TRW DAILY FUNDAMENTAL AND TECHNICAL ANALYSIS OF THE NIGERIAN STOCK MARKET

TRW WEEKLY REPORT FOR OCTOBER 26, 2023

The NGXASI once again experienced a modest gain of 0.33% as it closed at 67,136.58 points, rising from its previous close of 66,915.41. From a technical perspective, the market has been in a consolidation mode for 8 weeks now. Whether it will break out or turn out to be a false indication will be determined by the MACD Histogram on a weekly timeframe, which currently shows a negative reading. Despite this, the support levels from October last year until now remain intact, particularly around the 30-week moving average. It is worth noting that the 30-week moving average often acts as a support level during sustained upward trends.

The observation that the NGXASI hasnt corrected down to the 30WMA abruptly and shot back up implies a steady and gradual movement, rather than a quick bounce.

There is still more potential for a corrective phase or “grinding” to occur before a substantial rally begins. This correction is perceived as a consolidation within the broader bull trend, not a full trend reversal.

Strategy for Investors and Traders: The approach to taking positions depends on the investment horizon. Long-term strategic investors might find this a suitable time to accumulate positions, considering the upward trend and potential for future growth. However, for short-term speculators or technical swing traders, waiting for more definitive signs of a market upturn might be a prudent approach before committing fully to the market.

Overall, the analysis provides a cautious yet optimistic outlook, suggesting that the market is still within a bullish trend but might undergo more consolidation before a significant rally. It advises different strategies for investors based on their investment horizons, recommending patience for traders waiting for clearer signals before taking aggressive positions.