Technical and Time Analysis on Financial Markets

On May 19, 2024, the attached image captured the trading price of a penny stock listed on the NGX at 31 kobo. From a technical analysis perspective, the stock appears primed for an upward trajectory following a prolonged period of stagnant price movement. I alerted my colleagues and fellow traders to this potential opportunity, anticipating a rise in value by Q4 of 2024, a trend often observed among insurance companies.

As of January 25, 2025, the stock has surged over 100% from its previous price. This has prompted inquiries about the effectiveness of technical analyses on Nigerian stocks, as this isn't the only recommendation I've shared with my community. While traders employ various financial analyses and valuation tools to assess companies, I firmly believe that the asset's price plays a crucial role.

A price chart features price on the Y-axis and time on the X-axis. Many traders focus solely on the price, often overlooking the time aspect.

I won't delve into a detailed explanation of what I term "Time analysis," but I urge traders and those interested in this field to recognize the significance of time and not to disregard it.

In my trading of Contract-for-Difference (CFDs) on currencies, which are highly volatile and predominantly retail-based (thus susceptible to price manipulation and lower winning probabilities), I utilize "time analysis" to gain an edge over most traders. As previously mentioned, I highlighted a specific period when insurance stocks tend to perform well (Q4)—the time component of my analysis.