Jumia Technologies AG [NYSE: JMIA] is among the new stocks that recently launched on NYSE. StockWatch247 recently covered its post IPO performance where the stock has retraced from its 52-week high at $49.77 to trade in a range between $30.00 and $40.00. The purpose of this article is to update investors on the performance of this stock almost a couple week’s since it went live on NYSE.
NYSE: JMIA Technical Picture
At the time of writing, JMIA is valued at $36.63 following a 1.45% loss on the day. The stock has a relative change of -0.54 on Friday. JMIA closed the Thursday trading session at $37.17 before extending today’s high to $37.57. The NLS volume for this stock currently sits at 1,100,500. According to the 1-hour chart, JMIA still has potential for growth.
The price currently flirts with the 12 EMA with an initial support at $36.00. A second support is observed at $32.00. The RSI has recovered from levels around 36.63 to brush shoulders with 50.00. At the same time, the MACD although still in the negative zone, is ranging closer to the mean line and could soon cross into the positive region. JMIA technical levels are still intact and correction above $40 is within reach in the medium term.
Pushing the technical levels to the side, let us dive into what makes Jumia a unicorn in the making? It is said that the giants in the stock market mostly have very humble beginnings. These stocks often kick off with little exposure or investors give them a blind eye terming them too risky. However, steady growth see these small, high risk stocks mature and “grow up”. Most of them take advantage of the secular tailwinds while driving massive year-over-year revenue growth, big margin expansions and eventually turn into global behemoths owing to their enormous valuations.
I would like to think Jumia Technologies AG is such a company. In its own measure, Jumia is Africa’s leading e-commerce retail juggernaut. As reported by StockWatch247, it hit public mid-April 2019 following a successful IPO at a share price of $14.50. Investors jumped on the bandwagon clearing the shares in less than two weeks.
Jumia’s potential is enormous especially because it is sitting at the heart of the developing African continent. A people hungry for technology and ready to discover the services that were only a preserve of the west. In away Jumia reminds me of how Alibaba revolutionized the digital economy of the Asian region. It is only a matter of time before the African economy gives birth to such a giant stock like Alibaba (NYSE: BABA).
It is in fact, correct to say that Jumia stock is a high risk investment with a potential high reward that is banking on the growth of the African digital economy. The stock is not for the faint hearted but for investors who are ready to dive in and face the risk head on.
However, investors must look at the bigger picture and the stock’s growth in the long-term. It has the potential to become a winner as the African digital economy expands. Countries like Nigeria and South Africa are the largest economies on the continent with GDPs around $750 billion as per the data provided by IMF. Other economies are catching up first with Kenya, Ethiopia and Ghana growing at fast rate. According to Nasdaq:
“Jumia is the most relevant player in Africa’s digital economy today. The heart of Jumia is an e-commerce platform called Marketplace. Jumia Marketplace, which operates in 14 countries throughout Africa, has 81,000 active sellers, 4 million active buyers, and reported nearly $1 billion in gross merchandise value in 2018. Those are big numbers for the still-nascent African e-commerce market, which in combination with the Middle East, only had around 70 million e-commerce shoppers in 2018, of which probably 50 million were from Africa, giving Jumia roughly 8% shopper market share.”