Based on a technical analysis of the All-Share Index of the Nigerian Exchange, chances are high that the index will cross the 80,000 mark in the coming days.
Through close observation of the different timeframes of the NGX All-Share Index’s chart, there are signs that the market’s bullish run will persist for the next few trading days.
An analysis of the 15-minute time frame of the NGX ASI chart shows a bullish run which is unlikely to retrace in the coming days. Despite a very short correction as observed in the circle, the retrace is only providing support for the continuation of the bullish run which is expected to be observed in the market.
The NGX will be bearish in the coming weeks
Outside the projected bullish run of the NGX in the coming days, there is a projected downward turn in the market within the coming weeks. Based on forming trend patterns, it is expected that there will be a retracement to provide support for a future bullish move.
Looking at the one-month timeframe of the NGX ASI chart, it is projected that the ASI may fall even below the 72,000 mark in the next three to four weeks. However, this is not a cause for alarm, as the move is only expected to provide support for the future bullish runs the market is expected to make in late Q1 2024.
Speaking to Adetola Freeman, the Regional Analyst, FBS Africa, he noted,
- “It is true that the ASI may hit the 80,000 mark in the coming days, however, underlying economic factors could cause a decline in the enthusiasm of investors, or pressure existing shareholders to sell off their holdings.”
- He added, “In my opinion, the fact that the current market outlook is extremely positive could be another cause for smart money investors to take a pause.”
Freeman’s comments were in tandem with the projection that the market could go bearish in the coming weeks. Based on the assessment of Nairametrics, while there is a present wave of “buy the hype” that caused the market to appreciate by 4.34% in 2024 alone, there is soon to be a wave of distress selling that may trigger a bearish run in the market.
- Adetola Freeman then noted, “This projected distress selling will give birth to a new batch of investments in the NGX.” Which we predict will be the new wave of bullish runs to occur later in the year.
What you should know
While the technical analysis of a market offers valuable insights into historical price patterns and trends, it does not guarantee future market movements. The interpretation of charts and indicators is subject to individual perspectives and market conditions, which may change unexpectedly.
Factors such as fundamental analysis (economic data, company performance) and sentimental analysis (investor psychology, market sentiment) significantly influence market behaviour and may override technical signals.
This is quite a good analysis but fundamental factors are likely to make some minor changes