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UFS Investment Company - Technical Analysis - Rosneft, The Leader Should Advance, May 16, 2013.

Rosneft: The Leader Should Advance

After a five-quarter growth phase (since Q4 2008), Rosneft's shares started a correction and finished down at 171.04 rubles. Upon completion of the correctional development A-B-C the share price started a growth impulse, whose expected structure is represented in chart 1. We see 400 rubles per share as the long-term target for growth.

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Indicators: in the weekly chart MACD gave a bearish signal this February, followed by a correctional descending wave [2]. The uptrend indicator DMI+ is located slightly below the downtrend indicator DMI-, and they are converging; the trend strength indicator ADX is in the middle of the scale and is going slightly downwards, which is signalling the waning downtrend and is due to the completion of the downward wave [2]. The indicator based on ADX dynamics sent a sell signal in February 2013, followed by the descending wave [2]. At the moment the indicators are poised for buy signals; the hourly chart (chart 2) shows that Rosneft's shares surpassed the upper end of the medium-term downward channel, formed a reversal pattern a double bottom, which can serve as an impetus for buy signals in the weekly timeframe.

Recommendation: buy Rosneft's shares at the current price (219 rubles) with a view to selling at 400 rubles (+81.82%), with a stop at 213 rubles (-3.18%); time horizon is 49 months.

Support: 218.24; 210.26; 190; 171; 155.

Resistance: 226.69; 255; 275; 291.36; 350; 375; 400.


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129090, Moscow, Protopopovskiy lane, 2

Tel.: General: +7 (495) 781 02 02

Fax: +7 (495) 781 73 07

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Publication:Russian Banks and Brokers Reports
Date:May 16, 2013
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