The Nigerian Exchange Limited (NGX) ended last week with a powerful Friday rally that has left market watchers cautiously optimistic heading into the new trading week, as technical indicators and momentum shifts suggest the potential for sustained upward movement despite lingering volatility concerns, news.ng reports.
Friday’s session delivered the week’s strongest performance, with 687.4 million shares traded across 41,539 deals—a compelling 25% volume surge and 6% value increase over Thursday—signalling renewed investor confidence that could set the tone for the week ahead.
The NGN 14.98 billion turnover represented the culmination of a week characterised by sharp swings in sentiment and participation.
This medium observed that last week’s trading painted a picture of market uncertainty, gradually giving way to conviction. The week opened on Monday with robust deal activity (58,419 transactions) but saw volumes contract by 18% as investors adopted wait-and-see positions. Tuesday and Thursday brought further deterioration, with participation metrics declining across the board—volume dropping 20% on Tuesday and another 12% on Thursday.
However, Wednesday’s 29% volume spike and Friday’s decisive breakout suggest a potential inflexion point. Market capitalisation fluctuated between NGN 105.7 trillion and NGN 106.1 trillion throughout the week, ultimately settling near NGN 105.9 trillion—a range that technical analysts view as a critical consolidation zone.
What to Expect This Week
Friday’s triple-digit improvement across volume, value, and deals creates positive technical momentum heading into the new week. The 25% volume expansion—the week’s largest single-day jump—suggests accumulation by institutional players who typically drive sustained rallies.
While Friday’s data did not specify advancers versus decliners, earlier sessions showed narrow breadth, with gainers and losers nearly balanced (Monday: 35 vs 36; Thursday: 41 vs 27). Sustained upward movement will require broader participation across sectors, not just concentrated buying in select counters.
The market capitalisation’s repeated tests of the N106 trillion level throughout the week signal this as a critical resistance point. A decisive break above this threshold could trigger momentum buying and attract sidelined capital back into equities.
Traders should watch these key indicators this week:
Volume trends: Sustained daily volumes above 550 million shares would confirm Friday’s breakout; falling below 500 million would signal false momentum.
Turnover velocity: Values consistently above N15 billion suggest genuine institutional participation rather than retail-driven volatility.
Deal count sustainability: Maintaining 40,000+ daily transactions indicates broad market engagement.
While comprehensive sectoral data was not disclosed in Friday’s trading summary, historical patterns suggest the week ahead may see rotation from defensive positions into cyclical sectors if the positive momentum holds. Banking, consumer goods, and industrial sectors typically lead during confidence-building phases.
Despite the optimistic close, investors should remain cognizant of headwinds: the global economic environment remains uncertain, domestic inflation concerns persist, and foreign portfolio flows continue to show volatility. Currency pressures and monetary policy expectations could also inject mid-week volatility.
Friday’s strong finish has shifted the technical picture from neutral-bearish to cautiously bullish for the week ahead. The NGX appears to be establishing a base around current levels, with Friday’s volume and value improvements suggesting accumulation rather than distribution.
However, the week’s extreme volatility—swinging from Monday’s 58,419 deals to Tuesday’s 29% decline in deal count—underscores the market’s fragile confidence. Sustained upward movement will require confirmation through the first two sessions of this week.
It is expected that the NGX will open modestly higher on Monday, with the All-Share Index posting gains of 0.3–0.8%. The week could deliver cumulative returns of 1–2% if momentum holds, pushing market capitalisation decisively above N106 trillion by week’s end. Key resistance lies at N106.5 trillion, while support remains firm at N105.5 trillion.
