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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:

From the chart above, the Index seems to be consolidating between 32,995 and 31,800. This is the second time Index is trending close to 31,800 support level (which was once a key resistance in 24/27th, Dec, 2018) before resuming another uptrend on 19th. Feb. 2018. Whatever happens at this level will give you a clue on how investors are pricing the political risk.

On Friday, the market closed at that same support level on a positive note, up by 0.34% which signifies a potential rebound to 32,900 as more final year results of blue chip companies are expected next week with investors hunting for more dividend stocks.

On the contrary, the Index is also at the mercy of foreign investors who react swiftly to brewing risk surrounding the law suit filed by the former Vice president and other related political news. A further sell-off on high volume may signal strong bearish sentiments with 31,800 support eventually broken.

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

Growth Investors are advised to trade cautiously at this point while Dividend seekers should take advantage of low price stocks.

Do you think the NSE All Index will round next week? Share your opinion.

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