This week in the stock market, investors lost nearly N200 billion as the stock market closes with a decline of 1.52% to end the week on Friday at 21,861.78 index points, lower when compared to 2.35% loss recorded last week. This week makes it the 9th week of an un-impressive performance in the year 2020.
The week’s performance was as a result of the negative performance recorded on Monday and Wednesday which ended the market by -2.24% and -0.05% respectively. However, the highest gain was recorded on Friday with 0.48%.

Market in a Deep Red Zone

On a month-to-date (MTD) rate, the stock market has shed 16.61% of its index point, the highest to be recorded for a single month in the last 15 months which has already ended 11 trading sessions in red out of 20 sessions traded throughout the course of the month.
Similarly, the Nigerian equities market All-Share Index on a year-to-date (YTD) rate is in a deep red zone as the stock market year-to-date rate keeps adding up to its loses to yield -18.55%.

Down time for the Market

The average closing price of the All-share Index over the last 200-day ended on March 27th, 2020 is at 26,933.82. In the moving average chart shown below, the All-share Index is extremely farther away from both the 50-day and 200-day moving average. As long as the ASI remains below the 200-day moving average on the daily timeframe, the stock market is generally considered to be in downtrend.
The 50-day moving average shown on the daily chart reveals the ASI 50-day moving average has crossed over to the downside of the 200-day moving average acknowledging the fact that the stock market is still in dipping zone.

Market below its true value

The coronavirus outbreak continues to affect the performance of the stock market as demands are receding which in turn put the market currently below the oversold mark.
Losses are outpacing the performance gains of the stock market which is causing a decline in price leading the relative strength index (RSI) to decline. Since gains and losses will stabilize or even change direction, sooner or later, an RSI evaluation can aid in making the most profitable portfolio buying decisions.
On this week stock market All-share Index chart, the RSI recorded the highest index number for the week on Friday at 17.52 as the stock market experienced a slight gain of 0.48%, higher than 15.24 index number recorded last week.
The ASI relative strength index (RSI) is currently below the oversold mark (below 30) this according to the chart below indicates the stock market is presently in a downtrend mode and UNDERVALUED.

The volatility of the stock market remains wide

During the week on the Bollinger Bands chart, the price momentum of the ASI breaks closer to the lower band as it indicates the stock market price is statistically cheap.
The Bollinger Bands helps us determine the action of price as it nears the edges of either the lower (cheap) or upper (expensive) band is what we are particularly interested in and whether a trend continuation or reversal might occur.
Between the two bands, the ASI moved slightly above the lower band indicating the market is currently cheap and the upper band which shows the high or expensive level of the stock market price has been trending also downward towards a 27,000 index points indicating the stock market is in an extremely VOLATILE mode.
The tendency for the stock market to vary often and widely is still open as the gap between the upper band (27,179.32) and lower band (19,954.38) continues to expand. This is because the standard deviation increases as the price ranges widen and decrease in narrow trading ranges which influence the downtrend of price to spread the bands apart.
The stock market isn’t showing any sign of recovery yet as price remain closer to the lower band which isn’t different from what the market has been undergoing through subsequent weeks. The chart is indicating the current trend (downtrend) of the stock market is still persisting.

All charts can be accessed at https://realnaira.com.ng/2020/03/what-the-stock-market-says-about-making-money-this-week-3/