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The correction followed after the FRB decision to lower the rates by 0.25%, which was negatively accepted by the world markets. The situation unfolded rapidly. On the political news the Russian stock market has risen significantly, but on the economic - it has been falling for three sessions in a row. On the one hand, profit taking was expected for a number of overheated stocks (Rostelecom, Gazprom) and on the RTS Index as a whole. On the other hand, it’s too early to talk about the trend ending. By the end of the year the highs are not likely to be exceeded. At best there will be a false entry to 2,300 on the RTS Index with its further return.
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The ongoing conflict of Nornickel shareholders caused the share price to drop to 6,170 rubles. If the situation is not resolved in the near future, the falling may continue to 6,055 rubles and 6,008 rubles. The top goals are 6,360 rubles, 6 500 rubles, 6580 rubles and 6650 rubles.
Within a month the shares lost 20% in value, which was prompted by the nickel price drop and the distribution of assets between the two major shareholders. At 6,000 rubles, the correction is quite probable. Whether it becomes a turn remains to be seen.
Rostelecom has reached 300 rubles, as mentioned in the last summary, and dropped to 273.64 rubles, a 38% correction of the highs. The downward movement goals are 269 rubles and 263.36 rubles. The short sales at 290 rubles seem most preferable.
Gazprom was traded around the last year’s highs of 359.40 rubles for almost three days but could not maintain its position and slid to 336 rubles. The bottom goals are at 329 rub, 325 rub, and 317 rubles.
The level of 300 rubles will serve as a good basis for purchases in the mid-term perspective.
Gazpromneft stocks reached 158 rubles, after which there followed a correction to 144 rubles. The correction goal is to return to the rising trading range, which was broken through on the wake of massive purchases last Monday, December 10th, 2007. The close of the last two sessions has formed a classic turning formation. Until the end of the year the price will go below 140 rubles, around 137 rubles. Gazpromneft stocks broke through the last year’s high of 151.5 rubles, but the shares of Gazprom, its parent company, were only able to repeat them. This shows that the growth potential of the oil company is far from being exhausted.
On the whole the market digested all information and the decline is continuing only because of the end of the year. Before the Catholic Christmas a sharp surge in sales is possible, which will subsequently be offset. Generally, sharp movements in the market will not lead to a serious change of the situation. The correction may be slightly delayed - until mid-January, but the trend will continue.
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Return Analysis
