TRW YEARLY RECAP FOR 2009 & WEEKLY REPORT FOR 4TH-8TH JAN 2010


 HAPPY NEW YEAR 2010!

2009 is over at last. It has been an extremely turbulent year and everyone's swept under its currents such that it was hard to see what actually happened, so, here's a recap of what happened in the stock market in 2009.
Summing up, the NSE lost a total of 4488 points this year, down 33.78%.

INDEX YEARLY TIME FRAME FOR 2009
  2009 2008 % CHANGE
NSE INDEX 20827.17 31450.78 -33.78
NSE30 827.99 575.39 43.90
NSE BANKING 339.32 305.82 10.95
NSE F.B&T 526.71 357.16 47.47
NSE INS 249.01 518.67 -51.99
NSE O&G 288.06 632.08 -54.42

How did it all begin? Indications of this 2009 market crash actually started showing up as early as march of 2008 when the market experienced:
-Exit of foreign investors who were interested in merely short term gains
-Global melt down due to crises in the American financial sector
-Margin loans (Banks exposure was about N700bn)
-Massive Sell offs by banks to recover large exposures and CBN directive to declare full exposure.
-High gross of Market manipulation
-Lenders make up about two-thirds of the Nigerian stock market, the largest proportion among the 50 equity indexes worldwide that were grouped in industries by Bloomberg and MSCI Inc.
-Government refusal to bail the stock market.
 ** I am sorry if I did not include many of the other major events that contributed in the 2009 crash as I intend to keep this as short as possible while correlating events in the economy to the stock market.
YEARLY GAINERS 2009

 YEARLY LOSERS 2009
TECHNICAL VIEW

From a technical view, market started showing signs of weakness when the NSE price index crossed below the 65 Day (3 months) Moving Average in April and found resistance & support within the 200 day Moving Average between June and July 2008.
Both, the 65 and 200 day moving averages not only are excellent indicators of the direction of the trend – but also serve as reliable support and resistance levels.
The chart below showed signs of warning within these region before the final downward trend. Till this day the market has continued to trade below these region signalling a continuous weakness of the market.

 

Bottom Line
There is a real mix of strength and weakness in the overall chart. The markets remain in a veritable "no man's land", as the risk-reward to either side is not attractive for opening new positions. Next week should resolve some questions as traders return from the holiday week and the important levels highlighted above are tested.
Have a Great Trading week.

Watch out for stocks in NSE Banking and NSE Food Bev & Tobacco.
 
This commentary is not a recommendation to buy or sell, but rather a guideline to interpreting the specified indicators. This information should only be used by investors who are aware of the risk inherent in securities trading. TRW accepts no liability whatsoever for any loss arising from any use of this expert or its contents.
 
INVEST FOR A GOLDEN TOMORROW

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