NSE All-Share Weekly Digest and Trade Ideas for 7/12/2020
The NSE All-Share Index and Market Capitalization appreciated by 0.72% and 0.75% to close the week at 35,137.99 and N18.365 trillion respectively.
However, all other indices finished lower with the exception of NSE Main Board, NSE Insurance, NSE ASeM and NSE Oil/Gas which appreciated by 2.61%, 1.56%, 0.19% and 1.71%.
Twenty-two (22) equities appreciated in price during the week, lower than twenty-seven (27) equities in the previous week. Forty-five (45) equities depreciated in price, higher than forty-three (43) equities in the previous week, while ninety-four (94) equities remained unchanged, higher than ninety-one (91) recorded in the previous week. (Source: NSE Weekly Report)
Analysis and Trend Forecast
In 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 latest GDP numbers wasn’t strong enough to put the market in a bearish mode (still above the 23.6% Fib retracement level and rising 20-day moving average).
The index has since appreciated close to that key level, now at 35, 137.99 (from 34,885 basis point) but here is the signal that caught my attention: the market started on a negative note in the early hours of trading on Friday but quickly paired all its losses to close in the positive territory with a bullish pin bar formation at exactly its 20-day moving average.
Technically, a bullish pin bar on a candlestick chart is an indication of emerging buying interest especially when the market is down from a recent swing high.
So, I think we may witness a fresh influx of buyers who’d likely put pressure on the 35,814 resistance – any breakout above this key level is a trade opportunity for me. But if the index falls to clear that path, then it may pull back significantly.
All the moving averages are rising up with 20-day above the 50-day and 50-day above the 200-day. This is a reflection of positive sentiments in the stock market.
The NSE index still has 40,000 basis point to contend with before a sharp month on month reversal, besides, the CBN, in its monetary policy meeting held last week, has vowed to boost the stock market bu continuing its policy of lowering interest rate (Source: Nairametrics)
A lot of stocks have been beaten down on profit taking and I think the sellers will loose the market to buyers next week.
For instance, Zenith bank stock is down from its year high of N28.08 to N23.9, you may consider buying and averaging down from this level. This is a bank that stands out among its peers.
GTB is also on the same path – down from N37 to N33.35 which also doubles as support region (which was once a resistance before breaking out.
I am still adding to the units I own on Flourmill and Nascon as I considered these stocks a good buy in the consumer sector.
Kindly do you due diligence and buy only fundamentally sound stocks.