The NGX Fear & Greed Index is a sentiment gauge built specifically for the Nigerian Stock Exchange (NGX), using momentum, strength, breadth, and market volatility. Scores range from 0 (extreme fear) to 100 (extreme greed). As Warren Buffett famously advised, “Be fearful when others are greedy, and greedy when others are fearful” (Buffett, 2008), highlighting why tracking market sentiment can help investors avoid emotional decisions and identify opportunities.
How is the index calculated?
We combine four indicators: NGX Momentum (price vs 125-day MA), Stock Strength (Number of stocks near 52W highs), Market Breadth (advance/decline stocks), and Volatility (NGX All-Share Index volatility). Each is normalized and equally weighted.
How to use Fear & Greed Index?
The Fear & Greed Index shows how investors are feeling about the market. People often act on emotions, and tracking fear and greed can help you recognize when your own decisions might be influenced by them. Used alongside fundamentals and other analysis, the Index gives a quick snapshot of overall market sentiment.