TDAmeritrFidelityleity, and Schwab.

While other Stockbrokers require a minimum initial account funding of $2,000, $5,000 and $10,000, ChoiceTrade is pegged at $100.

Best stockbroker for non-US residents

Before you register on this platform, you need to cross-check your documents and make sure the information you provide during registration (personal profile, investment records, etc) corresponds with the details on the documents submitted. Any discrepancy may lead to termination of your account.

After filling the forms you will be required to scan and send your government ID and utility bill for review.  For registrations submitted during business days, you will receive a response on the status of your applications and if approved, a welcome email will be sent to you with your ChoiceTrade account number and login details.

How to fund your ChoiceTrade account:

ChoiceTrade offers various funding options but I recommend “bank wiring” via international transfers from your local bank: it’s faster and safer except that the rising cost of international transfers from certain countries.

The last time I wired fund from my local bank in Nigeria to ChoiceTrade, the total fund sent was $50 + the amount funded.

Here is a recent update on ChoiceTrade website:

IMPORTANT NOTE: In order to fund your account with a wire transfer, you must have a bank statement on file with ChoiceTrade from the bank and account where the wire transfer will originate. Your name and address on the bank statement must match the name and address on your Choicetrade account. Please do not initiate a wire transfer unless you have provided us with a correct bank statement. If the bank information does not match the wire transfer when it is received, your wire will be returned. No exceptions will be made to this requirement. 

To fund your account, submit these details to your bank:

WIRE INSTRUCTIONS:
Bank Name: BMO Harris Bank, N.A.
Bank Address: 111 West Monroe St., Chicago, IL, 60603
ABA # of Bank: 071-000-288
SWIFT (foreign only): HATRUS44
Beneficiary Name: Electronic Transaction Clearing, Inc. Settlement Account
Beneficiary Address: 660 Figueroa Street, Suite 1450, Los Angeles, CA, 90017
Beneficiary Account: 2459865
For Further Credit To: Your Name / Your ChoiceTrade Account Number (Beginning with “01”)
NOTE: You must include your ChoiceTrade Account Number on the wire document, or your wire will be returned.

That’s all for now!

Update, ChoiceTrade no longer accepts Nigerians, Click here for a guide on how I still trade US stocks for profit.