AFTER a healthy rally in the previous week, trading on the Nigerian Stock Exchange (NSE), Monday and Tuesday witnessed mixed sentiments and profit booking in manufacturing stocks amid renewed buying interest in Guaranty Trust Bank, Lafarge Africa, Cadbury, Vitafoam,

Equities market closed on a negative note yesterday as NSEASI depreciated by -0.07% to close at 41,051.63 basis points as against -0.23% depreciation recorded previously. Its Year-to-Date (YTD) returns currently stands at +1.94%.

Market breadth closed positive as Afromedia led 43 Gainers as against 21 Losers topped by Japaul Oil at the end of yesterday’s session – an improved performance when compared with the previous outlook.

Market turnover closes negative as volume moved down by -28.91% as against +10.79%uptick recorded in the previous session. Transcorp, Japaul Oil, and Zenith Bank were the most active to boost market turnover. BUA Cement and Zenith Bank topped the market value list.

NSLTECH leads the list of active stocks that recorded an impressive volume spike at the end of yesterday’s session.

The change in trading pattern and the holding structure has supported the market so far, despite profit-taking during the session as all eyes are on medium and low-priced dividend-paying stocks with high yields.

The analyst has always reminded all that market correction, or profit-taking is an integral part of stock market investing. As such, Monday’s pullback was not a surprise, even as the NSE index and price action of many stocks are still technically an overbought region.

Also, at the risk of sounding like a broken gong, we have often enjoined investors to trade with caution in this season, when earnings reports are expected to start pouring in anytime soon. That notwithstanding, the bulls are quite strong around the market arena, and the lead index looks good enough to stay further in the overbought region, despite the oscillating oil price as the nation’s external reserves rise further.

Nevertheless, given the trading pattern and sharp uptrend that brought the key performance index to this current level, we suggest that investors should take profit in positions they have given them over 20-30% so far.

 

 


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