Sergey Kamenshikov, Ph.D.
IFC Markets
ADR outpaced oil prices by far
Since the start of the year the ADRs of Russian oil company Surgutneftegas edged up by 15% while the Brent crude price is almost permanent. The ADR rise may have been caused by political factors and does not fully reflect the company’s financial statement. Let’s study the performance of the personal composite instrument Brent/SNGS. It has slumped 40% since the mid-2015. Can it correct upwards?
The latest released IFRS financial statements of Surgutneftegas are for the first half of 2015. The company’s revenue fell 30% to $9.37bn compared to the same period of 2014 while the net income fell 38% to $2.35bn. Brent crude fell from $66 to $37 a barrel or by 44% in the second half of 2015. The annual statements are expected at late April – early May. The company’s financial indicators are unlikely to improve given the global oil prices dynamics in the second half of last year. The company’s top management announced the plans to marginally cut the oil output this year by 0.3%. Currently Surgutneftegas is fighting for the permission to extract hydrocarbons in the nature park “Numto” in the Khanty-Mansi autonomous district which Greenpeace and locals strongly oppose.
PCI
On the daily chart Brent/SNGS: D1 is in downtrend. Couple of days ago it hit a fresh 7-year low and is now correcting upwards. The Parabolic and MACD indicators have formed the signals to buy. RSI is rising but has not yet reached the level of 50. The positive divergence is seen. The Bollinger bands have contracted a lot which means low volatility. The bullish momentum may develop in case the personal composite instrument surpasses the last fractal high and the Parabolic and Bollinger signals at 1.033. This level may serve the point of entry. The initial risk-limit may be placed below the Parabolic signal, 7-year low and the last fractal low at 0.954. Having opened the pending order we shall move the stop to the next fractal low following the Parabolic and Bollinger signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. The most risk-averse traders may switch to the 4-hour chart after the trade and place there a stop-loss moving it in the direction of the trade. If the price meets the stop-loss level at 0.954 without reaching the order at 1.033, we recommend cancelling the position: the market sustains internal changes which were not taken into account.
Position Buy
Buy stop above 1.033
Stop loss below 0.954
Since the start of the year the ADRs of Russian oil company Surgutneftegas edged up by 15% while the Brent crude price is almost permanent. The ADR rise may have been caused by political factors and does not fully reflect the company’s financial statement. Let’s study the performance of the personal composite instrument Brent/SNGS. It has slumped 40% since the mid-2015. Can it correct upwards?
The latest released IFRS financial statements of Surgutneftegas are for the first half of 2015. The company’s revenue fell 30% to $9.37bn compared to the same period of 2014 while the net income fell 38% to $2.35bn. Brent crude fell from $66 to $37 a barrel or by 44% in the second half of 2015. The annual statements are expected at late April – early May. The company’s financial indicators are unlikely to improve given the global oil prices dynamics in the second half of last year. The company’s top management announced the plans to marginally cut the oil output this year by 0.3%. Currently Surgutneftegas is fighting for the permission to extract hydrocarbons in the nature park “Numto” in the Khanty-Mansi autonomous district which Greenpeace and locals strongly oppose.
PCI
On the daily chart Brent/SNGS: D1 is in downtrend. Couple of days ago it hit a fresh 7-year low and is now correcting upwards. The Parabolic and MACD indicators have formed the signals to buy. RSI is rising but has not yet reached the level of 50. The positive divergence is seen. The Bollinger bands have contracted a lot which means low volatility. The bullish momentum may develop in case the personal composite instrument surpasses the last fractal high and the Parabolic and Bollinger signals at 1.033. This level may serve the point of entry. The initial risk-limit may be placed below the Parabolic signal, 7-year low and the last fractal low at 0.954. Having opened the pending order we shall move the stop to the next fractal low following the Parabolic and Bollinger signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. The most risk-averse traders may switch to the 4-hour chart after the trade and place there a stop-loss moving it in the direction of the trade. If the price meets the stop-loss level at 0.954 without reaching the order at 1.033, we recommend cancelling the position: the market sustains internal changes which were not taken into account.
Position Buy
Buy stop above 1.033
Stop loss below 0.954
This overview has an informative character and is not financial advice or a recommendation. IFCMarkets. Corp. under any circumstances is not liable for any action taken by someone else after reading this article.
Recommended Content
Editors’ Picks
AUD/USD remained bid above 0.6500
AUD/USD extended further its bullish performance, advancing for the fourth session in a row on Thursday, although a sustainable breakout of the key 200-day SMA at 0.6526 still remain elusive.
EUR/USD faces a minor resistance near at 1.0750
EUR/USD quickly left behind Wednesday’s small downtick and resumed its uptrend north of 1.0700 the figure, always on the back of the persistent sell-off in the US Dollar ahead of key PCE data on Friday.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
Bitcoin price continues to get rejected from $65K resistance as SEC delays decision on spot BTC ETF options
Bitcoin (BTC) price has markets in disarray, provoking a broader market crash as it slumped to the $62,000 range on Thursday. Meanwhile, reverberations from spot BTC exchange-traded funds (ETFs) continue to influence the market.
US economy: slower growth with stronger inflation
The dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.