NSE All-Share Index Weekly Digest and Trade Ideas
In addition to the stock recommendations shared on this blog, you can now follow my weekly digest for up-to-date analysis of NSE All-Share Index, top market-moving news and how to better manage and grow your portfolio with some of my trade ideas.
The NSE All-Share Index and Market Capitalization depreciated by 2.57% to close the week at 34,136.82 and N17.838 trillion respectively. Of all the market indices, only the Insurance sector closed higher, by 0.51%.
Twenty-one (21) equities appreciated in price during the week, lower than sixty-nine (69) equities in the previous week. Fifty-five (55) equities depreciated in price, higher than twelve (12) equities in the previous week, while eighty-five (85) equities remained unchanged, higher than eighty (80) recorded in the previous week. (Source: NSE)
Analysis and Trend Forecast.
The index is in a correction stage right now and I anticipate an intense sell-off this week following the news of GDP contraction by 3.62% in Q3 2020.
A smart trader scans the market every week, then maps out key levels that could present trade opportunities in the market. For me, my eyes are focused on the minor support of 33,418 but don’t see the index holding up at that level. The next important support is the 20-day average basis point of 32,000 which also doubles as the 38.2% Fibonacci retracement. I expect the ASI to resume its bull run from that level but if it fails to halt the correction, that implies a deeper correction to the 61.8% Fibonacci level of 29, 462 basis point.
The overall market outlook is still positive as the NSE All-Share Index trades above the 20 and 50-day moving average. With the MACD level (blue) still rising above the signal line (amidst the emergence of early histogram bars in the positive region), I have no doubt that the bulls are still in charge.
What we are seeing now is a normal correction, only that it may be a little bit deeper as a result of the breaking news around GDP numbers yesterday.
To support my trend analysis, take a look at the relative strength index – now at 62.2 which is still below the overbought region. We consider an index reading above 70 to be overbought and as such advice traders to start taking profit or trim down their portfolio ahead of a major sell or beginning of a bearish run.
The 40,000 basis point remains a key short term resistance that may usher in the bear market.
While the market is expected to correct this week, I’d advise you wait for the All-Share Index to trade close to some of the key levels I mentioned before you consider buying your next stocks.
What do you think about the market index this week, share your comments and opinion?