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A sharp turn in the Euro rate on Wednesday, February 20th, resulted in an increase of the rate from 1.4615 to 1.4864 on Friday. The correction has not yet resulted in support default for 1.4780. Moreover, the “double bottom” established at such level resulted in the renewal of purchases and growth to 1.4850. The signals at the inter-day periods support the possibility of retesting 1.4864 and upon achievement of this level – movement to 1.4910. The daily graphs show the sideways trend with wide limits of 1.4310-1.4950. The main attention is directed to the news from the USA and there is going to be enough of those till the end of the month, including the speech of B.Bernanke in the Senate scheduled on Thursday, February 28th. A turn may start at the end of the week, on Thursday or Friday. Before that the purchases start from 1.4760-80 and 1.4805. The sales start from 1.4920-50 with the stacks over 1.50 to be added upon achieving 1.4780. The British pound has also experienced a turn going from 1.9360 to 1.9710 without decreasing. The daily and weekly graphs also show turn signals and in case until the beginning of March the rate is not corrected to at least 1.9550, the growth to 1.9950 is possible. The Canadian dollar, as mentioned above, was approaching 1.0200. On Wednesday, February 20th, this level was finally achieved. After that the prices tended to the lower limit of 0.9950, with the support of 0.9920, 0.9875. There exists a risk of downward movement with the goals of 0.9750, 0.9710 and lower. The Japanese yen reached the upper range limit of 108.40. Thereafter there was an attempt to return to the earlier rate. A low of 106.75 was reported, but the attempt failed and the rate has been moving in the sideways channel within the range of 107.25-108.50. In the near future the attempts to reach 109 yen per dollar are expected. In the second half of February the dollar significantly decreased. If that results in overcoming the important barrier of 1.50 Euro per dollar, remains to be seen. So far we can expect a correction in early March and continuation of the sideways trend. In the mid-term perspective the dollar may strengthen not through the USA economic successes, but through the political situation in the country, i.e. presidential pre-election campaigns.
Russian Stock Market Summary for the week of February 18th - 22nd, 2008.
The Russian stock market has overcome the negative January tendencies and closed at 2079.72 points on the RTS Index.
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The Russian stock market has overcome the negative January tendencies and closed at 2079.72 points on the RTS Index. The European and American trade indexes were traded up on Monday, so the growth of the Russian market at opening on Tuesday is quite possible. Nornickel securities have been increasing for five weeks in a row. The growth is partly due to the rumours about the purchase of the shares by A.Usmanov’s structures for a possible merger of Gazprom with Nornickel. As a result the rate has increased from 4,913 rubles to the level of early November last year – 7,354 rubles. That was the closing price last week. If the trend does not change in February, it is going to be the best period for this security for the last seven years. The intrigue remaining in the relationship between the old, new and potential shareholders makes the prices grow, but from the technical point of view the formation of the “double top” shall not be unnoticed for the market participants. Therefore, upon reaching the last year’s high of 7.724 rubles or above 7,750 rubles, we would recommend selling the securities with the sale of the corresponding futures. The supports are at 7,220, 7,060 rubles, the resistance – 7,400 rubles. Gazprom shares have reached 322 rubles mentioned before, after which the profit taking reduced the price in the range between 312 and 318 rubles. Upon correction in the area of 312 rubles – the purchases in view of returning the price to the upper level of the range. It is possible that the correction is going to be deep, to 306 rubles or even 303 rubles, so it is recommended to gradually initiate long positions. In the previous summary the necessity of the breakthrough to the level of 1,825 is necessary for confirmation of a turn in Lukoil shares. That happened on Friday. The trading closed at 1,830 rubles and after a small correction to 1,815 rubles, the growth of these shares may continue. We recommend taking the existing profit and selling the shares as there are reasons to believe that the purchase wave will make the correction even deeper –to 1,800 rubles or even to the lower limit of the range – 1,785 rubles. The positive dynamics in the foreign stock exchanges along with the predictable results of the coming presidential elections encourage a new purchase wave. The question is how long it is going to last. Apparently after reaching 2,126 points, the first wave of the RTS Index correction will take place. Afterwards the most probable scenario is when the trading takes place within the sideways trend with the low limit of 2,020-2,050 (1,980) points and the high limit of 2, 170 (2, 220) points.
World Financial Markets for the week of February 18th – 22nd, 2008.
The European and American stock indexes are being traded up. Except for the coming initial offering by VISA, which is going to be the largest in the history of the stock market, 19 billion dollars, no other significant events are expected to occur.
The European and American stock indexes are being traded up. Except for the coming initial offering by VISA, which is going to be the largest in the history of the stock market, 19 billion dollars, no other significant events are expected to happen. VISA’s main competitor Mastercard entered the stock market about two years ago and since then its shares have increased in price fivefold. We will talk in more detail about the commodity markets. As for gold, the price of 954 dollars per ounce remained the same in spite of the buyers’ pressure. After testing on Friday, the price of 954.10 dropped to 935 and the reset attempt on Monday failed. The price increased to only 952 dollars per ounce and after that the correction became deeper – 930 dollars per ounce. Currently the correction scenario with the goal of 920 dollars per ounce is developing in the short-term perspective. The purchases – upon the first approach to the rates of 920, 912, 901 dollars per ounce. The sales – from 952-954 with the turning stop of over 956 with the goal of 972-975 dollar per ounce. As for silver, the price is approaching 18.25 and 18.50. But the approaches to 18.20 are already accompanied by active sales. The lower resistance is 17.60 and 17.80. In the four o’clock graphs the support of the upward trend is broken. The correction towards the lower range of the rising channel is expected. Platinum and palladium are being traded in minus at 1% and 2.5% correspondingly. As for crude oil, the daily graphs show the rate at the upper limit of the rising range. The resistance is at 99 dollars per barrel. The supports are at 95.50, 92.30, 91.2 dollar per barrel. The demand raises the prices and additional support is provided through the news - the entering by the Turkish troops of the Northern Iraq. The graph shows a “triangular” and upon its breakthrough in the nearest days we can expect a correction to lower than 96 dollars.
World Financial Market Summary for the period from February 5th – 18th, 2008.
The stock indexes of the major stock markets after decline in the first half of February showed growth, which cannot be considered stable.
The stock indexes of the major stock markets after decline in the first half of February showed growth, which cannot be considered stable. The German DAX is traded in the upward range and cannot yet break through the important resistance level of 7,100 points. Today’s closing (+2.23%) at 6,985 indicates growth continuation. The absence of negative news makes investors buy securities with less caution. However it is clear that if the mortgage write-offs continue, this growth will stop sharply. In the near future the sideways trend is probable for most stock indexes, which are in the stage of correction after the January fall.
The crude oil growth (almost 10% in two weeks) supported by a massive increase in Commodities value resulted in testing 96.6 dollars per barrel.
Since the beginning of the year platinum has increased by over 30% and costs 2,106 dollars per ounce.
Such growth is logical as the inflation concerns are growing.
The gold price, without reaching 950 dollars per ounce at the end of January, went back to 885 dollars per ounce. It was followed by a growth to 927 dollars per ounce, and then another fall to 900 dollars per ounce. A correction model with the perspective of price decrease to 863 dollars per ounce is being formed.
The similar situation is observed with silver. It went down to 17.6 dollars per ounce, 17.03 dollars per ounce. Apparently the peak of the fifth Elliot wave is going to be formed. After that correction will become obvious.
The market is not stable. The world economy growth is slowing down, investors are getting nervous. This situation will continue for the next few months.
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Return Analysis
