Lets get in to it.

Brewery stocks have been on a roll this year after a very disappointing several years. There were heavy losses in the sector due to the Naira devaluations and the erosion of the buying power of Nigerian consumers from inflation and other issues. 

Late last year was an inflection point in the industry and since then there has been a turnaround in the sector. Companies have reported profitability led by GUINNESS and others followed with NB and INTBREW also reporting profitable Q1 results. All three of those stocks are up more than 100% over the past 6-7 months. Things could get better after the Q2 results come out as long as Naira remains stable and inflation keeps trending lower. 

In between all this, there has been a brewery which is much smaller in size in comparison to the three mentioned above that remained profitable last year. It's stock has been on a tear this year gaining 200% so far. This Company impressed with strong financial result given its smaller size and footprint while the giants in the sector were reporting big losses. This brewery is based in Eastern Nigeria and its products are usually not found in Lagos or other parts of the Country. In that way that is a huge opportunity for this Company to make its products available in Lagos and other states around Lagos. 

The reason for this article is actually the long term chart of this Company. If you zoom out to 15 year chart, the stock saw massive gains in 2014 when it was the best stock of the year and approached N 20 levels when Naira was 200 to a Dollar. 

Currently the stock is around N 10 per unit while Naira is near 1600 to a Dollar. We need to put things in to perspective and not just look at the long term chart. 

The long term chart is a technical analyst's dream come true. It is such a long cup and handle with such a big cup forming right now that it signals an explosive move in the stock. Things are about to get very interesting here going purely by technical chart analysis in the opinion of our analyst. This chart will make a sleepy technical chart guy fall out of his chair. 

Apart from the chart analysis however, investors should keep in mind that Champion Brewery ( CHAMPION ) was recently acquired by an entity called Evercorp. This entity may have totally different plans on how to run this brewery than how it was run the past - think geographic expansions. Those could be reasons behind such a sharp increase in its stock price however the chart signals something way bigger. 

Also keep an eye on the entire sector, the likes of GUINNESS , NB and INTBREW are way bigger players and CHAMPION expanding in to other parts of Country which is their territory. 

This article in an opinion-article and not investment advice or recommendation to buy, sell or hold any of the stocks mentioned. Illustrations are educational about what a cup & handle chart is for those who do not know. 

Remember - easykobo is the website to learn Nigerian stocks minus the noise. Tell you friends who don't know how to invest to come to easykobo to learn how to do it. How to read fundamentals and how to pick stocks based on their merit.