UFS Investment Company - Technical Analysis - Gazprom, Start of Another Big Journey, Jul 10, 2013.
Having carefully scrutinized the structure of decline that started in April 2011 and has been developing for already more than 2 years, we came to a conclusion: the decline seems completed, so that we may assume a long-term growth phase is starting to develop now. However, we can state the end of downward movement and a trend reversal only when the shares reach the upper end of the downtrend, shown with the red line in chart 1. Now we can assume that Gazprom's shares will most likely reach resistance in approximately 1-1.5 months a the upper end of the descending price corridor (red line), the mark of 129.50 rubles.
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Indicators: in the daily chart MACD has formed a buy signal. The uptrend indicator DMI+ edged up slightly above the downtrend indicator DMI-, while the trend strength indicator ADX is located in the middle of the scale and is going downwards, indicating completion of the downtrend and a possible turnaround in the upward trend. The indicator based on ADX dynamics earlier gave several buy signals.
Recommendation: buy the shares of Gazprom OAO at the present price (113.50 rubles) in order to sell at 129.50 rubles per share (+14.10%), with a stop at 112.51 rubles (-0.87%); time horizon is 1.5 months.
Support: 112.52; 110.00; 107.00; 100.00; 90.00.
Resistance: 115.50; 118.20; 123.50; 125.65; 129.50.
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