Afrinvest Stock Recommendation For The Week 251119

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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%) led losers.

    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

      Market 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, buyer’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.


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      • NB: Rate on N100M and above are negotiable and all rates are valid ONLY for fund received on/before 25th November 2019.

        

      Proshare Nigeria Pvt. Ltd.


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