Schedule RTS index at intervals of 1 week
A month ago, the RTS index formed a promising “cup and handle” pattern on the daily chart, but external problems (growth in Treasury yields and aggravation on the border with Ukraine) did not allow it to continue its growth immediately. Today new technical and geopolitical prerequisites appear for this.
Geopolitics is more or less clear: on Tuesday Joe Biden called Vladimir Putin and offered to talk on neutral territory.
Usually, such meetings are being prepared for quite a long time, so it is unlikely that it will take place earlier than summer. In addition, in three weeks there will be another celebration on May 9, so the aggravation of the geopolitical situation on the eve of these events looks unlikely.
The technical picture is more interesting: the “handle” of the “cup and handle” pattern on the weekly RTS chart still does not look broken, despite the pullback of recent weeks. A technical signal to buy in such situations is usually a break above the top of the “handle” (see chart above – approx. ProFinance.ru), but given the rather unique circumstances (the Russian stock market has lagged far behind the world market, therefore the risk premium taken into account in prices may contract sharply and quickly, especially given the high oil prices), the RTS could begin to rise right from here and without serious pullbacks a la November-January 2020.
A fall from the current levels to about 1300 points (-11%) will cancel such a scenario, but if this does not happen, the RTS may eventually be able to continue its growth to record highs.
It was about “technique”, and subjectively, at record highs, I personally am not very sure about the absence of hyperinflation on a global scale. Until then, it is still a long time, so we will monitor the situation.