Afrinvest Stock Recommendation For The Week 211019

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Monday, October 21, 2019 / 11:59 AM / By Afrinvest Research/ Header Image Credit: Afrinvest

 

Market Last Week (Our Observation)

  • Last week, the local bourse ended on a negative note after the ASI fell by 30bps W-o-W to 26,448.62 points while YTD loss worsened to 15.9%. Furthermore, investors lost N41.5bn as market capitalisation fell to N12.9tn.
  • Performance was mixed across sectors under our coverage W-o-W. The Insurance index was up 2.4% while the Consumer Goods index followed, up 0.1% W-o-W. Conversely, the Banking index lost 2.0% W-o-W while Industrial Goods and Oil & Gas indices lost 0.3% and 0.2% W-o-W respectively. Finally, the AFR-ICT closed flat.
  • FIDSON (+11.1%), CUSTODIAN (+9.7%) and LAWUNION (+6.8%) led the best performing stocks while CORNERSTONE (-17.9%), CUTIX (-12.7%) and PZ (-11.9%) led losers. 


Market This Week (Our Expectations)

  • The Afrinvest Weekly Sentiment Indicator strengthened to 2.9 points from 2.7 points recorded in the previous week.
  • This week, we expect the bearish momentum to continue although there are opportunities for bargain hunting in fundamentally sound stocks. 

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Weekly Stock Watch for Technical Traders
Market Analysis... Domestic Bourse Lingers in the Deep 
As indicators suggested, the NSE All-Share Index lost last week, shedding 0.3% to settle at 26448.62 points. Again, its negative Directional Movement Index (-DMI) surpasses the positive Directional Movement Index (+DMI) and continues to display a super-strong ADX (Average Directional Movement Index), indicating the NSE-ASI's unwillingness to rise to prominence. Next week, we expect the index to continue to ramble in the negative territory. Our pessimism is on the back of the absence of any indicator to suggest possible triggers for a rebound in the near term.

Our BUY Recommendation
Of our BUY stocks last week, one gained - FLOURMILLS (+2.4%) Yay!!
Based on last week's observations, WAPCO (ADX: 48.93 MFI: 0.99, %B: -0.67) OANDO (ADX: 26.34 MFI: 4.32; %B: 32.47), DANGCEM (ADX: 31.90; MFI: 12.40; %B: 33.25), CUTIX (ADX: 26.76 MFI: 14.63; %B: 6.53) and WEMABANK (ADX: 28.17; MFI: 19.84; %B: 30.40) have strong prospects for fortune in the near term. These tickers currently hover around the oversold region with their +DMI bullying -DMI with >25 ADX value, signifying a strong trend. However, buyer's discretion is advised!

Our SELL Recommendation
Last week's observations also suggest that NASCON (ADX: 36.41; MFI: 97.41; %B: 64.23), FBNH (ADX: 59.49; MFI: 73.35; %B: 45.36), TRANSCORP (ADX: 44.98; MFI: 63.40; %B: 76.10 and CADBURY (ADX: 42.91; MFI: 56.46; %B: 38.82) are the tickers on the bears' scale of preference. As it stands, these stocks are keen on heading south with -DMIs outstripping +DMIs and solid ADX values (>25). Closest to the overbought region and with a strong ADX, NASCON emerges top potential loser.

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  • NB: Rate on N100M and above are negotiable and all rates are valid ONLY for fund received on/before 21st October, 2019.


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