Analysis

	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. 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.