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Afrinvest Stock Recommendation For The Week 091219

Stock PICKS	1138 VIEWS
Stock PICKS
1138 VIEWS

Monday, December 09, 2019 / 10:10 AM / by Afrinvest Research / Header Image Credit: Afrinvest

Market Last Week (Our Observations)

Last week, the domestic bourse ended on a bearish note following slight profit taking after four weeks of successive gains. Consequently, the All-Share Index shed 0.5% to close at 26,855.52 points while YTD return worsened to -14.6%. Similarly, investors lost N218.2bn as market capiltalisation depreciated to N13.0tn.
Sector performance was bearish as all indices under our coverage lost save the Consumer Goods index which gained 1.7% w/w. The Industrial Goods index lost the most while the Banking and Insurance indices also shed 1.2% and 0.9% respectively. Similarly, the AFR-ICT and Oil & Gas indices lost 0.9% and 0.4% respectively.
ROYALEX (+17.4%), UNILEVER (+17.4%) and NIGERINS (+10.0%) led gainers while CORNERSTONE (-20.3%), ARBICO (-9.8%) and IKEJAHOTEL (-9.7%) led losers.

Market This Week (Our Expectations)

The Afrinvest Weekly Sentiment Indicator weakened to 1.7 points from 2.4 points recorded in the previous week.
This week, we expect investors to cherry-pick stocks with sound fundamentals.

Proshare Nigeria Pvt. Ltd.

Weekly Stock Watch for Technical Traders

Market Analysis... Domestic Equities Market Halts Bullish Run

Last week, the local bourse closed on a negative note, bringing a halt to the four-week bullish trend as the NSE All-Share Index fell 0.5% W-o-W to close at 26,855.52 points. The negative Directional Movement Index (-DMI) outperforms the positive Directional Movement Index (+DMI) and maintained a strong ADX (Average Directional Movement Index), indicating a possibility that the NSE-ASI may continue to shed gains this week.

Our BUY Recommendation

Observations from last week revealed that WAPCO (ADX: 48.93; MFI: 0.00; %B: 24.15), NIGERIAN BREWERIES (ADX: 32.55; MFI: 10.90; %B: 61.93), OANDO (ADX: 26.34; MFI: 14.59; %B: 26.41), DANGCEM (ADX: 31.90; MFI: 30.84; %B: 22.79), CUTIX (ADX: 26.76; MFI: 55.66; %B: 78.28) all have prospects for gains this week. These tickers currently hover around the oversold region with their +DMI outperforming -DMI with >25 ADX values, indicating a strong trend. However, buyer's discretion is advised!

Our SELL Recommendation

Our observation also suggests that JBERGER (ADX: 36.11; MFI: 97.88; %B: 57.54), FLOURMILL (ADX: 44.61; MFI: 97.60; %B: 83.24), CUSTODIAN (ADX: 32.36; MFI: 93.69; %B: 57.54), and SEPLAT (ADX: 34.54; MFI: 86.21) are the tickers most likely to record losses. These stocks are on the downtrend with â€“DMI outstripping +DMI and strong ADX values (>25). Our potential top loser, which is closest to the overbought region with a high ADX is SEPLAT.

Proshare Nigeria Pvt. Ltd.