Experts at Bancorp Securities Limited, a leading investment research and consulting firm in Nigeria, have projected that trading on the Nigerian Exchange this week is likely to remain cautious and selective, with investors rebalancing their portfolios
The investment researchers, based on the ‘Weekly Stock Recommendation 18th-22nd August 2025’ Note of the firm circulated to our correspondent on Monday, noted that the equities market appeared set for consolidation after an extended rally, with technical indicators pointing to softer momentum as profit-taking dominates recent sessions.
According to the experts, this trend has narrowed the market breadth, while UD volume and TRIN suggesting selling pressure is starting to outweigh buying conviction.
Recapping the trading sessions in the previous week based on macroeconomic factors, including the July Inflation rate and the 7% economic growth target set by the Nigerian Government for 2027, the analysts noted that after eleven straight weeks of gains, the bullish run on the Nigerian equities market came to a halt, as the NGXASI closed the week in negative territory, down by 0.77% week-on-week to settle at 144,628.20 points.
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As expected, the YTD return moderated to 40.52%, while market capitalisation shed N712.9 billion to close at N91.5 trillion even as the trading activity reflected that total volume and value declined of the local bourse declined by 1.96% and 25.74% respectively,
The firm’s researchers noted that from a technical standpoint, the weekly up/down (UD) volume ratio fell sharply to 1.00x from 5.30x in the prior week,indicating weaker conviction behind advancing stocks compared to the previous rally.
Similarly, the TRIN (Trader’s Index) rose to 1.12x from 0.34x, reflecting heavier volume on declining issues relative to advancers, a bearish signal suggesting that selling pressure outweighed buying interest, just as the market breadth remained positive but narrowed compared to the prior week, with 50 gainers against 49 decliners, translating to a breadth ratio of 1.11x versus 1.78x previously.
On the firm’s projected outlook for the Nigerian Exchange performance this week, the analysts forecasted: “The equities market appears set for a period of consolidation after an extended rally, with technical indicators pointing to softer momentum and profit-taking dominating recent sessions. Breadth has narrowed, and both UD volume and TRIN readings suggest that selling pressure is beginning to outweigh buying conviction.
“In the near term, trading is likely to remain cautious and selective, with investors positioning ahead of Tier-1 bank earnings and dividend declarations, while regulatory-driven momentum in insurance may sustain interest in that space.
“Overall, sentiment will remain mixed, with a bias toward sideways performance rather than a strong rebound, pending fresh catalysts”, the experts added.
