Analysis

	Russian Stock Market Summary of June 16th, 2008.

After a long holiday weekend the Russian market opened with a growth. There were gaps for a number of blue chips, which were closed by the market in the afternoon.
Gazprom shares opened with a gap of almost one per cent and went rapidly up to 349.37 rubles. This was followed by profit taking and currently the price dropped below 344 rubles – to 343.80 rub.
Surgutneftegaz is being traded in the downward trend, which is confirmed by a rebound from the level of 30 rubles. The next support level is 26.80-27 rubles. The critically important level for preservation of the upward trend is 25.50 rubles, which corresponds to 50% Fibonacci correction of the trend from 20.3 to 30.7 rubles. In the present situation it is difficult to recommend purchase of these shares from the current levels as the growing crude oil price does not have a noticeable effect on them. Surgut preferred shares are being traded with a similar trend. However, careful purchases may be effected from 13.025 rubles and 12.50 rubles and may be increased if 13.80 rub. level is overcome.
Nornickel growth early this month happened too rapidly, which was apparently unexpected even for its shareholders. This accounts for massive sales at the end of May. Within a week the rate went down from 7,489 rub. to 6,500 rub., which was facilitated by the news background. Early in June there were attempts to stay over 7,000 rubles, but the sales increased due to the disappointing Nornickel report. On Wednesday the price reached 6,335 rubles and today it tested 6,500 rub. mark from below.  This growth has not been supported and there is a risk of a repeated fall to 6,350 rubles.
Short-term trading is the best strategy in the current conditions due to situations in the international markets and the summer vacation period. Presently the best dynamics is observed with the shares of Gazpromneft, Uralkali and Lukoil. The buy on dips strategy may be used for such shares. Using Gazpromneft as an example, we can say that the purchases will start around 175 and 178 rubles if we take the low of May 23rd as the lowest point of the growth wave and today’s high as the highest point. Short-term discreet purchases may be effected from 180 and 182 rubles.
On the whole, the Russian market preserves the usual correlation with foreign indexes – the German DAX and the American DJ, which is particularly noticeable on the futures with the RTS Index. Moderate optimism in the European and American markets at the end of last week was readily assumed by Russian investors. The September futures for the RTS Index went up at opening of today’s morning session from 233,900 points to 239,550 points. After such a strong growth, a correlation will be good for our market.