Tuesday, September 22, 2009

Buyer Beware: Russian Market Set to Surge, or So Claim JPM, GS, and UBS

Today the pack of three Goldman Sachs, JPM ,and UBS all stated that the Russian market is set to surge upwards, "as the economy’s recovery spurs profits".

One can only say 'wow'. The Russian stock market has gone up 88% this year. However, in light of the near-collapse of the US Dollar, the RSX Russian ETF has actually gone up 102%. Please see the RSX ETF chart:

The current RSI7s of the RSX are 60.6 (daily), 73.03 (weekly), and 57.45 (monthly). The weekly is clearly overbought, the daily and the monthly have a little room to go, but they are dangerous grounds.

In addition, Russia's Central Bank said on Tuesday it expected net capital outflow in 2009 to hit $42 billion and that foreign exchange reserves would fall by $3B over the year.

So, the big three banks are pumping RSX and they will likely succeed - in the short term. However, the US Dollar is set for a rebound.

Please beware. This pumping is irresponsible.

Note: You may receive technical analysis and alerts of RSX sent automatically to you (powered by INO) by entering the symbol RSX in the wonderful Technical Trend Analysis Tool

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