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Afrinvest Stock Recommendation For The Week 230919

Stock PICKS	1191 VIEWS
Stock PICKS
1191 VIEWS

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Monday, September 23, 2019 / 12:07PM / By Afrinvest Research

Market Last Week (Our Observation)

Last week, the local bourse posted a bearish performance as the ASI lost 0.3% W-o-W to 27,698.69 point while YTD loss worsened to -11.9%. Similarly, investors lost N39.1bn as market capitalisation fell to N13.5tn.
Performance across sectors was bullish as 5 indices under our coverage gained W-o-W. The Insurance and Consumer Goods indices rose 4.8% and 2.2% W-o-W respectively. Similarly, the Banking and Oil & Gas indices gained 1.8% and 0.5% respectively. The Industrial Goods index also gained 4bps W-o-W. Conversely, the AFR-ICT index lost, down 7.6% W-o-W.
CORNERSTONE (+30.0%), LIVESTOCK (+28.2%) and STANBIC (+22.4%) led the top performing stocks for the week while CHAMPION (-11.5%), PORTLAND PAINTS (-9.7%) and NCR (-9.1%) led losers.

Market This Week (Our Expectations)

The Afrinvest Weekly Sentiment Indicator weakened to 3.6 points from 4.1 points recorded in the previous week.
This week, the bearish sentiment in the market is expected to continue as there are no major catalysts to boost investor confidence, although we note that there is room for bargain hunting.

Weekly Stock Watch for Technical Traders

Market Analysis... NSE ASI Posts Bearish Performance

The NSE All Share Index lost last week as it dipped 0.3% to print at 27,698.69 points. As has been the case recently, the Negative Directional Movement Index (-DMI) still outstrips the Positive Directional Movement Index (+DMI) and continues to display a super-strong ADX (Average Directional Movement Index), indicating the NSEASI's reluctance to rise to glory. In the coming week, we expect the index to continue to wander within the negative territory. But why are we pessimistic? All indicators strongly suggest there are no possible triggers to herald a rebound in the near term.

Our BUY Recommendation

A week ago, out of our 5 picks, 1 closed in the red - DANGCEM (-0.3%). Based on last week's observations, ZENITH (ADX: 29.16; MFI: 75.78; %B: 57.07) has strong prospects for fortune in the near term. This stock currently hovers around the oversold region with its +DMI bullying -DMI with >25 ADX value, signifying a strong trend. Attention! Attention! Attention! The Nigerian market is currently not for the timorous.

Our SELL Recommendation

Previous week's observations also suggest that NASCON (ADX: 43.53; MFI: 97.73; %B: 81.95), OKOMUOIL (ADX: 53.86; MFI: 95.92 %B: 80.69), INTRBREW (ADX: 41.59; MFI: 89.49; %B: 57.54) and CUSTODIAN (ADX: 26.56; MFI: 84.12; %B: 29.16) top our wish list for investors yearning lean pockets. As it stands, these stocks are tremendously heading for the deep with -DMIs outstripping +DMIs and stronger ADX values too (well above 25). Closest to the overbought region and with a strong ADX, NASCON emerges top potential loser.