Oge
The NSE All-Share Index and Market Capitalization appreciated by 2.19% to close the week at 34,885.51 and N18.228 trillion respectively.
Twenty-seven (27) equities appreciated in price during the week, higher than twenty-one (21) equities in the previous week. Forty-three (43) equities depreciated in price, lower than fifty-five (55) equities in the previous week, while ninety-one (91) equities remained unchanged,
higher than eighty-five (85) recorded in the previous week.
Analysis and Trend Forecast.
In line with my expectation (see last week digest), the market corrected at the beginning of the week but found support at the 33,418 basis point (the minor key level mentioned last week) after bargain hunters stepped in to take advantage of lower-priced equities.
This is actually a confirmation that the bull is in charge right now.
Ordinarily, such breaking news as the GDP contractions in a bear market is enough to take the index lower than the minor support.
With the NSE All-Share Index bouncing off the 23.6% Fibonacci level ( 34, 418 basis point), I think the market is on track to its 1-year high of 35,814 basis which may act as a resistance next week.
While the overall outlook is still bullish as more funds are expected in the coming months, I’d advise you wait for a breakout above the key resistance level highlighted on the chart before buying more stocks.
If the index clears this year-high, then we may witness another bull run that will take us to the January 2018 high of 40,000 basis point.
Trade Ideas
Amidst the rising inflation figure and another around of Naira devaluation to N390, I will put my searchlight on companies with inelastic products and at the same time generate a sizeable percentage of their revenue from export sales.
I recommended one of these stocks in October – see here – and I think it will benefit more from the current economic trend. Although the stock has reached my target price of N74 (up by 24% from N60.20), extended to N79 before correcting lower, you can still add to your watchlist after a healthy correction.
Which of the stocks are you buying this week? Share your comment and I’d be glad to share my feedback on your picks.
I cannot see any attractive stock now. I am thinking of selling Zenith Bank with 20% profit, and possibly buy later at a much lower price
Zenith may pull back to N21 if the price closes below the 20-day SMA.
I’m eyeing Flourmills, whats the best price to enter and do you have an idea of its Fair Value please? I’m targeting 3-6 months.
If you can buy Flourmill stock below N26, it’s a good bargain.. as long as the price is above N24, the bull is still in charge.
I’ m thinking of buying Sterling Bank @ 1.94. What’s your take on this.
Yes! Sterlings bank is a good buy at that price (N1.94), it’s one of the stocks that will outperform the NSE in 2-3 months.
What about Zenith bank?
I have Transcorp with over 30 percent profit.should I sell now or wait
[…] my previous NSE weekly digest for 30/11/2020, I anticipated a rally to 35, 814 resistance since the earlier week’s sell-off driven by […]