After touching a record high of 38,198.60 points corresponding to a YTD return of 41.9% on the 11th
August 2017, the Nigerian equities market benchmark index (NSE-ASI ) has witnessed 3 straight
days of a bearish trend this week. 
Accordingly, the NSEASI is down 2.7 percent w/w while YTD return has pared to 35.1 percent. The question on most investors mind now is whether the present trend is momentary or not.
From a technical standpoint, the local bourse currently trades at a market 30 RSI of 66.3, within the
overbought threshold of 70. Meanwhile, after rallying above 38,000 points last week, the NSEASI
almost broke its 3-year resistant level, necessitating a short-term correction.
From a technical standpoint, the local bourse currently trades at a market 30 RSI of 66.3, within the
overbought threshold of 70. Meanwhile, after rallying above 38,000 points last week, the NSEASI
almost broke its 3-year resistant level, necessitating a short-term correction.
Yet, fundamental argument for further uptrend seems weak as a top name across the sectors within our coverage universe already trade ahead of our year-end targets.
Against this backdrop, we caution that returns may be capped going forward amid intertemporal profit-taking and bargain hunting by market participants. In the interim, the strength of sell pressure over buy pressure will guide the index lower in the absence of fundamental driver to stoke investors sentiment.
Against this backdrop, we caution that returns may be capped going forward amid intertemporal profit-taking and bargain hunting by market participants. In the interim, the strength of sell pressure over buy pressure will guide the index lower in the absence of fundamental driver to stoke investors sentiment.
Nevertheless, our medium-term outlook is upbeat on the back of improving economic data and strong FY-2017 earnings expectation.
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