Monday, November 25, 2019
/11:04 AM / By Afrinvest Research / Header Image Credit: Afrinvest
Market Last Week (Our Observation)
- Last week, the local bourse posted a positive
performance as the ASI rose 0.5% W-o-W to 26,991.42 points while YTD
return softened to -14.1%. However, investors lost N43.8bn as market
capitalisation fell to N13.0tn (due to de-listing of Dangflour).
- Performance across sectors was mixed as 3 of 6
indices under our coverage gained W-o-W. The Consumer Goods index rose
6.0% to lead gainers. Similarly, the Insurance index advanced by 0.5%
while the Oil & Gas index appreciated 2.2%. Conversely, the Banking
and AFR-ICT indices shed 0.9% and 1.7% respectively. Lastly, the
Industrial Goods index closed the week with a 2.2% loss.
- NEIMETH (+40.0%),
CORNERSTONE (+35.5%) and CHAMS (+33.3%)
led the top performing stocks for the week while LASACO (-20.7%),
ABCTRANS (-8.9%) and STERLING (-8.5%)
Market This Week (Our Expectations)
- The Afrinvest Weekly Sentiment Indicator weakened
to 2.6 points from 4.2 points recorded in the previous week.
- This week, we expect the bullish streak to
continue following renewed interest in the market. However, this sentiment
might be short-lived as economic catalyst remain absent.
Weekly Stock Watch for Technical Traders
Analysis... Local Bourse Sustains Gains
Last week, the local bourse closed on the green note, sustaining previous
week's gains as the NSE All-Share Index rose 0.5% W-o-W to settle at 26,991.42
points. However, the negative Directional Movement Index (-DMI) outperforms the
positive Directional Movement Index (+DMI) and maintained a strong ADX (Average
Directional Movement Index), indicating that the NSE-ASI's reluctance to rise to
prominence is still present. However, declines in the next trading week will
likely not be strong as investors are gradually taking positions in undervalued
stocks, implying a possibility that the NSE All-Share index would gradually
rebound into the positive region.
Our BUY Recommendation
Observations from last week revealed
that WAPCO (ADX: 48.93; MFI: 8.90; %B: 39.46), DANGCEM (ADX: 31.90; MFI: 31.09;
%B: 27.32), WEMABANK (ADX: 28.17; MFI: 38.37; %B: 64.19), CUTIX (ADX: 26.76;
MFI: 63.54; %B: 90.62) and WAPIC (ADX: 20.56; MFI: 70.22; %B: 69.52) 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 strong trend. However, buyerâ€™s discretion is advised!
Our SELL Recommendation
Our observation also suggests that
JBERGER (ADX: 36.11; MFI: 91.41; %B: 105.9), SEPLAT (ADX: 34.45; MFI: 90.11;
%B: NA), GUINESS (ADX: 45.43; MFI: 87.79; %B: 76.93), and CUSTODIAN (ADX:
32.36; MFI: 86.56; %B: 75.98) are the tickers most likely to record losses.
These stocks are on the downtrend with -DMI outstripping +DMI and strong ADX
values (>25). Our potential top loser, which is closest to the overbought
region with a high ADX is JBERGER.
- NB: Rate
on N100M and above are negotiable and all
rates are valid ONLY for fund received on/before 25th November 2019.
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