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.
On a year to the date, the banking sector is the best performing sector index right now, up by 9.92%, followed by the industrial goods index (2.16%). Insurance is up by 1.83% while NSE Oil and Gas lags at 0.44%.
Thirty-four (34) equities appreciated in price during the week, lower than sixty (60) in the previous week. Thirty-eight (38) equities depreciated in price, higher than twenty-one (21) equities of the previous week, while ninety-six (96) equities remained unchanged higher than eighty-seven (87) equities recorded in the preceding week.
Foreign investors, who account for 50% of the market movers, are gradually hunting for cheap stocks with good fundamentals and this has no doubt supported the uptrend witnessed from 29,347 basis point to a high of 32,900 basis point before the market nosedived on election postponement. The market had since then traded below that short term level as investors price in political uncertainties amidst the general election.
Based on the chart above, the market is currently faced with 33,000 basis point resistance which could be broken or rejected depending on the outcome of the general election.
Please refer to my analysis on why you should keep your eye on the index closely, the assumptions shared still holds.
Stocks to Watch:
Here are our stocks to watch by virtue of their performance on a year to date and expected final result which we think may beat market expectations:
- Wema Bank (up by 33.33% to close at 84k)
- Sterlings Bank (up by 31.5% to close at N2.5)
- Union Bank (up by 23.2% to close at N6.9)
- Fidelity Bank (up by 21.67% to close at N2.47)
- FCMB (up by 17.4% to close at N2.22)